Dive Brief:
- C-store retailers expect beverage sales for this year to grow 3.7%, an increase from the 3.4% they anticipated last quarter, according to a survey by Goldman Sachs.
- Energy drinks were the star of the show during Q2, with retailers reporting a fourth straight quarter of growth and expecting a 12% increase in the category for the full year. Energy drink sales in 2024 grew by just 6%.
- Traffic remained under pressure, down slightly year over year in Q2. However, retailers expect traffic to grow by 1.1% for the full year, a significant gain from last quarter, when they thought traffic would be flat.
Dive Insight:
Goldman Sachs’ report attributed c-stores’ optimism around the beverage category to “much improved weather trends,” which boosted traffic over the July 4 holiday. Lower gas prices also promoted more summer trips for c-stores to capitalize on.
However, the report noted “the challenging (and volatile) macro environment remains an area of concern.” The U.S. consumer confidence index rose 2% in July, though it remains below last year’s levels and a recession isn’t off the table yet.
Big winners among energy drinks during the quarter included Red Bull and Ghost, which saw year-over-year sales jump by double digits in the second quarter, and Alani Nu, which grew sales by 45%, according to the report. Monster saw 8% gains, on the strong launch of its Ultra Vice Guava flavor.
Prime continued to tumble, with sales down 15%, and retailers saying they expect losses for influencer Jake Paul’s beverage line to continue.
Retailers also noted that promotional activity from manufacturers is slowing compared to last quarter, and three-quarters of them expect manufacturers to push price increases through later this year.
Goldman Sachs surveyed operators representing around 37,000 c-stores, or around a quarter of the industry in the U.S., for this report.
