NEW YORK — Strong consumer fundamentals and favorable weather drove an upbeat start to the summer beverage selling season.
According to Wells Fargo Securities LLC's latest Beverage Buzz survey, overall total beverage sales in the convenience channel were up 4.8 percent in the second quarter. This number put it ahead of the 4 percent in the first quarter.
Notably, sales were up 6.1 percent over the July 4 holiday, said Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.
Beverage Buzz survey beverage retailers representing more than 15,000 convenience stores.
Retailers also noted that the promotional environment is "very rational," according to Herzog, with non-alcoholic beverage promotions up only 1.4 percent over July 4, 2018.
In addition, the survey found that the retailers' outlook for the total energy category is improving, up 7.8 percent vs. prior expectations of 6 percent.
As Herzog pointed out, retailers estimate that the energy category grew by "a robust 10.1 percent" year over year this Fourth of July holiday — led primarily by emerging energy brands.
Beverage Buzz also found key takeaways on specific brands, including:
The Coca-Cola Co.: Retailers reported c-store sales for Coca-Cola were up 2.4 percent in the second quarter. They were also upbeat about BODYARMOR, which continues to grow well ahead of the category and take share from Gatorade.
Monster Beverage Corp.: Retailers estimate Monster sales were up 4.3 percent in the convenience channel for the quarter. In addition, they are seeing the company step up promotions. Repurchase activity for Reign appears to be strong, with nearly 70 percent of retailers indicating either strong or moderate repurchase activity.
PepsiCo Inc.: Retailers reported Pepsi's c-store sales were up a very modest 0.4 percent in Q2, which was a deceleration vs. 1.2-percent growth in Q1). Some retailers were upbeat about Bolt24 and Gatorade Zero That said, others remain concerned about the company's overall beverage strategy, innovation pipeline and packaging, according to Herzog.
Keurig Dr Pepper: Second-quarter trends were "muted," Herzog said, and retailer still are not over the loss of BODYARMOR and FIJI. The company's c-store sales increased by 1.3 percent in the quarter, broadly in line with the first quarter's 1.2-percent growth but a deceleration from the 3.3-percent growth in the last quarter of 2018.
Constellation Brands: The survey found that Constellation Brands is outperforming "an increasingly strong category," Herzog said. Retailers were extremely bullish about the company's longstanding premiumization strategy.