Betting Big on Celsius: Why I Invested & Q4 Earnings Breakdown

Celsius became impossible for me to ignore in the last few months as I started to see these energy drinks everywhere.

Here is a chart of Monster Beverage Corp. MNST 0.00%↑ is one of the best performing stocks in the past 20 years that you probably would’ve never guessed. If Celsius is anything like the Monster story, CELH 0.00%↑ could be where the arrow currently points in the Monster chart. Let’s break it down.

Anecdotally, every time I go to the gym there are multiple people drinking Celsius. A couple people in the military I spoke to have said these things are the rave amongst service members. It’s gaining popularity everywhere from college campuses, to healthcare locations and even the food service industry. More on why that’s important in a moment.

Celsius is capitalizing on 2 major trends:

1. Caffeine

2. Health

Modern society’s drug of choice is caffeine. This addiction seems to only be increasing as people search for a constant edge.

We are also becoming more health conscious. See the recent O O O Ozempic craze, which I’m sure benefited Celsius. Don’t take it from me, look at the data.

As you can see, over the past year, Celsius increased volume by 123% while many other beverages saw volumes decline. In the energy space their direct competitor Red Bull saw volume increase only .5%, while Coca Cola total beverage sales were -3.6% and Pepsi -8.8%.

Celsius is taking market share from not only the energy category but potentially other beverage categories as well. These drinks are caffeinated, think about that, Starbucks isn’t even on this chart but we know how big that market is.

Will people substitute $6 caffeinated milkshakes from SBUX 0.00%↑ for $2 Celsius?

Here are some of the key takeaways from my research and what the company just reported in the 4th quarter.

Celsius is ranked #3 in the U.S. for energy drinks. As you can see in the chart below, while their U.S. market share has since doubled to 10.5% in Q4, they still trail Red Bull and Monster by a lot.

On the flip side, while Monster and Red Bull have a customer base that is ~90% male, Celsius’ consumer demographics skew 50% male and 50% female. This presents a huge opportunity.

The energy drink space is extremely competitive and there are other players. It will all come down to if Celsius is able to continue growing quickly, or if it is merely a passing fad.

The health factor is something that sets them apart as the drinks have 10 calories, no sugar, are loaded with vitamins and are caffeine optional. They do have a first mover advantage and big enough brand recognition at this point to make imitation difficult. Why would someone go for an unknown new drink if they already know Celsius?

People are consuming Celsius in additional ways than what energy drinks have historically been used for. From exercise, to work, to going out, they’re even drinking them with meals.

We continued to drive growth of the category by bringing in new loyal consumers, as well as increasing consumption occasions. -John Fieldly, Chairman and CEO, Q4

Q4 was another great quarter with huge growth rates and 2023 saw 102% revenue growth compared to 2022.

2023 was a record year and there is definitely seasonality in this business as it performs better in the warmer months and tends to dip in Q4.

Below is an ugly formatted slide from the presentation but look at how much fun these people are having! Doesn’t it make you want to drink Celsius?

The results are far from ugly, if the text is too small I highlighted some key points below.

On Amazon, Celsius remained the highest selling energy drink with 19.7% share to Monster’s 19.6% and Red Bull’s 12.3%, as per the 14 week period ended 12-30-23.

Compared to the prior quarter, Q3, where Celsius was the best selling energy drink on Amazon with 21.4% share to Monster’s 18.6% and Red Bull’s 13%.

Celsius sales grew 142.3% in the past 26 weeks year over year while the energy category grew 13.4%.

They are outpacing category growth and stealing market share from other players. That is what you want to see!

It is the #3 energy drink in the U.S. with 10.5% market share, up from 4.9% share last year.

There is a lot of opportunity here as the energy category continues to grow and Celsius continues to grow even faster. The company is poised for international growth. In the food service industry, they are presented with a unique opportunity to open up new energy drink use cases and frequency of consumption. Their Pepsi partnership will continue to add value and while 90% of traditional energy drink sales skewed male, Celsius has unlocked an entire new market: females.

I started a position in the company earlier this week and notified community members in real time. As of this writing those shares are up 20%.