Celsius bucks postulated drop in energy category, notching 95% sales growth

By Hank Schultz contact

- Last updated on GMT

Getty Images
Getty Images

Related tags: Energy, energy beverages, COVID-19

Energy drink manufacturer Celsius was able to quickly transition its marketing to online, streaming events which helped it to report a strong quarter, even as the face to face marketing it had relied on came to a hard stop.

The coronavirus crisis has caused a number of changes in how people interact and how companies do business.  In Celsius’ case, much of its marketing was devoted to supporting in person, experiential events where consumers could sample the company’s energy beverages in a typical use setting.

Would energy products follow pre workouts?

The dietary supplement industry has enjoyed strong sales in some categories during this pandemic time.  Anything relating to immunity, such as products containing vitamin C, zinc, echinacea or astragalus as well as probiotics and some fungi based products, has been flying off the shelves.  Some companies have reported significantly shifting their production to produce just a few of their many skus to keep up with demand with other products languish.

The word on the street has been that other categories, such as pre workout and weight management products, have suffered in this climate.  The thinking went that that would extend to energy products as well — who wants to be amped up while they sit on the couch and stare at the ceiling?

But that has not been Celsius’ experience.  According to CEO John Fieldy, the company was able to transition quickly to online events, such as a branded streaming fitness platform called Sweat with Celsius, that has maintained sales momentum. And the company’s strong balance sheet enabled it to build up extra inventory to tide it through any supply disruptions caused by the global pandemic.

Celsius sells a variety of energy beverages which are sold as dietary supplements.  Its base brand features extracts of green tea, guarana, ginger root as well as vitamins and minerals.  The company also has a ‘Heat’ line that adds l-citrulline and has a line based on BCAAs as well.

Strong quarter

Celsius reported $28.2 million in sales in the period ending on March 31, 2020.  That was $13.7 million more than the first quarter of fiscal 2019, which represented a rise of 95%.  And CFO Edwin Negron Carballo said that increase was attributable to more volume as opposed to higher prices.

Fieldy said the sales momentum has continued into the second quarter.  He said Celsius is now the No. 3 best selling energy beverage on Amazon, behind Monster and Red Bull.

“And for the 13 weeks ending April 11, 2020 sales in dollars in the energy drink category within Amazon versus the same period a year ago indicated Celsius sales growth of 118.2% and it's share increased 2% within the category to 11.4, which further demonstrates the momentum we are building in the category with Celsius,”​ he said. 

 Fieldy made his remarks during an earnings call with stock analysts.  A transcript of the call was posted on the site seekingalpha.com​. 

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