PepsiCo Alignment and Alani Expansion Bode Well for Celsius' Growth, but Competition Is Intense

Celsius is poised to grow in the energy drink category in North America, as recent partnership agreements with PepsiCo further align the interests of the two parties for long-term growth. In addition, the acquisition of Alani Nu has unlocked opportunities to tap demand from female consumers. That said, we remain skeptical that Celsius has successfully built a durable competitive position underpinned by brand intangibles or cost advantages, given intense competition from resource-rich incumbents with strong brands, such as Monster and Red Bull, and smaller entrants’ propensity to deliver innovation.