Celsius (CELH) UBS Global Consumer and Retail Conference summary

Category and market trends

• Energy drinks are driving significant growth in the beverage sector, with 54% of liquid refreshment beverage growth attributed to energy and 85% of energy growth being sugar-free.

• The category is evolving from impulse purchases to daily lifestyle consumption, broadening its consumer base.

• Convenience channels, especially single-serve formats, are strong growth drivers, with no significant negative impact from rising gas prices.

• Energy drinks are sourcing consumers from adjacent categories like coffee, hydration, and premium water, with retailers reallocating shelf space from beer to energy.

• Female and sugar-free segments are the largest growth drivers, with tailored products for different consumer profiles.

Portfolio strategy and brand performance

• The acquisition of Alani Nu has diversified the portfolio, with both Alani and Celsius showing strong, differentiated growth and minimal consumer overlap.

• Alani Nu has achieved triple-digit growth, especially after integration into the Pepsi system, and is expanding distribution and awareness.

• SKU rationalization is underway for Celsius, focusing on high-velocity products and expanding their distribution, while innovation will be layered throughout the year.

• ESSENTIALS, a 16-ounce format, is underperforming but remains a focus for improvement through differentiated marketing.

• Rockstar is being stabilized with a focus on core SKUs and a male-heavy demographic, aiming for future growth.

Distribution and partnership developments

• Category captainship with Pepsi allows for greater control over planograms, marketing, and distribution, strengthening the partnership and driving growth.

• Integration with Pepsi’s DSD system enhances reach and service quality, with improved alignment and inventory management.

• Planogram resets and expanded shelf space are expected to further boost Alani Nu’s growth, especially in underserved regions.