Ten Hot Trends Shaping America’s Convenience Stores – From Energy Drinks To…

Goldman Sachs analysts hosted their 12th annual guided tour of the National Association of Convenience Stores (NACS) Show in Chicago. Analysts met with executives from major beverage, food, and nicotine companies, including Coca-Cola (KO), PepsiCo (PEP), Constellation Brands (STZ), Boston Beer (SAM), AB InBev (ABI), Monster (MNST), Celsius (CELH), and Hershey (HSY), among others, providing clients with an unparalleled snapshot of current trends across the convenience retail channel.

The conference allowed analyst Bonnie Herzog and others to gauge real-time consumer behavior trends, assess category momentum, and understand corporate strategies across product innovation, pricing, and demand. This provided clients with an extremely valuable on-the-ground insight into how companies are adapting to shifting consumer preferences within the convenience space. 

Here are Herzog’s ten key takeaways from the conference and sideline meetings:

1. It remains all about energy drinks again this year with MNST, CELH, Red Bull and several others stepping up their game (especially MNST) with even more innovation, LTOs and flavors as well as an increased focus on female consumers with MNST rolling out FLRT;

2. Energy drink category demand remains very robust with many players suggesting retailers will continue to add incremental space to the category next year (this is consistent with what we’ve heard from our retailer contacts);

3. MNST remains on track with a selective price adjustment (i.e. increase) in the US by packaging type and channel later this year and while not announced, both CELH and Red Bull seemed open to the possibility of pricing and highlighted pricing is warranted;

4. Many companies (esp the brewers) are leaning in on special product/package innovation and marketing around the World Cup, the United States’ 250th anniversary and the Olympics next year;

5. Companies continue to focus on functionality with many highlighting new innovation including ingredients with probiotics, protein and fiber;

6. Most companies’ booths were well-attended (esp MNST, CELH, KO, PEP, MO & ABI) and showcased stepped-up innovation (esp PEP) with a continued focus on flavors (both food & beverage);

7. Many companies are focused on value during a time when the consumer is under increased pressure – with a focus on driving volume & improved traffic trends;

8. Package innovation was front and center again this year from singles in alc/beer, variety packs to smaller/mini sizes – providing greater affordability options & catering to younger demographics;

9. Consumers continue to gravitate toward healthier beverage/food options – with zero sugar a big area of emphasis again this year; and

10. In alcohol, the big focus was on flavors and even higher ABV beverage innovation from many, with TAP pushing past their self-imposed 8% ABV cap and rolling out a new 12% ABV 7.5oz can. Lastly, we were pleasantly surprised to see how active PM & MO’s booths were this year – as they both showcased their smoke-free products & technology. It’s clear that the competitive environment for nicotine pouches has intensified with stepped up promos, more innovation and greater spend behind the category as all the players fight for share. 

Following the meetings, Herzog told clients, “Overall, we came away most impressed with PEP, MNST, ABI & HSY – all of which are focused on stepping up consumer-centric innovation.” 

ZeroHedge Pro Subs can find the full note in the usual place, which provides much more insight into consumer trends across convenience stores.