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On Wednesday, 10 September 2025, Celsius Holdings Inc. (NASDAQ:CELH) outlined its strategic initiatives at the Piper Sandler 4th Annual Growth Frontiers Conference. The company highlighted its expanded partnership with Pepsi, focusing on becoming the energy lead within Pepsi’s portfolio. Despite facing potential margin pressures, Celsius is optimistic about its growth prospects, particularly through innovation and international expansion.
Key Takeaways
- Celsius Holdings Inc. has secured a pivotal role as the energy lead in Pepsi’s portfolio, enhancing control over planograms and SKU prioritization.
- The distribution of Alani Nu will expand through Pepsi’s network, with a significant focus on convenience stores and food service.
- Celsius aims to stabilize and potentially revitalize the Rockstar brand, leveraging its expertise in SKU rationalization.
- The company is targeting a 20% plus market share, aiming to compete with industry leaders like Red Bull and Monster.
- Potential margin pressures are anticipated due to aluminum tariffs and the PepsiCo transaction, with gross margins expected to be in the low 50% range.
Strategic Partnership with Pepsi
- Energy Portfolio Leadership: Celsius’s new "captaincy" role within Pepsi allows for enhanced control over the energy category, providing incentive-based prioritization and planogram management.
- Alani Nu Distribution: The integration into Pepsi’s network will target convenience stores and food service, aiming for a 65% ACV in convenience stores.
- Rockstar Brand Strategy: Celsius plans to stabilize and revitalize Rockstar by optimizing SKU selection and leveraging its market knowledge.
Brand Strategy and Distribution
- High-Velocity SKUs: Celsius prioritizes high-performing SKUs across its portfolio, tailoring the mix based on regional strengths.
- Market Share Goals: The company is striving for a 20% plus market share, positioning itself closer to Monster and Red Bull.
- Promotional Consistency: A portfolio-driven approach ensures year-round promotional activity without internal competition.
Innovation and Category Trends
- Limited Time Offers (LTOs): Celsius plans to introduce LTOs in Q4, exploring new categories for all brands.
- Energy Category Rebound: The energy category is experiencing a rebound, driven by attractive pricing and the popularity of cold beverages.
Financial Performance and Outlook
- Margin Pressures: Anticipated pressures from aluminum tariffs and the PepsiCo transaction may impact margins, with gross margins expected to be in the low 50% range.
- Long-Term Margin Goals: Celsius aims for gross margins in the mid-50s and an EBITDA margin of approximately 30%.
International Expansion
- Conservative Approach: Celsius is methodically expanding internationally, focusing on building brand equity through partnerships like Suntory.
- Market Performance: Strong market share performance is noted in Australia and Canada, with international revenue contributions expected to reach similar levels as Monster.
Celsius Holdings Inc. remains committed to its strategic initiatives, seeking to enhance its market position and drive growth. For a detailed review, please refer to the full transcript below.
Full transcript - Piper Sandler 4th Annual Growth Frontiers Conference:
Unidentified speaker, Analyst: All right. Thanks, everybody. Welcome back. It’s our pleasure today to have Celsius with us. We’ve got Toby David, Chief of Staff. Could you maybe just start with you’ve had some news recently with the expanded deal with Pepsi? Maybe just explain a little bit about how it impacts your portfolio and where you’re most excited about it.
Toby David, Chief of Staff, Celsius: Sure. Yeah. We announced about a week and a half, two weeks ago, a transaction with Pepsi. It was a multifaceted deal for roughly $585 million. Really, when I talk about it, it’s in four different elements that were key to it. The first element was what we call the captaincy. It gives us the ability to be the energy lead within the Pepsi Energy portfolio. That was really critical for us to make sure that we had the full mental focus of their team. For over the last, call it three years now, since Celsius, the brand, moved into the Pepsi system, it’s been a great relationship. We’ve seen massive gains since October of 2022. At the same time, we are an allied brand, and Rockstar was an owned brand within their portfolio. There was always wanting to get that full share of mind within Pepsi.
This captaincy deal is really an incentive deal. We built a lot of parameters within that element where we get a lot of prioritization within their portfolio, a ton of space within the Pepsi-controlled planograms. We lead now that space that they’ve allocated towards us, and we get to make the decisions on how much Celsius, how much Alani, and how much Rockstar, and which SKUs go there. John, our CEO, often likes to say, we want to put the fast cars on the track. The SKUs that drive the best velocity and the best performance, we’re going to be able to do that in all of the planograms that Pepsi controls around the country. That’s critical for us. That was the first element of the deal that was really the most important. 1A and 1B, 1B would be getting Alani Nu into the Pepsi distribution system.
The AB network, that fragmented network of independent beer distributors around the country, they helped build Celsius. They helped build Alani. Really a fabulous network. Can’t speak highly enough about the folks in that network. That being said, Pepsi is a tier one distributor to them and Coke, right? Massive opportunities. Really excited about the distribution opportunities for Alani Nu. If you look at them today, I think the biggest opportunity is probably within convenience, not only within track channels, but also within independent convenience stores. They’re situated around Alani Nu, situated around a 65% ACV right now in convenience. If you look at them versus Celsius right before we entered the Pepsi network, very similar ACV within convenience, very similar number of SKUs per convenience store. I think that really is a massive opportunity.
A lot of people have asked over the years, really for Celsius first, but now with Alani Nu, can Alani perform within convenience because of the female demo that consumes Alani and I guess the perception that convenience is predominantly male-driven. If you look at the data right now, their scanner within convenience is really strong from a velocity standpoint. Hopefully that can maintain as they get broader distribution within the Pepsi network. Really excited about that opportunity. Food service as well is going to be a big opportunity for them. That was 1A, 1B of the deal. I think the other two elements that were critical was just further alignment and partnership with Pepsi. We recently brought on Eric Hansen as our President and COO. I think that further strengthened the partnership. Through this transaction, they’re getting another board seat.
I just think it further aligns us with the Pepsi team. The fourth element would be the Rockstar piece of the transaction. Rockstar, listen, they’ve had their declines over the years. We think there’s some opportunity there. We have a lot of folks at Celsius that were some of the founding senior-level people at Rockstar years ago. We’d like to think we have a pretty good intimate knowledge of that brand and maybe what their strengths are, what their weaknesses are, and where the opportunities are. Step one for Rockstar is to get them back to where they’re not losing share, flatten things out, and then we’ll see where we go with them. That was really the four elements of the deal that we’re excited about.
Unidentified speaker, Analyst: You touched on the strong performance Alani Nu already has in C-Store. You touched on the measured channels and the unmeasured channels as big C-Store opportunities. Maybe two parts. One is, is C-Store really the focus for where you see the distribution upside? Then second, can you maybe go through each of the three brands that you now have and give us a sense of how each one might change and when what comes next?
Toby David, Chief of Staff, Celsius: Yeah, sure. I think if you look at the total landscape of retail, Alani Nu is a little bit further along than we were at Celsius when we went into the Pepsi system, primarily within that MULO, so like grocery or big box, like a Walmart, Target. They’re a little bit further along as far as in their distribution than we were. Convenience, as I mentioned earlier, is really where their last area that they really haven’t expanded into. I do think that convenience is the biggest opportunity for Alani Nu when they go, and they’re both track and independent. We’ve talked in the past that Pepsi has, they service over 100,000 independent convenience stores around the country where they maintain their own planograms within those stores. They call it their Metals program.
That is a big opportunity now because we control the energy portion as a lead within those planograms. That’s going to be a really big opportunity for Alani is both the track channel convenience store as well as independent. Food service, Celsius is seeing quite a bit of success within food service. It’s been roughly 11%, 12% of our revenue has gone through with Pepsi, has been food service. That’s really untapped with Alani Nu. College and university falls within food and service. If you think about who the demo is for Alani, a lot of college-aged females think that’s a big opportunity as well. As far as the total portfolio, I can’t remember what was the, you were asking about Rockstar, Alani Nu.
Unidentified speaker, Analyst: Yeah, if you look at each brand separately, you know, what might change? Like, you know, how do we think about, you know, now versus what’s ahead for you?
Toby David, Chief of Staff, Celsius: Yeah, I think when you look at the three brands and the ability to control how many SKUs of each go into all these planograms around the country that Pepsi owns, we want to put the fast cars on the track, as I mentioned earlier. We are getting a lot more space. We haven’t identified what that is through this captaincy, and it just depends on the market. There are certain regions where Celsius is stronger than Alani Nu and vice versa. I think on the coast, you’ll find that Celsius really is stronger, and then down in central, Alani Nu is then very strong, although I think they have a lot of opportunity with this new distribution on the coast as well. You look at the Pacific Northwest, and Rockstar still has a very strong presence up there.
If you go into the plan, as we’re setting the planograms up in that region, you’re going to see a little bit more Rockstar than you would in South Florida, for example. I think at the end of the day for us, when it comes to the Pepsi planograms, we control that. Now, when we’re going into the retail buying season over the next couple of months, we control those call points. If you’re calling on a Walmart or a 7-Eleven, we’re going to be able to sell in a total portfolio that you’re looking at a 20% plus market share, which I think a couple of years ago, people would have kind of looked at you cross-eyed if you saw that, you know, Celsius Holdings Inc.’s portfolio would be at 20% share. Nobody’s even gotten close to that number before other than Red Bull and Monster.
We’re closer to, a lot closer to Monster now than the next closest brand is to us, which would be like a 3% share brand. You see Monster sitting at about a 28% in terms of dollar share. We really like where we’re situated today. We have a great position to go into retail. We have different brands, especially with Rockstar coming into the portfolio. Yes, a lot of, you know, they’re a full sugar brand and they’re sugar-free as well. At the end of the day, that’s still half of the category. That now gives us an opportunity to compete against Red Bull and Monster and their full sugar brands. It also gives us an opportunity to promotionally toggle and make sure that we’re on promotion throughout the year with one of the brands at all times.
You see that Monster does a great job of that with all their different brands and make sure that we’re in a very heavily promoted category to begin with, and also to make sure that we’re not promoting against each other as well now that we have this portfolio approach.
Unidentified speaker, Analyst: You touched on the quantity of distribution increasing. You also touched on some of the assortment improving. Red Bull and Monster are quite a bit different, where their sort of core two, I think, SKUs are maybe 60%, even 65%, 70% of their sales. Yours are quite a bit more fragmented. How much tougher has it been to get the right assortment, and how much improvement do you think you can now get both with a little bit more space to play with and maybe, you know, it seems like there might be a little more thoughtful approach. How excited are you about getting that reorganized?
Toby David, Chief of Staff, Celsius: Yeah, no, that’s a good question. You look at the end of their super SKUs or power SKUs, however you want to phrase it. I think when you’re a legacy brand like that, they’ve been able, that was really the foundation of the category. I think they were able to do that. You look at every other brand that’s come in in the last 10 years, and you really need to have an assortment of flavors. I think that’s what consumers are looking for these days. I think there certainly is an opportunity for us to SKU rationalize. It’s going to be the third time I’ve used this phrase, so I need to slow it down, but, you know, put the fast cars on the track, right?
I think as we go into selling season with these retailers, making sure that we have our more prolific, higher velocity SKUs getting greater ACV. Eric Hansen, our new President, he’s kind of referenced this before publicly, is, you know, if you’ve got our orange flavor, for example, which is a top SKU, you know, it might be at 80% ACV. It probably should be at 95% plus ACV. It should be really in every store that a Celsius is being sold. Then you have a lot of SKUs that are really good performers sitting at, call it, 55% ACV. Let’s get those up to 80% plus. Just by rationalizing and making sure you have your higher performers on the shelf, you inherently are going to get greater velocity. I think that’s really an exercise we’re going through right now for core brand Celsius.
Alani Nu doesn’t have as many SKUs, not nearly as many SKUs as Celsius. They’re going to have their foundation SKUs, that’s a fewer amount, but then they’re going to rotate their LTOs throughout the year and then see a lot of success with that program as well. As we head into 2026, really excited about the commercialization approach that we’re taking heading into the year. I think there’s a lot of opportunity to be able to capitalize on that.
Unidentified speaker, Analyst: As far as timing goes, if you’ve got upside and assortment upside to the distribution levels and kind of rearranging the mix within it, are there shelf resets you need to wait for at certain retailers, or if this is primarily C-Store focused, is there more of your own control in terms of when you execute that? How should we think about how it unfolds?
Toby David, Chief of Staff, Celsius: Yeah, I think within the independent convenience stores, there might be some opportunities in December potentially. Alani Nu is rolling into the Pepsi distribution network 12/1. We’ll probably move over roughly about 80% of their distribution from the previous network into Pepsi on 12/1. Independents may be, but you really are looking at similar timing as you typically see where starting in January and through April, May, you go through the resets, the planogram resets at all these major retailers. I think you’ll see the same cadence that you historically see when these resets go out. I think it’s going to take a little bit of time to get Alani Nu fully executed within the Pepsi system as well on the independent side. I think you’ll start to see it maybe flow through a little bit in December, but more so Q1, Q2 when the full planogram resets take hold.
Something I haven’t even mentioned, when I talked about the opportunities for Alani Nu, I mentioned the convenience stores, also mentioned food service. One of the strengths of Pepsi is their IOD and NOD, so inventory on display and their number of cases on display. They’re able to build out these large displays within grocery and within the big box Walmarts of the world. That’s going to be a great opportunity for Alani Nu as well. I think a lot of people have seen Celsius historically have these big displays set up. That’s something that I think we’ll hopefully see with Alani Nu as well. That’ll probably start rolling out in Q1, Q2.
Unidentified speaker, Analyst: Back to Rockstar, you’ve given a pretty good idea of how to manage it a little more thoughtfully, get it to stabilize. Let’s walk before we run, of course, but looking maybe a little further ahead, what is your sense of, you know, it sounds like it plays a role that you weren’t looking for this brand as a growth driver, but could it get back to growth? Would it have any innovation focus? How do you think about what’s next? Is it maybe a little bit TBD or what’s in store for Rockstar?
Toby David, Chief of Staff, Celsius: Yeah, I think we have more of a conservative approach right now, undersell and overdeliver, right? You mentioned the word stabilize. That’s the key, right? We need to stabilize this brand first and then see where we can go after that. Definitely think there’s opportunity. They have a lot of SKUs right now. We need to make sure that we probably consolidate those number of SKUs and their top performers and really focus on those and the DNA of the brand and what got them to be a 10-plus-year brand at one point. That’s a focus right now. We had mentioned this $250 million kind of run rate as far as revenue for the Rockstar portfolio. When Jarrod, our CFO, mentioned that, I think that was a post-rationalization number.
We’re going to bring in their number of SKUs, focus on the ones that are really the ones that are most effective. We’ll see where we go. I don’t want to make any promises today, but I mean, listen, I think they’ve got their legacy brand. I think there’s some opportunities there, but we need to stabilize it first and then we’ll see where we go.
Unidentified speaker, Analyst: As you look at the thinking on innovation just broadly, obviously there’s a lot of opportunity just with the portfolio you have and driving the distribution upside. Where does innovation sit? You know, a year and a half or so ago, you came out with ESSENTIALS and a whole new package size and extension. Anything like that in the works or what’s the role innovation plays looking ahead?
Toby David, Chief of Staff, Celsius: Yeah, innovation’s really important. That falls under Eric Hansen, our new President, and our full commercialization approach. Now we’re going to be innovating for three brands, right? With Celsius, you know, that’s the one that’s been more intimate for me and more involved with. We look at a lot of different opportunities there. I mean, I’m not going to speak about anything specific. There will be LTOs. We’ve talked about a limited-time offering that’s going to be coming out in Q4 for Celsius. You’ve seen a lot of other brands, including Alani Nu, and success with those. That’s going to be our first foray into the LTOs. We do look at other opportunities, whether it’s within energy or maybe in some other categories that we evaluate. We have our CELSIUS HYDRATION powder sticks right now that we just kicked off this year as well.
Again, I’m not going to name anything specific, but we do have a pretty deep amount of things we’re looking at. Alani Nu, you know, they’ve got some interesting things as well. Even within their current assortment, they’ve got their protein shakes, which I think all of us are seeing, you know, protein is having another moment. I think it’s going to continue to hold. They have their protein shakes. We didn’t purchase or acquire Alani Nu for anything other than their energy. If we’re able to capitalize on their protein shakes or some other areas like that, then I think that could be really exciting. As far as innovation, yeah, we’ve got a pretty deep, robust number of things we’re looking at right now. We’ll see what comes out in 2026.
Unidentified speaker, Analyst: Looking at the U.S. total category, it had a little bit of a slump a year ago. No one seems to pinpoint exactly why. That even was mentioned on a competitor’s call by them. They admitted that themselves. Now we’re seeing some improvement, obviously a little bit of help from easy comps. Any sense of what’s driving the rebound? Is it just a return to form? How do you think about maybe the category and the last couple of years maybe combined in terms of normalized trajectory and what’s driving it?
Toby David, Chief of Staff, Celsius: Yeah, I mean, the category is really performing exceptional right now. Most brands within the category are growing at double digits right now, Monster and Red Bull included. Obviously, there’s some easier comps last year. I think some of the limited-time offerings strategies both Monster and Red Bull are implementing are working well for them. Alani Nu is obviously helping to drive the category quite a bit as well. I think you’re seeing people move a little bit out of coffee. I think you’re seeing some of that, the price points for, if you go to some of your favorite coffee shops around the country, it might be $6 or $7 for a coffee. You have an opportunity to grab a CELSIUS for $3. It’s a very attractive thing.
I think it’s also interesting that the Starbucks of the world have conditioned their consumers to drink cold coffees and teas from their establishments, which we view very favorably and think that’s an opportunity to get people to transition out of maybe a cold coffee into a fruit-forward orange CELSIUS in the morning. I think you’re seeing some of that as well. I think you’re just seeing the category rebound. Last year it was really an anomaly. I agree, a lot of people have been trying to pinpoint or diagnose, but I think every category was down last year. People were just surprised with energy because they’ve never seen it before. I think everybody was afflicted with it. You’ve seen the category really bounce back. That’s good for everybody.
Unidentified speaker, Analyst: No, that makes sense. That’s a great color. Just touching on margins as well, you’ve called out some things like tariff pressure hitting in the second half. Your second quarter margins were extremely strong. Maybe give a sense both near term if there’s any watch outs and longer term, how to think about what maybe the headroom might be. Obviously, you can see somebody like a Monster as a benchmark, but there’s some kind of puts and takes differences there. Maybe how should we think about any potential changes to incentive costs or distribution costs with the updated Pepsi agreement?
Toby David, Chief of Staff, Celsius: Yeah, after Q2, we mentioned that we had really strong margins that quarter, that there would be some pressures due to aluminum tariffs that we were not impacted by in Q2 because we operate FIFO, first in, first out. A lot of the products we were pushing out were not affected by the tariffs or aluminum. We called out maybe a, call it a low 50s type of number to maybe think about like a 51% kind of number just as a starting point for the back half of the year. I think Q3, you’ll see that. Q4 might have a little bit of pressure just because you’ll be fully ramping, pushing through those affected cans. There’s going to be some noise, especially in Q4, really in Q3 and Q4 due to the transaction with PepsiCo taking on Rockstar. There’ll be a little bit of noise.
I think people understand that. As far as margins, we’ve kind of talked about that, call it low 50s number. We haven’t really talked about 2026 yet. We’ll see what unfolds over the next quarter or so. What we’ve historically said is in the PepsiCo agreement, there are some incentives around performance with them that they get a little bit of enhanced margin there. What we’ve called out is, listen, we have not changed what our expectations are for the long-term margin profile of Celsius. We’ve long said we look at Monster Beverage Corporation as a benchmark. When we first started talking about that, Monster was in the upper 50s from a gross margin standpoint. There are some puts and takes there. They do not include outbound freight in their gross margin. We do. If you were to make it apples to apples, it’d be us in the mid 50s.
That’s where we still aspire to get to, and this agreement does not change that. From an EBITDA standpoint, we’ve kind of talked about roughly a 30% that we’d like to aspire to get to as well. We’ve gotten closer to that over the years. We don’t put any timeline on when we think we’re going to achieve it, but we certainly think we’re closer now than we were a couple of years ago.
Unidentified speaker, Analyst: Just a quick maybe walk around the world. You’ve got several new markets now. Canada, kind of the further, you know, kind of almost, you know, close to two years now. Benelux, more recently, France, Australia, New Zealand, Ireland, UK in between. I think you’ve been clear that we should be patient there. I think you want to take your time building the brand properly. I think some of that includes using the fitness channel the way you’ve started in the U.S. Any update on how that’s progressing? Is that the right way to think about it? What are any highlights you’ve seen so far from your time in those markets?
Toby David, Chief of Staff, Celsius: Yeah, I think you always want to be careful how you characterize things. You never want to say you’re happy with, you know, we always want to strive for like excellent performance. There are some of those markets like Australia, which jumped out to a great market share there. Canada jumped out to a great market share there as well. I think sometimes it’s about your distribution capabilities along with maybe partnering with the right retailer like we did with 7-Eleven in Australia. That really helped us. Suntory, who’s our distribution partner, has a really good track record with energy in Australia. They have Vee, which is the market leader there as well. I think that we’ve probably met our expectations in most or all of the markets up to this point. We do have more of a conservative approach internationally. Listen, we’re judged every quarter by our bottom line.
We’re not going to just spend tens of millions of dollars and hope that we can get the right velocity. We’re going to build this thing out methodically. We feel like we have the right partner right now in those markets with Suntory. Suntory does have strong distribution within fitness. While fitness isn’t going to drive the revenue for you, it drives that brand equity with this health and wellness beverage. That’s been critical for us as well. I think up to this point, we’ve been called satisfied with where we’re at. Long term, you look at Monster, 40% of their, roughly 40% of their revenue is international. For us, it’s, especially with Alani Nu now coming into our system. I mean, it was 5% previous. It’s going to be even less now. Alani Nu is another one. I think there’s going to be some opportunity with them internationally.
Again, we’re going to slow walk it. We need to make sure we integrate them fully in the U.S. first. Down the road, this is more of a three to five-year play internationally. You have the same health and wellness trends globally that are percolating. That’s one of the reasons why you look at Scandinavia. That’s a really health and wellness region in the world. Celsius has great share in Sweden, does very well in Finland. We’d like to think that there are those opportunities that are spilling over into other markets as well. It’s just going to take a little bit of time.
Unidentified speaker, Analyst: No, that’s great. That makes sense. Maybe just in the last few seconds, any closing thoughts on what investors might be missing or just how to think about anything else we should have touched on?
Toby David, Chief of Staff, Celsius: Oh, listen, I think that, you know, it’s a little bit of a turnaround story with Celsius in the last year or so. Obviously, you know, we had some high peaks, you know, from, call it, 2020 up until midway through last year. We ran into some difficulties last year, and you’ve seen the brand, the brand Celsius really kind of turned things around, stabilized the business first, and then get back to growth. We want to see this brand, brand Celsius exceed category growth. We feel like, listen, we’ve made a lot of headway there. We think there’s a ton of opportunity, especially with the plans we’ve made for 2026. I feel good about the brand Celsius and where we’ve come from over the last 12 months. Alani Nu, I mean, they’re crushing it right now. They’re, you know, triple digit growth.
Really excited about their future, getting them into the Pepsi system. Then Rockstar is, you know, now this third brand that we’ve rounded out in our portfolio. We’ve really kind of reconstructed, gotten underneath the hood, restructured, and retooled our marketing and sales organizations to make sure we’re now a portfolio-driven company. We’re really excited about the future.
Unidentified speaker, Analyst: Oh, that’s great. Thanks so much for being here. I appreciate the time.
Toby David, Chief of Staff, Celsius: Appreciate it.
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