Monster Energy is “all-in on alcohol” and “thinks it could be big for them by 2025,” according to Goldman Sachs equity analyst Bonnie Herzog’s report from the National Association of Convenience Stores (NACS) trade show.
The energy drink maker, which entered beverage-alcohol with the acquisition of CANarchy in January 2022, displayed its forthcoming hard tea, Nasty Beast Hardcore Tea during the show, Herzog wrote.
Nasty Beast is slated to launch in February 2024 with four flavors: original, half and half, “razel berry” and green tea. The flavored malt beverage (FMB) will be available in 24 oz. single-serve cans and 12 oz. sleek can variety 12-packs.
Monster aims to bring Nasty Beast nationwide in the first half of 2024, Herzog wrote.
Nasty Beast joins sister brand the Beast Unleashed, the 6% ABV FMB Monster debuted earlier this year. Both brand families heavily rely on Monster-inspired imagery, but do not use the energy drink’s brand name – something co-CEO Hilton Schlosberg said the company would not do in order to avoid confusion among underage consumers.
The Beast Unleashed was available in 28 states at the time of Monster’s Q2 earnings call and the company aims to be nationwide by 2024, Herzog wrote.
Monster’s foray into bev-alc seems to have brought incremental consumers into the fold, and more innovation products are imminent, as the team told Goldman Sachs “a lemonade hard [beverage] is coming.”
“According to company reps we met with, recent alcohol innovation has skewed towards MNST’s non-core consumer (i.e. females), suggesting alcohol sales could be helping to grow the MNST consumer base,” Herzog wrote.
Excluding the CANarchy brands (Cigar City, Oskar Blues, Wild Basin, Deep Ellum, Squatters, Wasatch, Perrin), Monster Brewing is the 23rd largest beer category vendor, with $62.9 million in sales in multi-outlet grocery and convenience stores year-to-date through September 10, according to market research firm Circana. Monster Brewing is the 17th largest beer category vendor in the convenience channel with $37.8 million in sales for the same period.
Constellation Brands’ C-Store Strategy: Core Brands, Betterment and Flavor
Constellation Brands – maker of popular Mexican imports Modelo, Corona and Pacifico – debuted “one of the biggest line-ups of innovation” at NACS, Herzog wrote.
“The c-store channel continues to be a big opportunity for STZ,” she wrote. “We expect the new product/packaging introductions coming in 2024 will help STZ drive incremental shelf/cooler space in the spring resets.
New for 2024 are developments in both flavor and packaging. The company is adding to its Modelo Chelada brand family with Chelada Fresa Picante and Chelada Negra Con Chile, and broadening the regional launch of Modelo Spiked Agua Frescas. For its sophomore year, Modelo Oro, the company’s Michelob Ultra challenger, is expanding to 18- and 24-packs. Pacifico will roll out 16 oz. can 4-packs.
Corona Extra will launch new slim cans “with an extra-wide mouth for lime fit” in certain regions and the company will expand its Coronita Extra 8 oz. can 12-packs “to expand new usage occasions through a portion-controlled size that increases portability/convenience.”
Constellation will introduce 24 oz. single-serve cans of Victoria nationwide.
Fresca Mixed – the spirits-based ready-to-drink (RTD) canned cocktails Constellation produces under a licensing agreement with Coca-Cola, which owns the Fresca brand – will debut a second variety pack with five new vodka-based flavors.
Constellation is the second-largest beer category vendor in the convenience channel, according to Circana. YTD through September 10, dollar sales of its portfolio have increased +17.6% and volume, measured in case sales, has increased +12.7%.
Anheuser-Busch InBev Says Bud Light Has ‘Stabilized’ in C-Stores
More than six months into conservative-led boycotts of Bud Light, Anheuser-Busch InBev (A-B) executives said the brand’s market share “is now stabilized” and they are “focusing on the opportunity to build back brand equity quickly,” Herzog wrote.
“ABI believes that Bud Light is still the No. 1 brand by volume in the c-store channel despite the recent controversy, given it remains widely available and sells ~50% more than competitor brands,” she wrote. “The focus is now on execution given shares have stabilized.”
A-B is leaning on its “Easy to Enjoy” campaign and its NFL sponsorship to regain share.
Busch Light, A-B’s other high priority beer brand in the convenience channel, “appear[s] healthy,” Herzog wrote.
A-B’s innovation slate features fourth category offerings, including Cantaritos Hard Soda, the 5% ABV FMB that A-B produces under a licensing agreement with Jarritos maker Novamex. A-B told Herzog sales are “already up +20%” in Circana-tracked stores. Other priorities include Cutwater Spirits, the No. 1 “full flavored” spirits-based RTD,” and NÜTRL Vodka Seltzer, a distant No. 2 compared to E. & J. Gallo’s High Noon Sun Sips. NÜTRL accounts for 11% of the segment, A-B told Herzog.
A-B “has not publicly announced any new pricing and is also not discussing it at this point,” Herzog wrote. She added that “some distributors noted that ABI could raise prices through a combination of front line price increases (albeit with some promotions thereafter) or by discontinuing promotional activity.”
A-B is the largest beer category vendor in c-stores, according to Circana. YTD through September 10, its dollar sales have declined -5.6% and its volume, measured in case sales, has declined -10.4%. A-B’s dollar share of beer in c-stores has declined -4.23%, to 34.78%.
Twisted Tea ‘Front-and-Center’ for Boston Beer
Boston Beer “underindexes” in c-stores, according to Herzog, who joined the company’s CEO Dave Burwick and sales leaders on a market visit in Atlanta following the NACS trade show. This makes the channel “a big opportunity” for Boston Beer, which performs better in grocery stores.
Twisted Tea, the company’s best-selling brand, is the ninth largest beer category brand family in c-stores YTD through September 10, according to Circana.
Boston Beer expects Twisted Tea “to get a little more assortment in the fall shelf resets,” Herzog wrote. To get there, the company is leaning into multi-packs, including its Twisted Tea Light 12-pack and Game Day 12-pack. Company sales leaders told Herzog Twisted Tea’s 12-packs are “the No. 2 in growth in all of beer.”
The emphasis on larger pack sizes has helped shift Twisted Tea’s volume from being 50-60% in 24 oz. single-serve cans “not so long ago” to about “mid-30%” in single-serves, Herzog wrote. Variety packs are about 20% of Twisted Tea’s business.
“We believe Twisted variety/multi-packs can be a nice driver of volume for SAM, but see some risk to GM [gross margin] as they are lower margin vs. singles (costs are quite a bit higher as variety packs need to be hand packed),” Herzog wrote, noting that Boston Beer’s automated variety pack lines at its production breweries are geared toward slim cans, which Twisted Tea does not use.
Truly Hard Seltzer has balanced its portfolio between light and bold flavors; last year, the latter accounted for 70% of the brand’s offerings, even as the overall segment was about 70% light flavors, Herzog wrote. Truly Margarita and discontinued Truly Tea account for about 75% of Truly’s share loss in 2023, Herzog wrote.
Truly innovation on display at the NACS show includes new variety packs for Truly Vodka Soda (Classic Pack with lime, mango, blueberry and pineapple and Paradise Pack with mango, watermelon, passion fruit and blood orange), and Truly Tequila Soda (grapefruit, lime, pineapple guava, and spicy watermelon). Both will roll out in December to c-stores with full liquor licenses, which the company estimates is about one-third of the channel.
Boston Beer is the fifth-largest beer category vendor in c-stores, according to Circana. YTD through September 10, its dollar sales in the channel have increased +9% and volume, measured in case sales, has increased +3.8%.
Molson Coors Looking to Continue Momentum Behind Coors Light and Miller Lite
Molson Coors has increased its c-store shelf and door space by 10% in the wake of the Bud Light boycotts, and company leadership “believes that the shift in market share from the Bud Light controversy is more structural and should stick,” Herzog wrote. The company “believes that the c-store channel is a huge opportunity worth several hundreds of millions of dollars.”
Both the Coors brand family (+20.1% in dollar sales and +14% in volume) and the Miller Lite brand family (+17.6% in dollar sales and +12% in volume) have increased share of dollar sales in c-stores by +0.78% and +0.51% year-to-date through September 10, respectively, according to Circana.
Pricing across the Molson Coors portfolio has increased +1-2% this year with a similar increase expected next year, Herzog wrote.
Trade show attendees’ interest was concentrated on Molson Coors’ beyond beer products, including Topo Chico Hard Seltzer, now the No. 3 hard seltzer, and Simply Spiked, both of which Molson Coors produces under a licensing agreement with Coca-Cola.
“TAP’s strategy with innovations is focused on being selective and going after known flavors, with a focus on curating an assortment via adding flavor extensions,” Herzog wrote.
New products include Peace Hard Tea, another Coca-Cola licensing agreement, Happy Thursday Spiked Refreshers, Simply Spiked Limeade and Blue Moon Non-Alcoholic.
Molson Coors is the third-largest beer category vendor in c-stores, according to Circana. YTD through September 10, its dollar sales in the channel have increased +13.8% and its volume, measured in case sales have increased +7.5%.