Poor Weather Leads to Softness in Beverage Trends, Says Goldman

March 28, 2013 3:13 PM EDT Send to a Friend
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Broadly speaking, Q1 beverage trends appear tepid in part because of better weather in Q1 last year, according to a report today by analysts at Goldman Sachs, citing Nielson data.

For the four weeks ending March 16th, the Liquid Refreshment Beverage (LRB) category, which includes waters and teas, declined 1.4 percent on flat volume and 1.5 percent decline in price/mix.

Carbonated soft drinks (CSD) declined 3.4 percent driven by a 5.2 percent decline in volume and 1.9 percent increase in price/mix.

"Coca-Cola Company (NYSE: KO) sales/volume/price was weaker at -2.5%/-2.9%/+0.5. Dr Pepper Snapple Group (NYSE: DPS) CSD trends roughly mirrored KO, with sales and volume down -2.4%/-2.9% respectively. Both are below recent trends. Pepsico, Inc. (NYSE: PEP) CSD sales were disappointing, down -4.0% on -7.4% volume, despite easy volume compares," said Goldman analyst Judy E. Hong.

In energy drinks, Monster (Nasdaq: MNST) grew 2.9 percent on a 4.4 increase in volume. This was against "particularly tough year-ago comps," noted Hong.

Overall beer was lower by 0.8 percent.

"Boston Beer Co. (NYSE: SAM) beer sales grew only +0.5% on -0.1% volume decline. Weakness in the seasonal offerings (down -17.9%) was the key driver of softer sales. Molson Coors Brewing Company (NYSE: TAP) sales were slightly below trend, with sales/volume down -1.4%/-2.1%. We note that this period ends March 16th, while St. Patrick's Day, a large beer-drinking occasion, is March 17th. Constellation Brands Inc. (NYSE: STZ) led the beer category with +4.7% sales growth, driven by +5.4% volume change. STZ wine sales were also strong, up +8.4% (on +9.2% volume and -0.7% price/mix)," said Hong.


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