WATER, ISOTONIC SALES GUSH IN TEXAS HEAT

RICHARD TURCSIK

DALLAS -- A month of unrelenting triple-digit temperatures has resulted in a Texas-sized gusher of increased water and isotonic beverage sales for retailers in the Lone Star State.

They report that shoppers are shying away from soft drinks, chilled juices and other beverages and concentrating their buying power on water. And they are also snapping up the ice cubes to cool it off.

Sales of water are so strong that some retailers are encountering shortages: not because the wells have run dry, but because the plastic factories can't produce bottles fast enough to keep up with demand.

"Our water sales have really gone through the roof," exclaimed Gary Price, vice president of merchandising at Minyard Food Stores, Coppell, Texas.

"In our gallon-jug bottled drinking waters, the best item we had last summer was averaging about 500 cases a week; this summer it is selling 6,000 cases a week," he said.

Tye Anthony, group vice president for nonperishables at Randalls Food Markets, Houston, said his company has seen a definite increase in sales of bottled water, isotonics and ice cubes in its three operating markets of Houston, Austin and Dallas/Fort Worth.

"We haven't seen any shortages, but we have had extremely brisk sales of beverages, especially the isotonic beverages and water. Our sales are really up -- well above average," he said.

Anthony said Randalls has been building floor displays of the isotonics and waters.

"It doesn't pay to put them on the shelves because they sell so quickly," he said.

Greg Patton, buyer for Sam's Club Dallas division in Carrollton, Texas, reports that his water sales are "fabulous," but could be even stronger.

"We're having trouble with the manufacturer actually filling our needs. They have the water, but we are surpassing their expectations," he said.

"We are buying water from just about any source that we can," he added.

Price of Minyard said the heat has opened the floodgates on sales of the single-serve PET bottled waters, resulting in supply shortages.

"We had a bunch of promotions on the PET bottles to sell them at reduced prices and we had to call our promotions off because they couldn't get enough bottles. I don't know if it is a raw material shortage or if they can't make the bottles fast enough," he said.

While water and isotonic sales are rising, soft drink sales have not increased more than a trickle.

"With soft drinks it is our improved [private-label] packaging and stockkeeping unit extensions that are really driving the volume. Our can volume is basically flat or a little above, so our other packaging is really driving the sales," said Patton of Sam's Club.

"The warm weather is strange," he added. "Milks and orange juices do well because people [always] drink them, but they are not connected with relief from the heat."

Price said the soft-drink companies tell him that a heat wave really doesn't affect pop sales either.

"Our company is up an average at least 10% across the board. That doesn't have anything to do with the heat, but rather the way that we promote drinks," he said, noting that Minyard heavily promotes the soft-drink category.

Price said Minyard is the leading seller of ice in the Dallas/Fort Worth metroplex, and sales of 8- and 20-pound bags of cubes and crushed ice have been very high.

"We buy our ice directly from an ice company on pallets and sell it through our warehouse on the pallet. The other chains have in-store ice makers and make their own. We can't do that because those machines couldn't keep up with our volume," he said.

"A lot of our stores are in areas of town where customers don't have ice makers at home, so they buy it every day at the store," he continued.