2012 Category Breakdown, Part 4: Beverages

Published in CSP Daily News

Double-digit growth in several areas makes for healthy year so far

By  Steve Holtz, Online News Director & Beverage Editor

[Editor's Note: In its second-annual category review, CSP takes a look at first-half 2012 sales data to determine how the industry is performing so far this year. In this five-part CSP Daily News series, we look at four major categories. For the complete report, see the September issue of CSP magazine.]

OAK BROOK, Ill. -- Arguably, the cold vault of the convenience store industry was built on the back of three beverage categories: milk, carbonated soft drinks (CSDs) and beer. Today, that core is in a remarkable state of flux.

During the first half of 2012, milk volume sales in c-stores shrank 5%; CSDs, following on a couple of slow years, have seen a welcome 3% increase; and beer, well, thank goodness for beer.

It has grown 5% in volume even as price increases boost sales-dollar growth over the 9% mark, according to year-to-date Convenience AllScan data from SymphonyIRI Group, Chicago, through June 10, 2012.

Based on those basics, it would be easy to assume the beverage category is pretty flat for the first half of the year. Look closer, and a wonderland of consumer curiosity comes into focus: Six of the top 10 beverage subcategories--energy drinks, bottled water, sports drinks, ready-to-drink teas and coffees, juices and juice drinks, and high-ticket wine--actually saw double-digit growth.

"This year, energy and sport drinks are driving growth [in my stores], which I think is what the industry is seeing as a whole," Mike Adams, senior category manager for BP/ampm stores, La Palma, Calif., told CSP Daily News. "It's mostly on the noncarbonated side vs. CSDs that we're seeing growth. Not that CSD is negative; but if you look at the overall growth rate, it's a lot higher on the noncarb side."

Certainly, weather has a lot to do with: A mild winter and hot spring/summer is just the ticket to draw customers into the store from the gas pump or just for a refreshing treat, retailers said.

Also helping are more consistent messages put out by retailers letting customers know there's value--"not the hottest price on the street, but a good price"--to be had inside the stores.

The categories, according to retailers, that could benefit from more innovation: iced tea and sports drinks. And which ones need to cool it? Energy drinks.

By Steve Holtz, Online News Director & Beverage Editor
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