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November 27, 2017

Where carbonated soft drinks are slipping, RTD coffees and sparkling water are picking up the slack.

According to National Association of Convenience Stores (NACS) data released this summer, carbonated soft drinks (CSDs), energy and sports drinks, water, juices and teas, accounted for about 15% of total in-store sales for convenience stores in 2016.

“Beverage sales are often impulse purchases so store traffic is one of the keys to improving packaged beverage performance,” said Gary Hemphill, managing director of research for the Beverage Marketing Corp.

SLIDING SODA SALES
The demise of carbonated soft drinks cannot be solely attributed to sugary drink taxes—only a handful of cities currently have enacted them. Rather, sales have been on a downward trajectory for the last few years as consumers are turning to healthier beverage options to satisfy their thirst.

CSDs lost 3.3% in unit sales in all retail channels for the four-week period ending Oct. 7, according to Nielson research, reported by Wells Fargo Securities.

Even new CSD product offerings have struggled to make an impact, such as the super soda Monster Mutant, a collaborative venture between Monster and Coke.

“It has been slow to gain momentum,” said Mike Nelson, category manager for Plaid Pantry. The Beaverton, Ore.-based company operates 110 stores in Oregon and Washington State. “We plan to address the CSD decline issue with expanding other categories such as ready-to-drink (RTD) coffee, tea [and] enhanced/sparkling waters.”

WATER LEVELS UP
Earlier this year, bottled water sales set a new record when it surpassed soda for the first time as Americans’ top beverage of choice. Indeed, the subcategory has been consistently producing healthy volume gains for the past several years. Ironically, year-over-year comparison indicates a blip this summer when growth slowed substantially between June and August, only to rebound in September.

For the four-week period leading up to Oct. 7. Nestlé Pure Life and Dasani each registered 9.9% gains in unit sales and Aquafina jumped 8.1%. Of the three brands, which represent the majority of the market share, only Nestlé posted growth (0.5%) for the 12-week period while sales for Aquafina and Dasani dropped 1.1% and 2.7%, respectively.

Looking at c-store rings, sparkling water appears to be faring much better.

La Croix and Sparkling Ice each claim slightly more than one-fifth of the dollar share, but La Croix outsold its competitor in unit sales for the four-weeks ending Oct. 7 with a 51% gain compared with 1.4% for Sparkling Ice, according to Wells Fargo Securities. Dasani’s sparkling flavored water also posted impressive gains of nearly 45%.

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