Convenience Store Retailers Expect Beverage Sales to Tick Up in 2024

NEW YORK — Beverage sales in the convenience store channel closed out 2023 on a strong note, leaving retailers feeling optimistic about the category. 

According to the Goldman Sachs "Beverage Bytes" survey for the fourth quarter of 2023, beverage sales accelerated sequentially — up 4.8% in the fourth quarter vs 4.4% in the third quarter — and retailers continue to expect healthy 4.5% growth in 2024.

The "Beverage Bytes" survey represents approximately 40,000 retail locations, or roughly 27% of the c-store channel.

While retailers were positive about the energy drink category, according to the survey, several retailers remain concerned about broader economic pressures and inflation weighing on the category, said Bonnie Herzog, Goldman Sachs senior financial analyst.

Other notable takeaways from the Q4 survey include: 

• The pricing environment remains healthy/rational with all retailers expecting incremental pricing by both nonalcoholic beverage manufacturers and brewers this year.
• Fewer retailers are seeing promotional activity picking up in the nonalcoholic space, but the majority of retailers (65%) expect manufacturers will have to start to promote more to prevent volume erosion.
• Alcoholic beverage promotional activity was broadly stable in the last few months, while most retailers believe that brewers can continue to push through more pricing this year. 
• Retailers are largely upbeat on Celsius Holdings Inc.'s new Celsius Essentials, with many planning to add incremental shelf/cooler space to the brand, while retailer sentiment on Bang was slightly more mixed.
• Recent trends have stabilized for Bud Light and in some instances improved, though Constellation Brands Inc. and Molson Coors Beverage Co. continue to be beneficiaries and have likely gained structurally more market share as a result.
• Hard seltzer category declines accelerated in the fourth quarter and retailers are even more pessimistic on the category's growth outlook this year vs. the prior "Beverage Bytes" survey.
• Twisted Tea's strong recent momentum is showing no signs of slowing, and retailers are slightly more optimistic on the brands' growth outlook this year.

"Retailers have turned slightly more optimistic over the last one to two months, with 33% of respondents indicating their outlook on the total beverage category has improved recently (vs. 7% in our Q3 survey)," Herzog added.