1st BATCH OF FILES AVAILABLE NOW!

For Celsius Holdings, it's challenging integration scenario: migrate its acquired Alani Nu brand from beer houses to PepsiCo system while finding right role for another newly acquired brand, Rockstar, which already moves thru blue system, all while balancing those priorities against those of core Celsius brand. At Morgan Stanley Global Consumer & Retail Conference earlier this week, chief of staff Toby David and CFO Jarrod Langhans made case that they've got their ducks all in a row for migration of Alani to Pepsi bottling system that should be complete by Q1 even as they clear some of dead weight of long-declining Rockstar brand and cut those facings over to the two sibling brands.Alani cutover to Pepsi bottling system officially occurred on Mon, with CELH reporting that 80% of US biz now is moving thru its strategic partner - more likely high 80s, David clarified. The cutover should be complete by end of Q1 next year, meaning Mar. "You never get the full 100% but we're on track to get even more beyond that high-80s number," he assured investors. He contrasted more deliberate transition of Alani brand to that of Celsius brand's own transition to Pepsi system a few years, when it was replacing abandoned prior partner, Bang, and needed to claim the shelf space immediately. (There was fair amount of disruption at time, as it was widely reported.) "With Alani we're going to be more incremental," he said, rather than going for "big bang" (pun partly intended). Key to implementing the transition successfully is Celsius' new role as energy category captain for Pepsi, key part of deal reached this summer that saw struggling Rockstar brand transitioned to Celsius. Tho Celsius brass didn't make analogy this wk, it's very similar to role Monster Beverage plays in managing energy strategy of its partner Coca-Cola, including flock of struggling Coke energy plays that it took over years back.Among the anticipated phasing, Q1 will see move of Alani into so-called tier 3 and tier 4 accts that follow Pepsi Plan-O-Grams, including thousands of indie c-stores as well as foodservice accts like colleges & universities. So-called tier 1 and tier 2 accts like Walmart and Target will operate according to their reset calendars in Q2 timeframe, tho Celsius team anticipates big gain in presence given Alani and Celsius brands' performance lately.CELH has set later date for Rockstar integration, sometime in first half, tho most of lag is attributed to Canadian biz converting a month or 2 later than US. Rockstar inventory already sits in Pepsi DCs thanks to its longstanding role in energy portfolio, Celsius needs to get brand into its logistical orbit structure now that it owns and operates it.Besides that new role of category captain for PEP, Celsius boasts another key advantage in keeping integration process on track: its methodical onboarding of CPG vets, many from PepsiCo itself, who're skilled in disciplines like price/pack architecture and revenue growth management as co tries to steer array of brands to their right roles. Prexy/COO Eric Hanson was one of those; indeed, recruitment of multibrand operator in Mar signaled to some within energy space that Celsius was sure to transition Alani to Pepsi system. On marketing side, addition of longtime PEP exec Rishi Daing as CMO fresh off unsuccessful launch of Mark Anthony's Messi-branded sports drink brings exec well experienced in maintaining different brand voices. As "the conductor," he overseas distinct brand teams for Celsius, Alani and Rockstar platforms working with cross-functional teams in different disciplines. Then there's new board addition Michael Del Pozzo, a nearly 25-yr Pepsi vet who reports directly to CEO Ramon Laguarta in his role as prexy for commercial & customer in N Amer. So CELH has ally "at the top of the food chain" at Pepsi who can communicate energy dynamics to other leaders there. Oversees, addition of Pepsi vet Garrett Quigley last month brings exec well-versed in distribution dynamics of markets where brand has been expanding.So what's the future hold for Rockstar? With several vets of brand's indie days within its ranks, Celsius is hoping to find way forward that capitalizes on its position as only brand in portfolio that offers full-sugar entries, reaching consumer cohort that's not in what Celsius CEO John Fieldly likes to call "modern energy," that is, zero-sugar entries with better-for-you aura. Rockstar brand "carries a lot more than its revenue numbers say today," David emphasized to Morgan Stanley audience. But improvement "won't happen overnight" and there will be some rationalization, with CELH team not hesitating to put "faster cars," as David put it, into space currently held by some weaker Rockstar sku's. "In many circumstances, that will be Celsius items," he said.Tho Celsius leaders have been generally complimentary about efforts the beer houses made in helping to ignite Alani brand, David and Langhans pointed to sharp variation in regional Celsius Holdings share that they anticipate Pepsi transition will help remedy. In core Florida market, its brands hold low- to mid-20s share and in NY (where Celsius continues to move thru unaligned Big Geyser house) brands hold high-teens share. But there are plenty of markets where brands collectively hold upper single digits. Tho execs didn't go there, that would seem at least in part to be reflection of uneven performance of beer houses in NAs.

From New Perch as Pepsi's Category Captain, Celsius Holdings Outlines Integration Process for Alani, Rockstar Brands; 'High 80s' of Alani Biz Cut Over to Blue System in First Week, David Reports

Publishing Info