Citi highlights energy drink growth despite convenience store weakness

Investing.com - Citi analysts reported subdued conditions in the convenience and fuel retailing industries following the National Association of Convenience Stores conference, where they met with management teams from energy beverage companies including Monster Beverage (NASDAQ: MNST) and Celsius Holdings (NASDAQ: CELH), soft drink makers Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), and Keurig Dr Pepper (NASDAQ: KDP), and alcohol beverage companies Constellation Brands (NYSE: STZ), Molson Coors (NYSE: TAP), and Boston Beer (NYSE: SAM). The tone was more subdued than last year due to softer traffic and consumption levels amid higher gas prices and lower-income consumer pressure.

Monster Beverage showcased a Monster Protein Energy line planned for March 2027, featuring 30 grams of protein and 160 milligrams of caffeine in 12-ounce cans in Vanilla and Chocolate flavors, plus flavor extensions across Ultra, Juice, Bang, and FLRT. Celsius Holdings featured its Winter 2026 Spritz Vibe limited-time offering, a sparkling Shirley Temple-inspired drink launching this month, and its new Celsius Energy + Hydration line rolling out in the first quarter of 2027 with 670 milligrams of electrolytes and 200 milligrams of caffeine in 16-ounce cans.

Coca-Cola plans to test-launch prebiotic sodas across its Coke Zero, Sprite Zero, and Fresca lines with 6 grams of fiber in New York, New Jersey, and Pennsylvania in late October, and will introduce new Coca-Cola flavors including Cherry Lime in February 2027 and Strawberry Float in summer 2027. PepsiCo is launching Pepsi Strawberry Shortcake in February 2027 and Gatorade Gatorlyte Longer Lasting, a new high-electrolyte beverage and powder line, also in February 2027. Keurig Dr Pepper will launch Dr Pepper Ice Cream Float nationwide in February 2027.

Molson Coors is planning a 2027 national launch of its non-alcoholic Coors 0.0 product following a soft launch in select Northeast markets in May 2026. Constellation Brands featured its higher-alcohol Modelo Chelada Suprema line with new variety packs and showcased new brands including Right Hook, a hard punch brand launching in March 2027, and Wildish Pop, a vodka-based hard soda with 4.5% alcohol by volume and 100 calories.

US scanner data shows continued softness in the gas and convenience channel, with trends weakening materially since the Iran conflict started as fuel prices remain elevated. Regular gasoline prices rose 59% from January and 43% year-over-year to $4.47 per gallon in the week of September 28, while on-highway diesel reached near-record levels at $6.38 per gallon, up over 80% from the start of 2026.

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