Positive beverage sales trends have U.S. convenience retailers feeling optimistic despite this year’s economic shock waves, with growth outlook rising 3.4%, according to a Goldman Sachs survey representing around 25% of the channel.
Sales Ticking Up
Total beverage sales growth in the channel (excluding bev-alc) jumped 3.4% during Q2 (compared to +1% in Q1), thanks in part to strong performances from hydration and energy drinks.
Over the 4th of July holiday weekend, sales picked up 6.9% year-over-year (+4.3% of the same period in 2024), with traffic rising 3.8% (3.1% last year).
Retailers now are expecting the beverage category to grow 3.7% for the year, along with a 1.1% increase in store traffic. That’s slightly higher than in the Q1 survey, but broadly in line with 2024 growth (+3.8% sales/+1.3% traffic).
Traffic, Pricing Still Pressured
Though sales are up in c-stores, in-store traffic slipped in Q2, falling 0.2% from the same period last year. Still, that’s better than the 2% drop from Q1.
Survey respondents offered theories on the slowdown; one retailer noted consumers seeking out promotions and trading down on price, while another saw both shoppers and fellow store owners in wait-and-see mode.
But those promos may be harder to find than before: After 57% of retailers saw signs of increased promotional activity in Q1, only 27% felt the same way in Q2, and 13% said it was currently decreasing. That seems unlikely to change, as three-quarters of retailers are expecting companies to hike prices rather than promote more — a considerable jump from 61% in Q1.
Going further, 60% of retailers think more pricing is coming before the end of the year. Most (47%) are expecting that hike to be less than 3%, but 13% are projecting that to be higher (up from 7% in Q1). One retailers predicted higher prices are coming as manufacturers react to U.S. tariff policies.
But could consumers revolt? Some retailers think so, suggesting shoppers are turning away from c-stores and gravitating towards discount retailers, or from singles to case packs.
Energy Still Strong
Energy drinks remain a c-store powerhouse according to the survey, with sales rising 12% year-over-year in Q2, almost double the figure in Q1. Store owners are now projecting the category to grow by the same rate for the full-year.
Retailers dropped a few telling comments in the survey regarding energy: one noted that Alani Nu grew over 100% in Q2 (vs 27% in Q1) and is now the #3 brand in the category by a wide margin, while another said they were removing faltering PRIME from their set altogether. Over 50% of store owners characterized Monster Ultra Vice Guava’s performance as “very strong,” and none said it has done poorly.
Here’s the individual brand breakdown:
Monster: Sales +8% in Q2 (+4% in Q1), +7% for the year.
Red Bull: Sales +13% in Q2, 14% for the year.
Celsius: Sales +8% in Q2, +5% for full-year (projected)
C4: Sales +3% in Q2 (+4% in Q1), +5% for full-year (projected)
Alani Nu: Sales +45% in Q2 (+27% Q1), +41% for full-year (projected)
GHOST: Sales +12% in Q2 (+7% Q1), +6% for full-year (projected)
Bang: Sales -6% in Q2 (-1% Q1), -3% for full-year (projected)
PRIME: Sales -15% in Q2 (in-line with Q1), -16% for full-year (projected)
Soda Looking “Better”
The rapid expansion of “modern” or “better-for-you” soda is being felt in c-stores, with 73% of retailers indicating they plan to increase shelf space for those brands, with the rest intending to maintain existing allocations.
Poppi appears to be a winner within the Pepsi system, respondents said, thanks to wide demographic appeal and favorable price point relative to chief rival Olipop. Culture Pop is also in the mix — one retailer noted sales are up 127%. Yet another said there was no clear leader in the space, which remains niche compared to CSDs overall.