Industry Tailwinds Propel Q3 C-store Beverage Sales

NEW YORK — Beverages continue to perform well in the convenience channel.

According to the latest Wells Fargo Securities LLC's Beverage Buzz survey, the sales of non-alcoholic beverages grew 4.8 percent in the third quarter. In addition, sales of alcoholic beverages increased 3.3 percent.

"Craft beer and imports remained top performers; however, retailers are particularly excited about 'hard sodas,'" said Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.

One retailer surveyed added lower gas prices "put more discretionary dollars into consumers' hands," and another noted "lower gas prices are having a positive impact on visits and gallons sold per transaction," Herzog explained.

Beverage Buzz surveys beverage retailers representing more than 15,000 convenience store locations in the United States.

"We continue to believe the risk/reward for both beverage manufacturers and c-stores ahead of third quarter results remains favorable given the benefit from lower gas prices/higher consumer disposable income and relatively benign weather," she said.

Third-quarter trends in the beverage category include:

• Non-alcoholic beverages are up on the strength in energy drinks, sports drinks and bottled water.
• Third-quarter promotions were down sequentially from the previous quarter but remain broadly in-line with historical averages.
• The energy, craft and imported beer segments are expected to outperform for the balance of 2015.