Convenience store sales of non-alcoholic beverages were up 4.2 percent over the Labor Day holiday weekend, according to Wells Fargo Securities’ latest “Beverage Buzz” report.
The survey, which polls 15,000 retailers across the country, found that total C-store beverage sales were up 4.5 percent for the holiday, compared to 6.2 percent growth a year before. Wells Fargo senior analyst Bonnie Herzog, who authored the report, attributed the softer sales to unfavorable weather, among other things, pointing to “the Southeast [being] negatively impacted by Hurricane Hermine.”
The latest “Beverage Buzz” findings also showed the energy drink category slowing down, which retailers indicated was driven by “consumer pushback on last year’s price increases, lack of innovation, poor weather, and a broad shift to healthier / hydration categories which appears to be negatively impacting the energy category more than it has in the past.”
“Many retailers reported that “retail prices [for energy] are too high,” with the vast majority of retailers believing there is limited opportunity for further pricing,” wrote Herzog.
Herzog, who expressed concern regarding Monster’s performance in a July “Beverage Buzz” report, said initial expectations for the company’s upcoming Mutant line extension, slated to hit shelves this month, are “modest.”
“We continue to remain cautious on the near term prospects for Monster and reduce our FY16/17 EPS estimates by $0.04 / 0.03 to $3.91 / $4.78 as industry headwinds will not likely be offset by new innovation or pricing over the next 1-2 quarters,” Herzog said.
Monster’s Hydro line extension is not expected to land on shelves until 2017, retailers indicated.
“Overall, beverage sales in c-stores remain solid, with pockets of strength in premium waters, healthy/functional non-alcoholic beverages,” she added.