NEW YORK — Sales in the cold vault continued at healthy clip in the third quarter of 2023, though growth did slow a bit from the previous three months.
According to the Goldman Sachs "Beverage Bytes" third quarter retailer survey, beverage sales were up 4.4 percent in the quarter compared to a 6.6 percent increase in the second quarter. Additionally, retailers expect beverages sales to increase roughly 5 percent this year — down from roughly 6 percent in the previous survey.
"Beverage Bytes" surveys retailers representing approximately 40,000 retail locations or approximately 27 percent of the convenience store channel.
Overall, retailers remain very positive about the growth trajectory for Constellation Brands, with approximately 11 percent year-over-year growth expected this year and 8 percent expected in 2024. Additionally, double-digit growth is forecasted for 2023 and 2024 in the energy drink category, said Bonnie Herzog, Goldman Sachs senior financial analyst.
However, she noted, retailers "remain concerned about broader economic pressures/fears of recession and residual fallout from the Bud Light controversy, albeit moderating."
Other notable takeaways from the "Beverage Bytes" survey include:
The pricing environment remains healthy/rational with many retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year and in 2024.
Beer promotional activity appears to have leveled off in the last few months, as the majority of retailers are not seeing a pickup in promo activity and believe that brewers can push through incremental pricing.
Conversely, promotional activity in nonalcoholic beverages is still picking up according to the majority of retailers, as manufacturers continue to drive promos to support unit growth.
The hard seltzer category declines moderated in the third quarter and retailers expect the moderation to continue for the full year and into 2024.