PepsiCo is boosting its stake in energy drink maker Celsius and making other changes to its energy drink portfolio.
The beverage manufacturers announced Friday that Celsius Holdings’ Alani Nu brand will move into the PepsiCo distribution system in the United States and Canada. PepsiCo also upped its stake in Celsius Holdings for $585 million to about 11% and sold its Rockstar Energy brand in the United States and Canada to Celsius Holdings.
Celsius Holdings will become the PepsiCo strategic energy lead in the United States, managing the Celsius, Alani Nu and Rockstar Energy brands, while PepsiCo will lead distribution for the Celsius Holdings portfolio in the United States and Canada, the companies said. PepsiCo will continue to own the Rockstar Energy brand internationally, and it will continue to distribute Rockstar Energy in the United States and Canada for Celsius Holdings. It acquired the Rockstar brand in 2020 for about $3.9 billion.
“This agreement marks the next step in PepsiCo reshaping its brand portfolio to position us for long-term growth,” said Ram Krishnan, CEO of PepsiCo Beverages U.S. “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. This transaction creates an aligned incentive structure for both parties to bring their individual expertise to better compete in the energy category.”
The agreement leverages the strengths of both beverage companies to scale the combined energy drink portfolio with a more unified commercial strategy, PepsiCo and Celsius Holdings said.
Alani Nu’s move into the PepsiCo system will increase the brands retail availability in the United States and Canada, including within foodservice and other growth channels, according to the companies. And for Celsius Holdings, the Rockstar Energy brand will be additive to its portfolio, it said, attracting incremental customers who prefer classic energy drink flavors and formats.
“Stepping into the role of PepsiCo’s strategic energy drink captain in the U.S. is expected to be a pivotal milestone in our journey to shape the future of modern energy and grow our brands within a leading beverage distribution system,” Chairman and CEO of Celsius Holdings John Fieldly said. “With a proven functional beverage portfolio and a stronger long-term partnership with PepsiCo, we believe that Celsius Holdings is well-positioned to deliver greater innovation, sharper execution and sustained brand growth. Together, we will reach more people, in more places, more often, with a total energy portfolio that offers options for every consumer and creates greater value for all our stakeholders.”
In August 2022, PepsiCo and Celsius struck a long-term distribution deal, and PepsiCo took about 8.5% ownership of the energy drink maker for about $550 million. Celsius Holdings acquired Louisville, Kentucky-based Alani Nu in February for $1.8 billion.
Boca Raton, Florida-based Celsius Holdings Inc. is a functional beverage company and the owner of energy drink brand Celsius and hydration brand Celsius Hydration.
Purchase, New York-based PepsiCo is known for its food and beverage portfolio, including brands like Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream.
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