While beverage sales continue to drive top-line sales and bottom-line profits for convenience stores it is the mix and match meal bundling that sets apart the real winners within the space according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
According to Bonnie Herzog, managing director at Goldman Sachs, c-store retailers expect beverage sales to increase mid-single digits in 2023 compared to the expectations of high-single digits previously. The takeaway was part of Goldman Sachs' fourth quarter Beverage Bytes survey, which represents roughly 30,000 retail locations, or approximately 20 percent of the convenience channel.
"Overall, retailers remain positive and upbeat around the opportunity in energy drinks, but are increasingly concerned about the impact of broader economic pressures, recession risk and manufacturer price increases on consumer discretionary spending," Herzog said.
Retailers said out-of-stocks remain a headwind in the alcohol and nonalcohol segments, though to a lesser degree than prior surveys, with the majority of retailers noting a sequential improvement, she noted.
Other key takeaways from Beverage Bytes include:
· The energy drink category remains very strong and the outlook is incrementally more positive, with expectations for sustained double-digit percent growth in 2023 — on top of double-digit percent growth in 2021 and 2022;
· Shelf/cooler space allocation for nonalcoholic beverages is expected to remain unchanged this year, although retailers note plans to allocate incremental space to Celsius Holdings Inc. and incumbent energy drink brands Monster and Red Bull while cutting space for Bang;
· Hard seltzer sales growth in c-stores were down 4 percent year over year in the three-month period (a slight sequential decline) and retailers expect the category to remain flat in 2023; and
· Shelf/cooler space allocation for alcoholic beverages will be higher in 2023, as indicated by approximately 43 percent of retailers.
Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869