Now that summer has arrived, consumers are gravitating toward the cold vault at their local c-store, and they’re reaching for the latest trends as they look to experiment with new flavors and varieties. Retailers are responding by increasing their beverage selection. Energy drinks and water are among the segments retailers have seen flying out of the cooler doors.
Recent data from NielsenIQ showed dollar sales trending upward across beverage segments, but unit sales dipping across the board and inflation impacting prices in the category. Water dollar sales increased 15.4% for the 52 weeks ending April 29, while unit sales dropped 4.2% and the price per unit rose 20.4%, according to NielsenIQ’s U.S. Convenience data. Energy drinks grew 10.4% in dollar sales and 2.9% in unit sales as prices rose 7.3% for that same period. Soft drinks saw a 14.4% rise in dollar sales, and dipped 1.1% in unit sales, as prices increased 15.6%.
Beacon & Bridge Market, which has over 20 c-stores in Michigan, is one chain seeing an increase in sales for water and energy drinks.
“Water and energy drinks will continue to grow and take over a bigger piece of the overall category pie,” said Eric Patterson, merchandising manager at Beacon & Bridge Market. “For the last 90 days, energy sales at our stores have surpassed soft drink sales. I anticipate our soft drink customers making a shift to either energy or a healthier option.”
Portland, Ore.-based Plaid Pantry, which has 108 c-stores in the Pacific Northwest, also expects packaged beverage sales to increase by the end of 2023.
“We’re expecting double-digit growth this year in our packaged beverage category,” said Mike Nelson, senior category manager at Plaid Pantry. “I’d think 15-20% would be realistic as people are slowly getting back to routines that thankfully involve a stop for beverages.”
Variety is Trending
Retailers are also starting to notice consumers wanting a broader assortment of beverages to choose from.
“I think today’s customer wants variety,” said Nelson. “And they’re also looking for their drinks to ‘do something.’ Beverages with added functionality continue to grow.”
Beacon & Bridge Market has kept customers’ demand for assortment in mind by adding beverages that are trending to its cold vault.
“Our customers want assortment. A growing number of customers are demanding what they see their favorite celebrity touting on Twitter or Instagram. Prime is a case in point,” said Patterson. “This is a brand I barely considered; however, the Super Bowl, among other factors, has made them the hottest trend of the summer.”
Plaid Pantry also offers a wide assortment of beverages to meet the needs of its customers.
“As a company, we pride ourselves on selection, and the coolers are no different,” said Nelson. “Along with the usual, we offer lots of unique brands and categories. We do quite well with kombuchas, Yerba Mates and CBD beverages, just to name a few.”
While the latest trends are gaining traction, tried-and-true beverage favorites need ample space too.
“We focus most of our time and effort on the subcategories that really matter,” said Patterson. “Last year, we scaled back on dairy to add energy SKUs, and it paid off. So in 2023, we really took a look at underperforming categories and trimmed some low-hanging fruit to make room for even more energy drinks.”
All in all, retailers today need to have the courage to take risks with their cold-vault assortment. Retailers should take the time to know their demographics to grow their overall cold-vault sales.
“For the last 90 days, we’ve been trending at about a 20% increase in total packaged beverage sales. Will this taper off toward the end of the year? Absolutely. However, I think the changes we’ve made to our assortment will help us have a fantastic 100 days of summer and more than offset whatever shortcomings we may encounter at the end of the year,” said Patterson. “Luckily, we are seeing both significant dollar growth alongside unit growth in the subcategories that mean the most to our business.”