Friday, 20 January 2017 16:41

The 2017 Forecast for Beverages

Projections are positive for both packaged and alcoholic beverages.

While convenience stores are evolving in terms of the products and services they offer consumers, they remain a primary destination for those who want to make a quick beverage purchase.

Seven in 10 retailers (70.6 percent) expect their packaged beverage sales to increase in 2017, and only 2.9 percent expect sales to decrease. The projected net change is 3.3 percent, according to the findings of the 15th annual Convenience Store News Forecast Study.

The CSNews Forecast Study provides dollar and unit volume projections in key c-store product categories based on data from various sources, including Nielsen for category sales history; TDLinx for store counts; and government sources for motor fuel volume and pricing data. The data is then run through a sophisticated projection model and presented in summary form. Maureen Maguire, founder and CEO of New York-based ThinkResearch, oversees the Forecast Study process.

C-store operators are right to be optimistic. According to the CSNews Forecast Study numbers, dollar sales of packaged beverages — which includes carbonated soft drinks, bottled water, sports and energy drinks — will increase 5.2 percent across the total industry. On a per-store basis, dollar sales are expected to increase 4.5 percent, and unit volume is expected to increase 4.1 percent. All of these figures are above the estimated results for 2016.

Although they still take up the most space inside convenience store cold vaults, carbonated soft drinks are likely to see another year of status-quo growth in 2017, with an expected rise of 0.9 percent in dollar sales per store and 1.3 percent in unit volume per store.

Perhaps reflecting consumers' growing interest in healthy eating and drinking habits, or even concern over the safety of tap water following national coverage of the water crisis in Flint, Mich., bottled water will see more growth in dollar sales per store (up 4.4 percent) and unit volume per store (up 2.3 percent), although this marks a slowing compared to 2016.

As for alcoholic beverages, price increases are likely to boost beer dollar sales in 2017, which are expected to rise 1.4 percent per store and 2.1 percent for the total industry. Unit volume is forecasted to be flat. C-store operators believe the biggest impact on beer will come from states implementing new laws regarding beer sales, such as Pennsylvania did in 2016.

The continued popularity of craft beer is a likely contributor to higher prices. Dollar sales of microbrews are expected to increase 12.6 percent while unit volume increases 11.1 percent, both on a per-store basis. This marks another year of slowing growth for the segment, but retailers note it remains "hot," with some reducing their stock of domestic brews in favor of craft. One retailer stressed the importance of "stay[ing] relevant with evolving brands in craft."

Angela Hanson
http://www.csnews.com/industry-news-and-trends/special-features/2017-forecast-beverages

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