It’s unlikely that anyone will ever encounter a genuine jackalope, Bigfoot, Wampus cat or North American convenience store that doesn’t sell packaged beverages. According to 7-Eleven, more than two-thirds of customers’ store trips include a beverage purchase, making it essential to provide a broad selection of drinks to satisfy consumer preferences.
In 2023, packaged beverages were the second largest contributor to c-store in-store sales when excluding foodservice categories, according to NACS State of the Industry data.
“Packaged beverages made up 17.96% of in-store sales and totaled $40,014 per store, per month in sales on average,” said Emma Tainter, research analyst and writer at NACS. “This was an 8.2% increase year over year. Energy drinks were the largest contributor to packaged beverage sales in 2023, reclaiming the number one spot after coming in second to carbonated soft drinks in 2022.”
You’re seeing a lot more ‘clean’ energy drinks, and manufacturers are being very transparent about the ingredients.”
“Year over year, energy drink sales increased per store, per month by 16.3%. Sales went from $9,229 in 2022 to $10,737 in 2023,” she said. “You’re seeing a lot more ‘clean’ and better-for-you energy drinks, and manufacturers are being very transparent about the ingredients. They’re promoting them as a healthy way to get your energy.”
Perk Up Plus
The packaged beverage category is made up of nine subcategories: carbonated soft drinks, RTD iced tea, sports drinks, juice/juice drinks, bottled water, other package soft drinks, energy drinks, enhanced water and the newest category, RTD coffee.
Energy drinks, which first started to be a defined segment in 1987 with the launch of Red Bull, are leading the category in sales. The U.S. energy drink market was valued at $25.8 billion last year, according to Custom Market Insights, and is expected to hit $50.8 billion by 2033.
Impressive sales growth is occurring in functional SKUs and better-for-you beverages. The latest brands on the market—some produced by small, regional manufacturers—are aimed at consumers who want clean-label beverages that may improve cognitive performance, stress relief or gut health.
Functional beverages are attracting Millennial and Gen Z shoppers—together, the two generations make up almost 40% of the U.S. population. NielsenIQ reports that Gen Z’s spending power will be approximately $12 trillion by 2030.
Functional beverages may include vitamins, antioxidants, prebiotics, dietary fiber and adaptogens, as well as herbal ingredients used in traditional medicines, such as turmeric, ginger, mushrooms and ginkgo. To protect their proprietary formulas, most brands don’t disclose the amount of active ingredients in their beverages.
Recently, PepsiCo bought Poppi, a maker of beverages that include apple cider vinegar, prebiotics and fruit juice, for almost $2 billion, a sure sign that these beverages aren’t just here to stay, but are here to grow.
“Probiotics, or anything that assists with gut health, are appealing right now,” said Donna Hood Crecca, principal at Technomic. “And we’re seeing consumers—especially younger consumers—interested in plant-based beverages and enhanced protein.”
In addition to health benefits, “consumers are looking for innovation and new flavors,” said Lex Shankle, executive vice president of global sales for Celsius, which produces energy drinks containing ingredients such as guarana seed extract, ginger, green tea and essential vitamins.
Fruit flavors are perennial favorites, but this year, experts predict an increased demand for tropical tastes, such as banana, pineapple, kiwi and coconut. Celsius recently introduced two new flavors: sparkling strawberry passionfruit and Retro Vibe, which blends orange and lime flavors with raspberry.
“You must have new flavors,” said Shankle. “That’s staying relevant, and it allows us to continue bringing new consumers to the category.”
Bundles and Bargains
Packaged beverages are a great addition to meal deals and bundled promotions that encourage customers to try new products.
“Bagged lunches include our signature sandwich, chips and a canned soda.”
In Virginia, The Market by Tiger Fuel runs a thriving catering business, providing area residents with bagged lunches, trays and platters of prepared foods. Canned beverages have made a significant contribution to that growth.
“Our catering numbers have skyrocketed year over year, and a big focal point of that is our bagged lunches,” said Nick Rogers, retail merchandising manager for The Market. “Bagged lunches include our signature sandwich, chips and a canned soda. You’ll see The Market bagged lunches everywhere, from conference room tables to charity golf tournaments.”
Recently, Texas-based TXB created packaged beverage and food pairings for breakfast and lunch via digital coupons. “Customers get a dollar off the purchase of a TXB quesadilla and an RTD Starbucks coffee,” said Ben Hoffmeyer, vice president of marketing and merchandising at TXB. “We plan to expand our TXB Rewards app digital coupon to other brands, including Red Bull, Monster, Celsius, Gatorade and Bodyarmor, and tie them in with our hero foodservice items across various dayparts.”
7-Eleven adds canned beverages to various food bundles, which offers customers value-driven meal options. “For our 7Rewards and Speedy Rewards members, we have offered a $4 meal deal at Laredo Taco Company, which includes a chorizo breakfast taco and any 8.4 oz Red Bull,” said a spokesperson for the Texas-based chain. “Additionally, at Raise the Roost and Speedy Café, members can enjoy a $4 meal deal, which includes a croissant breakfast sandwich and any 8.4 oz Red Bull.”
Celsius has also teamed with various c-store operators to create food-and-beverage bundles. “Casey’s is famous for their pizza, and we ran a promotion featuring Celsius and slice of pizza,” Shankle said. “We also ran a food bundle with 7-Eleven featuring taquitos, and we’ve had a packaged snack bundle. We have several more food bundles scheduled this year.”
For smaller chains that want to team up with a national brand to develop similar bundle promos, “They should work back through their sales channels and talk with their account team,” Shankle advised.
Private Label
Sales of private-label products hit a high in 2024 at $271 billion, according to the Private Label Manufacturers Association. That was a sales increase of 3.9% compared to the previous year, and it outpaced the growth of national brands, which grew 1% year over year. Part of that growth came from private-label packaged beverages.
Private-label products are becoming increasingly popular at Yesway and Allsup’s stores as consumers seek high-quality, cost-effective options. “We offer a variety of private-label items under our packaged beverage category, including tea, water, lemonade and milk that have all proven to be very successful,” said Alan Adato, senior manager of merchandising and procurement for Yesway, which has headquarters in Texas.
“Yesway and Allsup’s provide a great assortment of quality beverages at a value price, and we’ll continue to introduce new products in the future in both packaged beverage and other categories across the store,” he added.
Over the past few years, Iowa-based Casey’s General Stores has sold various proprietary products, including packaged beverages, bottled waters, juices, teas and lemonades.
At Casey’s, “Our marketing team continually looks for innovative ways to highlight our newest products and drive trial, and we utilize our Casey’s Rewards program to increase awareness with targeted offers for guests,” said Chris Stewart, vice president of merchandising for Casey’s. “Our merchandise teams are consistently engaging with brand partners to develop exclusive brands and flavors because we want to give our guests ‘Only at Casey’s’ offerings.”
TXB refreshes shoppers with its “TXB Hydration Sports drink line, PH+9 Alkaline Water line, TXB Packaged Tea line and packaged TXB Nitro Coffee line,” said Hoffmeyer. “We also offer TXB Fresh Brew Tea, including our latest flavor, watermelon tea. This year, we’re exploring larger package sizes to provide customers with greater value, as well as more unique tastes, like flavored and functional lemonades.”
Under its proprietary 7-Select brand, 7-Eleven stores offer shoppers a selection of water, sports drinks, juices and teas. In 2019, the company launched 7-Select Replenish, a functional energy drink and it’s first in the category. The Replenish line recently underwent a packaging redesign with the goal of reducing plastic waste and enhancing transportation efficiency.
Packaged beverages are great additions to meal deals and bundle promotions that encourage customers to try new products.
In 2024, the company introduced sugar-free 7-Select Fusion Energy in four flavors. “Energy drinks were among our top selling items over the last year,” said the 7-Eleven spokesperson. “Fusion Energy provides a flavorful boost to elevate energy, enhance mood and support mental sharpness—all without artificial colors or high fructose corn syrup.”
Last year, the chain also added three flavors of 7-Select Rehydrate, a hydration beverage combining five electrolytes and vitamins. A new addition to the line is 7-Select Rehydrate Zero, a sugar-free version of the original.
The steady growth of private-label beverages and other merchandise is expected to continue. A 2024 survey by market research company Numerator found that 7% of U.S. consumers believe private-label brands provide above-average value for the price, and 51% of consumers say they are very likely to continue buying private-label products, even if the economy improves, according to the Food Industry Association.
While specific figures are not available for the total number of new beverage introductions last year, manufacturers are responding to consumer preferences, and the packaged beverage category will continue to evolve. While that makes for a dynamic marketplace, it can be challenging for c-store retailers with limited in-store space.
“Shelf space is and will always be the recurring theme when making category decisions,” said Rogers of The Market. “New entrants mean creative thinking when it comes to space and promotion. We merchandise packaged beverages together based on themes, both in the cooler and center store. The category is so critical to our growth that we also take our messaging and promotion outside of the store, being sure to include the category in our LTO promotions, samplings at our rewards program’s events and NIL activations.
“There’s never a dull moment in retail merchandising,” he continued. “But it’s a fantastic feeling when the puzzle pieces fit together, and a new packaged beverage brand grabs our customers’ attention.”