Many retailers attribute the sequential slowdown in beverage sales to poor weather conditions.
A number of factors contributed to a slowdown in non-alcoholic beverage sales during the second quarter of 2016.
In a new survey of beverage retailers from Wells Fargo Securities retailers revealed which factors led to the recent slowdown in non-alcoholic beverage sales.
The “Beverage Buzz” survey, which represented over 15,000 convenience store locations across the U.S., from Wells Fargo also revealed that:
- Non-alcoholic beverage sales were up +4.6% and alcoholic beverage sales were up +5% in the second quarter;
- Bottled waters, sports drinks, energy drinks and craft/import beers continued to outpace other categories; and
- Monster sales growth decelerated to +4.3%, which we attribute to:
- poor weather;
- recent price increases/lower promos; and
- share losses.
“Broadly, it appears poor weather is to blame for the overall sequential softness in beverage sales in the second quarter with over 50% of respondents suggesting weather had a negative impact on second quarter sales with one retailer describing May as ‘the worst beverage month we’ve had in the last couple of years,’” said Bonnie Herzog, managing director for Beverage, Tobacco and Convenience Store Research, Wells Fargo Securities. “We believe the risk/reward for beverage manufacturers and c-stores for quarter two results is neutral despite the sequential slow-down, since overall sales in c-stores remains healthy as customer traffic remains solid. However, we see a negative risk/reward for Monster given our expectations for a soft second quarter as well as a delay with its innovation.”