Celsius Holdings and PepsiCo have executed a strategic partnership that could reshape the energy drink category for convenience services operators across the U.S. and Canada. As part of the deal, PepsiCo will lead distribution for the Celsius Holdings portfolio in the U.S. and Canada. Additionally, Celsius’ Alani Nu brand will join PepsiCo’s distribution system, and Celsius will acquire the Rockstar Energy brand in the U.S. and Canada from PepsiCo. PepsiCo will continue to distribute Rockstar Energy in the U.S. and Canada on behalf of Celsius Holdings, and it will retain ownership of the Rockstar Energy brand internationally.
The move positions Celsius as PepsiCo’s strategic energy lead in the United States, managing Celsius, Alani Nu and Rockstar Energy brands.
Gaining access to PepsiCo’s distribution infrastructure enables Celsius to provide operators with streamlined access to a broader range of energy products and support. This can help convenience operators stock high demand items more efficiently, reach new consumer segments and respond faster to market trends.
Energy drinks continue to be one of the fastest-growing segments in convenience retail. With the addition of the Rockstar brand and increased distribution reach for Alani Nu, Celsius is positioned to market a unified energy portfolio through planogram design, SKU prioritization and promotional efforts. Adding Rockstar to Celsius Holdings adds an “OG” energy drink to complement its performance-forward and modern energy drinks.
Fitness- and lifestyle-focused brand Alani Nu targets women and wellness-minded consumers. The zero sugar, low calorie energy drink brand appeals to consumers who might avoid traditional energy drinks. Convenience services operators serving fitness centers, healthcare locations and offices where demand for functional, better-for-you beverages is growing could capture incremental sales with the brand.
“Stepping into the role of PepsiCo’s strategic energy drink captain in the U.S. is a pivotal milestone,” said John Fieldly, chairman and CEO of Celsius Holdings, in a release. “With this partnership, we can deliver greater innovation, sharper execution and sustained brand growth.”
“Energy is an important growth category, and we believe this move with our partner Celsius creates a stronger multi-brand energy portfolio that is better positioned to serve different consumer cohorts,” said Ram Krishnan, CEO of PepsiCo Beverages U.S., in a statement.
PepsiCo has acquired $585 million in newly issued convertible 5% preferred stock while extending its existing preferred stock to the same conversion period. As a result, PepsiCo’s ownership in Celsius Holdings has increased to approximately 11% on an as-converted basis. PepsiCo also gains another seat on Celsius Holdings’ board of directors.
