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Beverage sales were sluggish during May, according to tracking of retail channels by Nielsen. BNP Paribas analyst Kevin Grundy highlighted that the soft data supports a persisting theme of broad slowing in U.S. consumer staples demand that has been seen over the last few months.
For the four-week period that ended on May 31, Coca-Cola (NYSE:KO) soft drink and water beverages once again outpaced PepsiCo (NASDAQ:PEP) beverages by a wide margin. Keurig Dr Pepper (KDP) held market share with gains in soda products and K-cups. Notably, Vita Coco’s (NASDAQ:COCO) coconut water products showed the fastest growth in the sub-sector, with a 10.2% year-over-year gain.
Sales of energy drinks outpaced every other category in May. Celsius Holdings (NASDAQ:CELH) sales soared 23.5% over the four-week period as the dramatic Alani Nu acquisition factored in. Ghost (+10.6%), Red Bull (+19.1%), and Monster Beverage (NASDAQ:MNST) (+8.4%) also performed strong as consumers continued to funnel into the broadening energy drink category that also encompasses some reduced-caffeine wellness options.
In the beer category, Anheuser-Busch InBev (BUD) outpaced sales of both Molson Coors (NYSE:TAP) and Boston Beer (NYSE:SAM) over the four-week, 12-week, and 52-week tracking periods. While the beer giant continues its strong recovery from the Bud Light debacle in terms of market share, sales are still slightly lower than a year ago. Constellations Brands (NYSE:STZ) was the top performer in beer and carved out a bit more market share over the last four weeks. Overall, beer sales fell 3.6% during the four-week period.
Spirits sales and wine sales were also lower than a year ago in a read that could be troubling for various companies, such as Diageo (NYSE:DEO), Brown-Forman (NYSE:BF.A) (NYSE:BF.B), Duckhorn Portfolio (NAPA), Willamette Valley Vineyards (NASDAQ:WVVI), and Vintage Wine Estates (OTC:VWESQ). Brown-Forman (NYSE:BF.A) (NYSE:BF.B) CEO Lawson Whiting recently warned that something bigger may be in play as pressure from cannabis, weight-loss drugs, and lackluster demand from Generation Z continues to pressure demand.
“We’ve been saying that for 1.5 years now. And I know on the sell-side that the world seems to be a little bit split on the extent of the pressure that it’s putting on our category. We’d be naive if we didn’t say that there isn’t some pressure coming from those,” stated Whiting on the company’s last earnings call.