PepsiCo announced a US$550 million investment in energy drink maker Celsius Holdings, acquiring an 8.5 percent stake.
Upon the news, shares of Celsius closed up 11 percent, bringing its market value to US$7.45 billion.
Alongside the investment, the companies announced a ‘long-term, strategic distribution arrangement’ which will see PepsiCo take on the US distribution of Celsius’ products. The drinks behemoth will also become the ‘preferred distribution partner’ for Celsius worldwide. As part of the deal, PepsiCo will nominate a director to serve on the Celsius board.
Energy drinks are a fast-growing beverage segment. In 2020, PepsiCo snapped up energy-drink brand Rockstar and recently struck a deal to handle the distribution of Bang Energy. This deal helps strengthen its ties to the energy drinks category
Celsius was founded in 2005 and has reported explosive growth for its energy drinks during the pandemic. The company pitches its beverages as ‘healthy’ energy drinks, targeting younger consumers who are active. Drinks include ingredients like ginger and green tea and contain no artificial preservatives or sugar.
Working with PepsiCo, Celsius is expecting to gain more shelf space in existing retailers and expand into independent stores, such as service stations.
