PepsiCo to invest $550m in energy drinks business Celsius

PepsiCo has announced a $550 million investment in Celsius Holdings to become the long-term US distributor of the brand’s energy drinks.

The agreement, which came into effect today, includes distribution in retail and foodservice channels. The deal will see PepsiCo become “the preferred distribution partner globally for Celsius”.

The beverage giant will acquire an estimated 8.5% ownership in Celsius. As part of the contract, PepsiCo will also nominate a member to Celsius’ board.

Kirk Tanner, CEO of PepsiCo Beverages North America, said: “We are extremely pleased to partner with Celsius and excited about the opportunity for our two organisations to drive growth and innovation in the energy beverage category. The Celsius brand’s growing momentum, coupled with the strength of PepsiCo’s portfolio and go-to-market capabilities, creates a combination we believe will be very compelling and valuable to retailers and consumers.”

Celsius president, chairman and CEO, John Fieldly, added: “We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the US convenience and gas channel where approximately 70% of energy drinks are sold”.

He continued: “It also provides a strategic partnership that is expected to accelerate growth for both companies globally. In addition, this partnership will drive efficiencies allowing our teams to consolidate sales, marketing and distribution efforts with associated cost benefits, which we expect to recognise once the initial transition is completed.”