Beer Marketer's Insights - As Monster Motored Out of Soft Q1, Investors Keep Faith; Strong Flavor Innovation Should Buoy; Narrowed Price Gap with Cold-Box CSDs Also a Tailwind

Investors seem to be keeping the faith in energy category despite disappointing quarterly earnings reports first from Celsius Holdings and then, yesterday, from Monster Beverage. After pre-opening jitters, they bid MNST shares back up today after co-CEO Rodney Sacks painted picture of improving fundamentals as period wore on, with co entering Q2 with momentum. CELH brass had made the same case a week earlier and have been rewarded with bounceback in shares that had briefly tanked. The markets have not been as kind to other public bevcos that have disappointed. Case in point: Black Rifle Coffee, down from $2.25 per share to $1.60-ish since reporting. "Trends in our Nielsen-measured categories have been accelerating since early 2025, consumer purchases in our non-Nielsen measured categories are following the same trend," Rodney reported. "Growth opportunities in household penetration and per capita consumption along with consumers&#39; growing need for energy are positive trends for the category." As he pointed out, 13-wk scans that were up 10% in N Amer and nearly 14% in both EMEA (mainly Europe) and APAC (Asia). That doesn't signal a category that's lost consumers' interest. Among factors that led to noise in period was lurches in ordering patterns by Coke bottlers, echoing an issue that has regularly dogged Celsius' own activities within Pepsi system. Still, those lurches simply defer orders to later qtr, and Q2 started off with an Apr that was "very strong, very robust, as we would have expected given what had happened in the quarter," per co-CEO Hilton Schlosberg.Even given economic stresses, "the category is healthy," Sacks said. "We had some slowdown a little bit last year. We also are seeing some improved numbers, and it&#39;s an affordable luxury at the end of the day. And the numbers continue to be strong." One topic that didn't come up: tho working class Hispanics comprise key base for Monster Energy, there was no commentary or questions on whether they've been going AWOL amid administration's deportation frenzy.A reminder on the numbers. As we reported yesterday afternoon, net sales dropped 2.3% to $1.85 bil but edged up 1.9% if alc brands are excluded. Gross margin widened to 56.5% from 54.1% a year earlier, thanks to price hikes and supply chain improvements. (Margin likely will soften a bit in Q2 as aluminum and other costs rise due to Trump tariff actions, Schlosberg warned.) Operating income rose 5.1% to $569.7 mil, +7.9% to $591.2 mil if struggling alcohol segment is excluded. Not much said on actions MNST team is taking to get its Beast alc portfolio back on track, but it's small part of mix. Execs did say they're eying overseas markets for those brands.Accelerating Innovation, if Mainly on Flavor Front US saw flow of innovation, if more on flavor side than platform side. Jan brought Reign Storm Tropical, Bang Sour Ropes and Monster Ultra Blue Hawaiian, then Feb brought Juice Monster Viking Berry, Killer Brew Mean Bean, Killer Brew Loca Moca and Reign Total Body Fuel White Haze, as Schlosberg outlined. Mar brought Bang Any Means Orange. And innovation cycle is accelerating. "One of the great successes we&#39;ve been able to achieve with Ultra Hawaiian and Vice Guava was we were able to get product on the shelves a lot quicker than ordinarily we would have," he said at another point.Overseas, besides flow of innovation, key prong of strategy is further expansion of fighter brands Predator and Fury to offer affordable alternative that shields Monster brand itself from pressure to cut prices. Further launches of both are afoot, investors were informed.Eyeing Further Pricing "We continue to review opportunities for price increases domestically and internationally," Sacks indicated. Asked whether MNST was concerned that main rival (that would be Red Bull) hasn't taken price, Schlosberg said, "we have to run our own play" and noted that energy pricing has narrowed what once was "a big divide between carbonated soft drinks and energy." And while MNST has ceded some volume share, chief growth officer Rob Gehring has set aggressive plan to regain it, Schlosberg assured.Sayonara to Sacks as CEO Yesterday's earnings call came as a milestone in likely representing last such call over which Sacks will preside as he relinquishes co-CEO role to his longtime partner Schlosberg after shareholder meeting set for Jun 12. In noting that at end of call, Rodney resisted any urge for sentimental excursion, saying simply, "it's been 30 years, and I wanted to thank everybody has been really a great privilege to be in this position to have dealt with you guys have taken these meetings and been involved in every aspect." He'll retain chmn role. Recall that for long time he held sole CEO responsibility despite what seemed to be equal sharing of oversight duties with Hilton, who apparently pressed for formal recognition of co-equal role as his older partner endured health scare during pandemic and began to slow down from obsessive work rate that had characterized duo for several decades. The two South African immigrants had started with modest natural-bev player called Hansen Beverage, whose healthy-soda portfolio eventually transitioned to MNST's strategic partner Coca-Cola and soon vanished from market. (We got assist from Thomson Reuters transcript in writing this story.)

As Monster Motored Out of Soft Q1, Investors Keep Faith; Strong Flavor Innovation Should Buoy; Narrowed Price Gap with Cold-Box CSDs Also a Tailwind ^Featured

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As Monster Motored Out of Soft Q1, Investors Keep Faith; Strong Flavor Innovation Should Buoy; Narrowed Price Gap with Cold-Box CSDs Also a Tailwind Featured

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As Monster Motored Out of Soft Q1, Investors Keep Faith; Strong Flavor Innovation Should Buoy; Narrowed Price Gap with Cold-Box CSDs Also a Tailwind ^Featured