Big Brands Boost Energy Drinks Success

energySoft drink sales might be flat, but thanks to energy drinks, the convenience store cold vault is as popular as ever.

The energy drinks category saw dollar sales in convenience stores of $6.67 billion for the 52 weeks ended Dec. 1, 2013, according to IRI Convenience All Scan data. Dollar sales were up 5.94% from 2012. According to IRI, Red Bull continued as the top selling energy drink with $2.58 billion in sales, followed by Monster Energy with $843.40 million in sales. Monster Rehab finished third for the year with total dollar sales of $282.52 million.

As a pit stop right off a major highway in Sullivan, Ind., Jiffy Mini Marts gets a large share of customers who are seeking energy drinks to sustain them during their long drive. As a result Jiffy Mini Marts Owner Karen Shroyer noted she expects energy drinks sales to be up in 2014. In fact, Shroyer is planning to reset her cooler doors to allow for two full doors of energy drinks, especially in light of all the new flavors the major brands—particularly Monster—are introducing. “Monster seems to be taking over the category with the introduction of so many new flavors and varieties, and Red Bull also does well as our second best- selling energy drink,” said Shroyer.

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Shroyer is far from the only c-store retailer to notice the uptick Monster’s brand innovations have brought to the category. Wells Fargo Securities’ Beverage Buzz survey polled beverage retailers representing more than 15,000 c-store locations across the U.S. to ascertain 2013 fourth-quarter trends. The results showed the energy drinks category helped buoy overall non-alcoholic beverages and that Monster energy drinks ended 2013 with the strongest performance of all energy drink brands.

Monster Sales Increases
Wells Fargo estimated Monster’s c-store volume grew 13% in the fourth quarter of 2013, following a 12% increase in the third quarter and 9% rise in the second quarter of 2013. “We attribute this partially to an increase in promotions and declines in the negative media coverage of the energy category. Additionally, our retailers believe that innovation, mainly Zero Ultra and Muscle Monster, has contributed to overall Monster sales growth,” noted Bonnie Herzog, managing director, beverage, tobacco & convenience store research for Wells Fargo Securities.

Wells Fargo’s Beverage Buzz survey revealed that the energy drinks category grew at a double-digit rate in the fourth quarter of 2013, with Monster outpacing the category growth, with dollar sales up 15.1%. “Our retail contacts believe this trend will continue through 2014,” Herzog said. Survey respondents also indicated that because of the higher average ticket and greater profitability of the typical energy drink when compared to other beverages, the energy category showed the most growth of any beverage category within the c-store channel, but the category is continuing to take shelf space away from other beverage categories.

“We estimate that retailers have nearly a 40% margin for energy drinks versus 35-40% margin for total beverages and only 30% for CSDs,” said Herzog.◆

Energy Drinks Enjoy Strong Growth
Information Resources Inc. (IRI) data for the convenience store channel shows that Red Bull continues to lead the energy category, with Monster products nipping at its heels. Unit sales and dollar sales are up overall across the category.

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 Source:  Information Resources Inc. (IRI), Total U.S. Convenience AllScan, 52 Weeks Ended Dec. 1, 2013