Energy and Teas driving growth, according to Wells Fargo Beverage Buzz survey.

Wells Fargo Securities LLC recently conducted a survey of beverage retailers representing over 15,000 c-store locations across the U.S. to get a sense of Q3 trends.

Based on the “Beverage Buzz” survey results, non-alcoholic beverage trends remain strong with +6.2% yr/yr sales growth projected for Q3. The results were driven by solid sequential improvements in Energy and Teas, while Colas had their first positive quarter in Wells Fargo surveys in over two years, which analysts attributed to Coca Cola’s “Share a Coke” promo.

While weather was generally mixed, lower gas prices drove higher foot traffic, which contributed to solid sales across all categories.

“We believe heading into Q3 earnings, risk/reward remains favorable based on solid results from both Coca Cola and Monster,” noted Bonnie Herzog, managing director, beverage, tobacco and convenience store research for Wells Fargo Securities.

Herzog noted that based on the Beverage Buzz survey, Wells Fargo estimates that Monster’s c-store volume grew +9% in Q3 2014 with +1% net retail pricing growth. “The strong volume improvements were at least partially attributable to higher promos (up +4.4%), and ongoing strength of Ultra. Early reads on Ultra Black and Ultra Sunrise are very positive, with one major retailer reporting +30% incremental sales growth for Ultra driven by new innovation. Interestingly, our retailer contacts have also seen benefits from merchandising Monster products outside the energy shelves (62.5% of retailers stock Monster products outside energy shelves),” she said.

“Further, with Red Bull’s 4-6% price increases coming in Jan 2015, we think Monster will benefit in FY2015 regardless of whether it follows (through increased top-line growth via pricing) or maintains prices (through greater market share),” Herzog added.