Celsius Holdings, Inc. (NASDAQ:CELH) Q3 2023 Earnings Call Transcript

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John Fieldly: Yes. I think, Eric, when you look at it, that’s something that we’re really focused on. And it’s going to come from a variety of different areas in order to continue to drive forward. We are entering uncharted territories at north of a 10% share, which hasn’t been achieved in the energy category in over a decade. But when you look at some of the great — what has taken place over the last nine months this year, it’s just really a great achievement to the team and our partners. I think one exciting news piece we just got recently is from Numerator and the way we’re tracking household penetration, and our household penetration more than doubled. So, we were right around a 25% household penetration versus 11.1% in the year ago period when we tracked it last time per Numerator.

And we were — Celsius was the number one growth brand in all of sports and energy. So, we’re getting some really good traction there. The teams have been doing really great on leveraging our marketing strategies. I think there’s a lot of opportunity to further drive ROI out of our marketing programs within our sales programs as well. So, where velocities go from here, that is — that’s really somewhat an unknown but we’re working to continue to drive that forward. I think on the resets coming in, when you look at the expansion that we anticipate getting additional shelf space, that’s going to allow us to have better presence. That’s going to further build out that billboard effect to be able to engage with the shopper at the point of purchase, which is super critical.

So, time will tell. I guess we’ll find out as we continue to evolve quarter-over-quarter on future calls.

Operator: Our next question comes from the line of Jim Salera with Stephens. Please proceed with your question.

Jim Salera : Congrats on the good quarter. Thanks for taking my question. I wanted to follow up on the foodservice piece because it seems like that would be an end market that would traditionally be for kind of carbonated soft drinks or teas. Do you have a sense for — are those consumers in foodservice switching from drinking a Pepsi to drinking a Celsius or drinking tea to a Celsius? And if that’s the case, are you able to track that into switches from soft drinks or tea at retail as well?

John Fieldly: Jim, that’s the great question. That’s a huge unlock that we’re working on. I think we need a little bit more data coming in as we expand into foodservice. What we’re seeing with the Celsius consumer, what I think is fascinating. We saw this in convenience and we see this where our consumer is, number one, we’re incremental to the category. And also, our consumer, we’ve seen them have a bigger basket ring, i.e. purchasing Celsius with a water or a food item or a snack, which I think is another competitive advantage when looking at the Celsius consumer. Within foodservice, we have a hypothesis that our consumer is actually getting water or not getting a beverage because they’re ordering on potentially Delivery Dudes or another platform where they’re not getting the fountain drink.

So, we’re not competing with the fountain. But we need more data on that. What we do see is within some of the apps that initial feedback has been on our set is that we are being incremental to these eateries and fast casual restaurants within the beverage purchase.

Jim Salera : That’s helpful color. And you might have already kind of addressed this. Just saying its still early days, but just thinking about the implications that, that has moving forward. Do you think there’s a possibility that if you do see those tea or carbonated soft drink consumers buying Celsius but not participating in other energy buys, that you could find yourself outside of the energy category in retail and really be placed kind of throughout the store unlike some of the other traditional energy drinks?

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