MarketsMar 11, 2024
America’s Energy Drink Obsession is Supercharging Celsius, the Country’s Third-Largest Beverage Company
Market Share Shift
Noah Weidner
Discover
Dunkin’ in the morning, energy drink in the afternoon. That’s the formula many Americans use to power themselves through the day. But for some, it’s straight energy drinks through the day — a love affair that churns out $21.1B annually in the US. However, health concerns are leading people to seek out healthier options, which has given birth to a rising king of energy drinks.
Energy gauge: After years of clawing market share from beverage giants like Coca-Cola and PepsiCo, Celsius Holdings has become America’s third-largest beverage company by sales, fueled by demand for its energy drinks. In a highly competitive market, the brand positioned itself as a healthier energy drink in contrast to its sugary competitors.
Celsius’ growth still pales in comparison to Monster Energy’s 73,850% run since 1985 — making Monster one of the best-performing stocks of all time. Celsius is also caught in the middle of a long-time rivalry between Coca-Cola, who has a minority stake in Monster, and PepsiCo — who decided to back Celsius.
Forward-looking: The price tag is high for investors eyeing Celsius, with a steep 80x price-to-earnings ratio — significantly higher than the S&P 500’s 23.2x. Nevertheless, analysts foresee another year of banner growth for Celsius. Stifel analysts upgraded the stock to $95 (11% upside) yesterday, citing the company’s fast-growing market share and expectations for Celsius to capture 14% of the beverage market by June.
