Functional beverage behemoth Monster Beverage Corp may raise prices to offset higher aluminum costs as geopolitical tensions tighten supply and tariffs drive up expenses, but executives are optimistic about the category’s resilience as consumer demand holds steady after modest increases last fall.
“We continue to monitor the opportunity to take price. Modest inflationary pricing is working. The category is healthy and we are gaining share in the category and we are optimizing the growth in consumer demand for our products,” Guy Carling, CEO of EMEA and OSP at Monster Beverage Corp., said yesterday during the company’s first quarter earnings call.
Americas CEO Rob Gehring added the company is “very pleased with the pricing actions we took in late 2025. We believe that play is working.”
While the price increases and pull-back on promotions instituted last November were positioned as revenue growth drivers, future increases could help offset rising aluminum and freight costs in the first half of the calendar year.
“During the first quarter of 2026, the impact of tariffs and the increase in the price of aluminum on our operating results was modest” at just under 1% of margin, “but it did have an impact on gross margin,” Vice Chairman and CEO Hilton Schlosberg said.
“We expect a continued modest sequential increase in our costs through at least the end of 2026 as compared to the 2026 first quarter,” he added.
Is an aluminum supply shortage crisis coming?
Schlosberg attributed higher aluminum costs in part to the 50% tariff the Trump administration placed on the material last year, and a more recent surge in the Midwest premium for aluminum that drove up the cost of the company’s cans.
The Midwest Premium – or the price of aluminum supplied to the Midwest US – has climbed steadily, and at times sharply, since Trump confirmed tariffs in January 2025. As of April 2026, the assessment was up 186.5% from a year ago, according to S&P Global Energy.
This includes a 17.9% increase since Feb. 28 when the US and Israel launched major strikes against Iran as part of Operation Epic Fury. A month later, Iranian strikes in the Persian Gulf shut down key aluminum product facilities. Disruptions related to the Strait of Hormuz further complicates import logistics and are contributing to tighter supplies, according to S&P Global.
Stakeholders predict aluminum is nearing a supply crisis and an impending shortage may further drive up prices across the board this summer.
In response, Monster continues to “implement hedging strategies across the business where possible,” Schlosberg said.
But, it may also need to raise prices to offset higher costs, hinted other executives.
Schlosberg remained confident that higher prices would not deter consumers who see the company’s energy drinks as a “value proposition” compared to more expensive options, such as coffee, the price of which also has steadily climbed due to tariffs and geopolitical tensions.
“It is an affordable luxury,” he said.
Higher freight costs also squeeze business
In addition to a negative impact from tariffs, Monster also suffered higher freight costs in the quarter primarily due to “out-of-orbit production” to meet increased demand, Schlosberg said.
“We always have to satisfy demand. That is our No. 1 priority. We don’t want empty shelves. We don’t want consumers disappointed. It makes sense for us, as the business grows and as it grows beyond what we had forecast, to ship outside our regular orbits,” he explained.
Looking forward, he reiterated that he believes in the company’s growth strategy and is committed to innovating, developing and differentiating brands that can command the necessary price point.
