CELH: My Perspective
I believe that the future of CELH is bright based on past, current, and future revenue increases. First, the past. Since 2012, revenue for CELH has steadily increased: 7.6M(2012), 10.6(2013), 14.6(2014), 17.2(2015), and 22.8(2016). The question is why. The energy drink business, as many of you know, is a very large business. We all have seen the Monster Energy logo, or have heard that Red Bull “gives you wings”. However, unlike many things that people enjoy, there are health risks. The best example of this is the smoking industry. People realized that is was unhealthy to smoke, and as a result, many alternatives that were similar to smoking emerged and now attract a hefty audience. The same thing is happening, and will continue to happen, in the energy drink business. CELH offers a healthier alternative to many of the unhealthy energy drinks available and people like the idea, proven by the fact that their revenue has continued to increase for the past five years.
Second, the present. In 2016 Q3 & Q4, the revenue was around 6M. This greatly increased to 10M in 2017 Q1. Such a large increase shows that this movement continues to gain momentum in the domestic market from health conscious consumers, and consumers that just enjoy Celsius better than other leading competitors. Also, CELH continues to grow in other markets, which is discussed more below. In China, Celsius has had somewhat successful launch. Although it is not a full-scale launch, this current partial launch will just add more revenue to CELH, which will show up in 2017 Q2 revenue.
Third, the future. A main component of CELH is the idea that it will continue to expand and, through what they are doing, it is logical that they will. First, CELH is proven that they are committed to expanding their market. This is seen through their appearances at different events, such as the the National Association of Convenience Stores (NACS) Show that took place a little less than two weeks ago. Also, it is being reported that CELH will appear at Maxim Group's Innovative Leaders in Beverage Conference. These continued attempts to get their product to a larger audience proves the intention of future growth. Second, this attempt at future growth has proven to work. The most recent example of this is in China. The energy drink market in China is something that is relatively new, which works to CELH’s advantage. In the domestic market, the bulk of revenue goes to a few companies, Red Bull to name one. However, in China, and other underdeveloped markets, there is a more level playing field for CELH to work with. Domestically, CELH is focusing on getting consumers to switch from one energy drink to another, something that can sometimes be hard to do, but is still being done. In these underdeveloped markets, it is much easier. When a consumer is going to buy a product for the first time, they compare the product. When the customer does this, Celsius will be the clear choice because it is much healthier than the others. Since it is easier to pick up new customers in underdeveloped markets than convert customers in developed markets, CELH should see a fairly sizable amount of the market share in these types of markets, such as China. So although it is somewhat disappointing that the FULL distribution of Celsius will be delayed in China, it is still important to consider to full picture and future that CELH has.
Lastly, GO CELH!
