Monster Energy Corp. showed mixed sales results for the four-week period ending September 7 as the company’s growth continues to lag the broader energy category, according to a Wells Fargo Securities analysis of Nielsen data.
Monster reported 5.3% dollar sales growth for the four-week period, which includes the Labor Day holiday weekend. However, volume sales were flat at 0% during the month, compared to 0.7% growth in the 12-week period and 1.1% growth year-over-year. Comparatively, the whole energy category (including coffee and tea energy drinks) saw dollar sales increase 10% in the 4-week period with volume up 5.8%.
According to analyst Bonnie Herzog, sales of Monster’s core line “remain under pressure” as dollar sales grew just 1.7% while volumes declined 4.1% in the four-week period.
Dollar sales of Monster Ultra increased 2.2% and Java Monster was up 5.2%. However, sales were down for much of Monster’s portfolio: Nos fell 2.9%, Rehab dropped 18.6%, Hydro declined 2.7%, and Absolutely Zero dipped 12.5%. Monster’s two other coffee SKUs — Caffe Monster and Espresso Monster — saw dollar sales fall 49.1% and 38% respectively during the four-week period, but remain high performers over the last 52 weeks, where they are up 29% and 10.3%.
Growth of Monster’s fitness energy line Reign is staid. The brand reported roughly $8 million in dollar sales per week, a rise of just 1.6% in the four-week period despite expanded distribution. The line’s all-commodity volume (ACV) of 75.6% has outpaced its top competitor, Bang, which currently reports an ACV of 67.3%. Herzog noted that Reign’s slowdown comes as Monster has reduced its in-store promotions, including the end of a buy-one-get-one campaign that proved pivotal to driving trial. In the four-week period, 51.2% of Reign products were sold on promo, compared to 56.7% in the 12-week period.
“Most retailers are not seeing Reign do much to dampen consumer enthusiasm for Bang — with nearly two-thirds of retailers indicating that Bang sales continue to accelerate in their stores despite Bang’s still somewhat lackluster distribution network,” Herzog wrote.
In the same period, Bang saw a 221.3% rise in dollar sales, with volumes up 209.2%. Numerous respondents to Wells Fargo’s recent Beverage Buzz survey of convenience channel retailers pointed to Bang as driving energy category expansion. The brand’s consistent triple digit growth also led retailers to increase their growth projections for the energy category in 2019 from 7.8% to 8.3%.
Herzog noted that Monster is also likely to face competitive pressure from The Coca-Cola Company’s Coke Energy, which Wells Fargo anticipates will launch in the U.S. sometime in 2020. According to respondents to the Beverage Buzz survey, the company will likely price Coke Energy in line with Monster.