Monster Beverage sales surged double-digits in the third quarter as the energy drink category continues to shake off its bad reputation, innovative product launches expand the appeal of the category to new users – including more women – and price-sensitive shoppers seek alternatives to increasingly expensive coffee house beverages.
“The global energy drink category remains healthy with robust growth,” CEO Hilton Schlosberg told investors Thursday during the company’s third quarter earnings call in which he touted Monster’s 16.8% year-over-year increase in revenue to $2.2 billion.
The strong net sales gains bolstered gross profit margin of 55.7% – up from 53.2% in the same quarter last year. Operating income also skyrocketed 40.7% year-over-year to $675.4 million and earnings per share increased 41.1% year-over-year to 53 cents per share from 38 cents per share.
Schlosberg attributed the gains to increased household penetration of energy drinks “driven by functionality and lifestyle positioning, diverse offerings that appeal to an increasingly broad and loyal consumer base and affordable value offerings in addition to premium offerings.”
He added Monster’s selection of energy drinks “are well positioned to participate in the growing global energy drink category, appealing to a broad range of consumers across geographies, price points and need states.”
Energy drinks viewed as an ‘affordable luxury’
Even though Monster Beverage raised prices and pulled back on promotions in the US beginning Nov. 1, the company expects minimal impact on volume in part because consumers increasingly view energy drinks as an “affordable luxury” – especially compared to coffee shop beverages.
“Coffee house coffees are becoming really expensive, and energy drinks are seen as a more affordable alternative,” Schlosberg said.
The incremental price increases instituted by Monster Beverage in the US protect this favorable positioning compared to coffee shops, but also help offset higher aluminum costs and the impact from tariffs, which Schlosberg characterized as “modest.”
He explained that Monster has not suffered as much as some companies under the Trump administration’s trade policy because most of its flavors and concentrates are made in the US and Ireland, currently.
Still, he acknowledged, “the tariff landscape continues to be complicated and dynamic.”
Where the company is feeling the pinch is on packaging.
“Tariffs significantly impacted the Midwest premium for aluminum, which increased the cost of our aluminum cans. We also import some raw materials into the United States, export certain raw materials for local markets, and export limited quantities of finished products,” he said.
Nonetheless, he added, “we do not believe, based on our business model, that the current tariffs will have a material impact on the company’s operating results,” as Monster continues to “implement mitigation strategies across the business where possible.”
New launches expand energy drink appeal to long overlooked consumer segments
Beyond affordability, Monster Beverage’s surging sales are attributed in part to its “robust innovation pipeline” that not only generates excitement among current users but is attracting new consumers to the category, Schlosberg said.
“We are in the process of launching a number of SKUs at retail to take us through 2025. These are Monster Energy Ultra Wild Passion, Juice Monster Bad Apple, Monster Electric Blue, Monster Orange Dreamsicle, and in certain markets Monster Energy Lando Norris Zero Sugar,” he said.
The company also has a strong lineup planned for 2026, including the launch of the “female-focused” bran FLRT late in the first quarter, which will include four flavors, zero sugar and “ingredients we believe will appeal to our target audience,” Schlosberg said.
The company also plans to launch several limited-time-offerings in the spring and summer for the United States’ 250th anniversary, including Monster Energy Ultra Red, White and Blue Raz and Juice Monster Strawberry Lemonade.
“Our innovation is supported by upgraded analytics for SKU flow, display optimization and cooler resets. Additionally, we have refined our merchandising strategy to prioritize high-impact placements across the convenience, mass and grocery channels,” Schlosberg said.
‘Energy drinks are becoming more acceptable’
The energy drink category gains enjoyed not only by Monster but the broader set also reflect evolving consumer perceptions of the category, Schlosberg said.
“Energy drinks are becoming more acceptable in society,” he explained. “At one time, they were kind of looked at” with fear as people worried about the caffeine content.
“Now, understanding the levels of caffeine, which are not exorbitant, and less than half of an equivalent size of a coffee house coffee, energy drinks are becoming more acceptable,” he said.