Celsius (NASDAQ:CELH) executives told attendees at the UBS Global Consumer and Retail Conference that they expect the energy drink category to remain a key growth engine within beverages, citing shifts in consumption toward daily routines and continued momentum in sugar-free offerings.
Energy category trends: lifestyle use and sugar-free growth
Management said they do not publicly disclose a specific forecast for category growth, but described energy as “the biggest driver within beverage and consumer goods.” The team emphasized that energy has evolved from an impulse purchase into a more habitual “daily lifestyle routine” for consumers.
Convenience channel and sourcing of demand
Asked about whether higher gas prices or a cautious consumer backdrop have affected volumes in convenience stores, management said the first couple of months of the year had been “great” for both Celsius and Alani. They pointed to singles in convenience as an important growth driver for Celsius over the last six months, and said convenience is also a large opportunity for Alani this year.
The company also referenced third-party reports indicating limited correlation between gas prices, foot traffic, and beverage sales, including observations that foot traffic was up in January and February and that energy continued to grow during periods of higher fuel costs in 2022.
On where energy demand is being sourced from, executives said ready-to-drink and drip coffee remain meaningful sources of consumer trade-in. They added that retailers are increasingly adjusting shelf space allocations, including signs that some stores, even in convenience, are shrinking beer cases. The company also cited sourcing from hydration and premium water, pointing to expanding usage occasions for energy drinks.
Pepsi partnership and “category captaincy”
Management described its “category captaincy” role within Pepsi as a structural change that strengthens the partnership and gives Celsius greater influence in energy execution. The company said the captaincy positions it as an “insights and growth and marketing engine” for Pepsi’s energy business, while leveraging Pepsi’s direct-store-delivery network to drive distribution and execution.
Executives highlighted several tangible elements of the arrangement:
- Priority periods tied to the captaincy
- Ability to help manage planograms in Pepsi-controlled coolers across the U.S.
- Support for stronger ACV and distribution through tighter alignment with Pepsi
Portfolio view: Celsius, Alani, and Rockstar
On the Alani acquisition, management reiterated that consumer overlap between Celsius and Alani has remained limited and comparable to the overlap seen between other major energy brands. The company said it re-ran its crossover analysis after 12 months and did not see a significant change, even as Alani delivered “triple-digit” growth off an already strong base.
Executives contrasted the brands’ flavor profiles and consumer appeal, arguing that the portfolio benefits from two of the category’s biggest growth drivers: female consumers and sugar-free. They also said Alani’s brand awareness remains relatively low in some regions, citing New York City as a market where the product can be difficult to find, and framed that as incremental upside as Pepsi distribution and planogram resets roll out.
Regarding softer recent trends in core Celsius tracking data, management pointed to a planned SKU rationalization in the first quarter, designed to reduce lower-productivity items while expanding distribution of the highest-velocity products (“put the fast cars on the track”). They encouraged investors to watch ACV gains in the company’s top 10–15 SKUs over the next several weeks. They also noted Celsius is lapping four flavor launches in the first quarter of the prior year with zero launches in the current first quarter, with innovation expected to layer in later in the year.
On the 16-ounce Celsius ESSENTIALS line, management said performance has been a “drag,” but the format remains important and the company is not “giving up” on it. They said the team is working on marketing and differentiation so the line is not viewed simply as a value offering.
For Rockstar, management said 2026 is focused on stabilizing the business, rationalizing SKUs, and refocusing on the core consumer (including a “male-heavy” demographic and 16-ounce offerings). The goal, they said, is to stabilize first and then return Rockstar to growth.
Innovation cadence, limited-time offerings, and financial considerations
Executives emphasized a more deliberate promotional and innovation cadence across the portfolio, aiming to avoid overlapping promotions between Celsius and Alani and instead keep one of the portfolio brands (Celsius, Alani, or Rockstar) on promotion with minimal overlap. They also said Celsius will have multiple limited-time offerings (LTOs) this year, compared with one last year, while Alani’s number of LTOs is expected to be similar to last year.
On inventory dynamics, management said Celsius scanner data and shipments into Pepsi have recently looked similar. For Alani, executives described a $25 million net revenue benefit in the fourth quarter as a pull-forward from the first quarter related in part to loading the “Cherry Bomb” LTO into the Pepsi system in December even though it sold through in scanner data during the first quarter. They cautioned against expecting additional “pipe fill,” saying Pepsi already has sufficient inventory.
On profitability, management reiterated expectations for a “stairstep” gross margin pattern from fourth-quarter levels through the first half, with an outlook to reach the low 50% range in the back half of the year. They said one-time fourth-quarter costs related to distribution transition (including scrap, returns, and freight) affected results, and they expect integration of Alani into the company’s operating model by the end of March, with Rockstar integration targeted by the end of the second quarter. The company also discussed aluminum cost pressures, including the Midwest premium, and said it intends to apply the same contracting and supply chain tactics used for Celsius to Alani and Rockstar.
Finally, on capital allocation, the CFO said priorities include continued investment in growth, potential increased international investment over time, paying down approximately $700 million of debt, and executing the existing share repurchase authorization (noting $40 million was repurchased in the fourth quarter, with $260 million remaining). Management also said M&A remains an option if opportunities are incremental and value-accretive.
About Celsius (NASDAQ:CELH)
Celsius Holdings, Inc is an American beverage company known for its line of fitness and energy drinks formulated to support active lifestyles. The company’s flagship product, the Celsius® brand, features beverages enhanced with ingredients such as green tea extract, guarana seed extract and essential vitamins, positioned as a functional alternative to traditional energy drinks. These products are designed to deliver a blend of ingredients that support metabolism and sustained energy without high sugar content or artificial preservatives.
In addition to its core carbonated drink portfolio, Celsius has expanded its offerings to include powder mixes and non-carbonated ready-to-drink variants, catering to consumer preferences around taste, convenience and nutritional needs.
