Dive Brief:
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Celsius Holdings recently completed a strategic acquisition of Big Beverages Contract Manufacturing for $75 million, a company they have been partnering with for a long time. The deal was finalized on Nov. 1
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This acquisition will give Celsius more control over its supply chain, allowing for quicker innovation cycles and increased production flexibility.
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With the energy drink sector experiencing a slowdown due to consumer spending cutbacks and reduced visits to convenience stores, Celsius is taking steps to secure a more promising future.
Dive Insight:
Despite challenges in the energy drink sector, Celsius is positioning itself for growth and success. The acquisition provides Celsius with a state-of-the-art 170,000-square-foot manufacturing and warehouse facility, offering great flexibility for its operations.
The new facility allows Celsius to scale up as needed, adjust production based on consumer demand or launch limited-time offerings. Unique flavors play a significant role in attracting consumers, particularly younger demographics, in a competitive market dominated by Monster and Red Bull.
By gaining more control over its supply chain, Celsius aims to enhance margins and profitability. CEO John Fieldly expressed optimism about the acquisition’s potential to drive product innovation and production capabilities for Celsius’ performance energy drinks.
The acquisition ensures that the Charlotte-based Big Beverages will continue as the primary manufacturer of Celsius products, with the existing management team and workforce staying on board.
As Celsius prepares to announce its third-quarter results on Nov. 6, the company remains focused on future growth within the evolving energy drink market. Industry projections suggest that energy drinks could become a $30 billion industry in the next five years, with a growing number of consumers incorporating these beverages into their regular routines.
Celsius has experienced substantial growth in recent years, aligning with the increasing demand for functional and better-for-you products, especially during the pandemic. Their sugar-free, calorie-free energy drink formula has resonated with consumers seeking workout and energy benefits without the typical crash associated with traditional energy drinks. In 2020, Celsius reported revenue of $131 million, which surged to $1.3 billion last year.