Celsius hits $1bn brand status with PepsiCo's help

By Ryan Daily

- Last updated on GMT

Image Credit: Celsius
Image Credit: Celsius

Related tags Energy drink Pepsico

Better-for-you energy drink brand Celsius leverages its PepsiCo partnership to reach $1bn in sales while exploring how to bring consumers into the category with unique flavors, CEO John Fieldly shared during the Goldman Sachs Global Staples Forum this week.

"The brand is resonating with a broader consumer than ever before," ​Fieldly said. "We've always talked about being a billion-dollar brand, and the latest scan data has Celsius as of the last 52 weeks, as of April 26, we've reached that billion-dollar brand status at retail, so just a really exciting time in [the] company.​"

Getting to $1bn: “New age energy,” PepsiCo partnership

As the energy drink market continues to grow in dollars and volume​, Celsius is positioned as a “new age energy​” brand that taps into a consumer base outside the typical energy drink space, Fieldly said. “They consume Celsius ... but they don't consider themselves an energy drink consumer,​” he explained.

About 24% of our consumers are incremental to the category, new to the category, per Numerator, and then, another 44% is incremental to the category because it's what they term user intensification,” said Toby David, executive VP for Celsius. “In totality, you are looking at 60% of Celsius sales are incremental, so retailers love that. It's not just brand shifting.​"

Last fall, Celsius moved its “distribution from mainly the independent Anheuser Busch distributors to Pepsi on a national basis in North America​” through a partnership, Fieldly said. With the partnership, PepsiCo invested $550m in Celsius​, as part of a multi-pronged approach to invest in functional and less sugar products.

In addition to boosting sales, the PepsiCo partnership opens new opportunities for the brand in the foodservice sector and provides an opportunity for it to become a “total beverage​” player, Fieldly said.

I think today and the last 12 months, what we’ve seen is Celsius [has an] opportunity to be a major player in total beverage, and that's really what we're seeing now with some of the expanded distribution with Pepsi, where 10% of our Pepsi sales right now are in this foodservice, in this untracked channel, which is quite interesting.​”

Preparing for the 100 days of summer with promotions, flavors

Retailers also added more Celicisu to their shelves during their spring shelf resets, David noted.  

As of March 26, what we cited during the earnings call, we were up to 13.6 SKUs per location in the MULO+C data, which was all grocery and convenience. I believe that was up from about eight SKUs roughly from the year prior. It really allowed that growth to come from convenience ... that was our last channel that we entered.​”

Celsius also is preparing for the summer beverage season through in-store promotions, which has the potential of more on-shelf placement, Fieldly said.  

We are hearing some traffic slowing down, so they want more promotions to help bring consumers ... into their stores, so promotions are going to be key, especially this summer.​”

Additionally, Celsius will introduce new flavors this summer and next year, and change the format of its beverages, Fieldly said.

Last year, Celsius released a Green Apply Cherry flavor in partnership with 7-Eleven, which became “one of its fastest growing SKUs,​” Fieldly said. Previously, Celsius released a lemon-lime flavor at Walmart, “which is one of the largest energy-drink retailers in sales in the category​,” he added.

You're going to see some really great innovative flavors coming out of our pipeline and our fruit-forward line. And then also we have our 16-ounce opportunity that we have with our Celsius Heat line. We're going to further innovate there, and we think there’s opportunity there. And then, we're also looking at ... where the category is going, what opportunities are adjacent to the category." 

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