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According to Celsius Holdings CEO John Fieldly, the company is looking at expanding into “adjacent categories." I don’t know about you…but doesn’t that sound like something I predicted in November 2023? Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $402 million, which was up 23% YoY. During the trailing twelve months, Celsius Holdings smashed through the billion-dollar mark…with the energy drink brand generating $1.49 billion in revenues over that period. According to Circana last 13-week data, Celsius was the number one brand driver of unit and dollar sales growth in the energy drink category. In addition, according to the trailing 4 weeks of Circana all tracked channel data for the period ending July 14, 2024, Celsius is now securely the third-largest energy drink brand in the category. Its market share grew about 1.4 percentage points YoY to 11% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. CELSIUS is now the best-selling energy drink on Amazon. Additionally, the early international market development groundwork starting to formalize with CELSIUS extending its relationship with Suntory Beverage & Food and also the first major international market expansion under the PepsiCo umbrella (i.e. Canada). It's my opinion that international expansion presents significant opportunity for incremental growth over the next three to five years. With Celsius at basically full distribution now…the TDP growth will have to come from increased items carried per store. In this quarter, average SKUs per retailer increased 35% to 20. Going forward, Celsius will increase items per store through a combination of product strategies like flavor, format, pack size, and variant expansion. Additionally, CELISUS will continue scaling up the new Essentials lineup that has exceeded the company’s expectations. Additionally, they will seek more store placements like leveraging cold display activity in Celsius-branded coolers. While the U.S. energy drinks market has never been bigger than right now, competition within the category has never been greater (with C4 Energy, GHOST, and Alani Nu continuing to push market leaders). Then, you have categorical growth rates slowing and macroeconomic factors pressuring same-store sales of the largest convenience store chains. So, while I believe the energy drinks category has massive upside potential to continue growing…combining all those previously mentioned underlying drivers (plus a few more) mean that the near-term outlook is a little less rosy. CELSIUS still has ample sales and marketing levers to pull, and its core products continue to resonate with buyers…but that doesn’t mean CEO John Fieldly isn’t looking for additional growth opportunities (which lines up perfectly with my November 2023 prediction).
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According to Celsius Holdings CEO John Fieldly, the company is looking at expanding into “adjacent categories." I don’t know about you…but doesn’t that sound like something I predicted in November 2023? Celsius Holdings (NASDAQ: CELH) had quarterly revenue of $402 million, which was up 23% YoY. During the trailing twelve months, Celsius Holdings smashed through the billion-dollar mark…with the energy drink brand generating $1.49 billion in revenues over that period. According to Circana last 13-week data, Celsius was the number one brand driver of unit and dollar sales growth in the energy drink category. In addition, according to the trailing 4 weeks of Circana all tracked channel data for the period ending July 14, 2024, Celsius is now securely the third-largest energy drink brand in the category. Its market share grew about 1.4 percentage points YoY to 11% now. And I don’t want gloss over this accomplishment…because it’s the first time in over a decade that an energy drink not named Red Bull or Monster Energy has had a 10% share in the U.S. market. Celsius energy drinks saw massive growth in convenience stores, foodservice (e.g. fast food restaurants), mass retailers like Walmart, the club channel in retailers like Costco, and the Amazon marketplace. CELSIUS is now the best-selling energy drink on Amazon. Additionally, the early international market development groundwork starting to formalize with CELSIUS extending its relationship with Suntory Beverage & Food and also the first major international market expansion under the PepsiCo umbrella (i.e. Canada). It's my opinion that international expansion presents significant opportunity for incremental growth over the next three to five years. With Celsius at basically full distribution now…the TDP growth will have to come from increased items carried per store. In this quarter, average SKUs per retailer increased 35% to 20. Going forward, Celsius will increase items per store through a combination of product strategies like flavor, format, pack size, and variant expansion. Additionally, CELISUS will continue scaling up the new Essentials lineup that has exceeded the company’s expectations. Additionally, they will seek more store placements like leveraging cold display activity in Celsius-branded coolers. While the U.S. energy drinks market has never been bigger than right now, competition within the category has never been greater (with C4 Energy, GHOST, and Alani Nu continuing to push market leaders). Then, you have categorical growth rates slowing and macroeconomic factors pressuring same-store sales of the largest convenience store chains. So, while I believe the energy drinks category has massive upside potential to continue growing…combining all those previously mentioned underlying drivers (plus a few more) mean that the near-term outlook is a little less rosy. CELSIUS still has ample sales and marketing levers to pull, and its core products continue to resonate with buyers…but that doesn’t mean CEO John Fieldly isn’t looking for additional growth opportunities (which lines up perfectly with my November 2023 prediction).
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