Subscribe Now

* You will receive the latest news and updates on your favorite celebrities!

Trending News

PepsiCo Buys $550m Stake at Energy-drink Company Celsius
Startup News

PepsiCo Buys $550m Stake at Energy-drink Company Celsius 

As part of a long-term distribution agreement with the smaller business, PepsiCo revealed on Monday that it has invested $550 million, an 8.5% stake in energy drink manufacturer Celsius Holdings.

A “long-term strategic distribution arrangement” is part of the agreement and will transfer most of Celsius’ present distribution in the United States to PepsiCo, with certain exceptions in the retail and restaurant channels. Unquestionably, PepsiCo will oversee Celsius’ international distribution.


PepsiCo Buys $550m Stake at Energy-drink Company Celsius


The investment in Celsius allows PepsiCo to broaden its exposure in the energy drink segment with a functional offering after acquiring Rockstar for $3.85 billion in 2020.

In addition to expanding into independent businesses like petrol stations, Celsius anticipates gaining additional shelf space in current merchants. Starting on Monday, Pepsi will help with the distribution. Shares of Celsius closed up 11% on the news, bringing its market value to $7.45 billion.

While Celsius typically competes in the hot energy drink market, its promise that it can burn calories makes it stand out. The company’s website states that their mix, when used in conjunction with exercise, “is clinically proven to improve your metabolism and help you burn body fat.” Green tea extract, guarana, and ginger root are important components.


During a Monday investor presentation, Celsius management discussed the PepsiCo transaction and called it “a revolutionary opportunity.” Its dual structure, which includes a distribution agreement and a large investment, according to CFO Jarrod Langhans, is intended to position the brand for success.

He said,

“The goal was really to make sure that we were fully aligned and maximizing the potential of the distribution agreement. Having skin in the game, having an investment — we just felt it was important to wrap both pieces together into one,” 

While praising the efficiency of utilizing PepsiCo’s direct retail distribution network, Celsius acknowledged that its network of more than 250 independent distributors has been crucial to its success. With prospects in independent convenience shops, college campuses, military sites, vending, and food services, Celsius anticipates that the arrangement will increase its distribution over the course of the next 12 months by around 40%. Additionally, the expense of maintaining a distribution network with a lot of fragmentation would be reduced.


By the end of the year, most of Celsius’s distribution agreements will be transferred to the PepsiCo system, the business says, but a handful will still remain with independent distributors.

For PepsiCo, acquiring a share in Celsius would enable it to expand its reach into the category, which is currently led by Rockstar, a popular product on the market. Celsius is known for its metabolism-boosting, zero-sugar beverage without artificial colors or flavors and non-GMO components. 


This is because there will be a rise in consumer interest in functional energy in the coming years. For the first 24 months of the contract, Celsius would be the sole healthy, useful energy drink in PepsiCo’s lineup.

Related posts

Leave a Reply

Required fields are marked *