Isabella Yalif Photo
By Isabella Yalif
14,538: the number of Celsius cans that Vanderbilt has purchased for distribution in just fall of 2023. Daily life experiences reflect this astoundingly high number though, as these days, it’s impossible to walk on campus for five minutes and not pass someone holding a can of Celsius. What is this mega-popular drink though? How did it get so big? And what does the future entail for David as he takes on the Goliaths of the energy drink market?
What is Celsius?
Celsius is a healthy energy drink with no high fructose corn syrup, artificial flavors, or sugar while having a high caffeine content. For context, one can of Celsius has 200 mg of caffeine, while a Red Bull has just 102 mg. Celsius also boasts a wide variety of creative and untraditional flavors such as “Sparkling Oasis Vibe” and “Sparkling Cosmic Vibe.” The company claims that, in certain circumstances, the drink increases the consumer’s metabolic rate, stating, “When combined with exercise, CELSIUS helps your body burn more calories and body fat.” Celsius is able to increase people’s metabolism by incorporating thermogenics (supplements which are used to promote fat loss) into their drinks.
Celsius was founded in 2005, yet it only became popular in 2020 when sales increased by 74% compared to the year before. Over the following year, their stock had an annual increase of 300%. The company has only grown since then, making $650 million in revenue in 2022 and $310 million the year before.
What’s Driving the Growth
“…Celsius represents a lifestyle that many Gen Zers want to be associated with while having natural and healthy perceptions and appealing taste.”
Professor Kelly Haws, Vanderbilt University
To figure out exactly how Celsius achieved this rocket-powered growth, we asked Professor Kelly Haws. A Professor of Marketing at Vanderbilt’s Owen Graduate School of Management, Professor Haws’ work focuses on food decision-making. Haws explained, “While there are many aspects of the marketing and brand strategy (certainly social media, for example) that [Celsius is] using to drive this growth, it begins with having an appealing product that [sets them] apart from others in the very crowded beverage market.” Haws elaborated, saying, “Celsius represents a lifestyle that many Gen Zers want to be associated with while having natural and healthy perceptions and appealing taste.”
What is that lifestyle? Celsius presents it as the “live fit lifestyle.” As Celsius CEO John Fieldly explained to Marketing Dive, “Celsius is all about living fit, living life to the fullest, inside or outside the gym.” Through this framing, the company ignores its own claim that Celsius should be drunk around exercise. It extends the value of the drink and the live fit lifestyle to all of life.
Celsius markets its drink toward all genders, an anomaly in the testosterone-filled marketing of the majority of other energy drinks.
Another aspect of Celsius’ growth is its recent shift to targeting 18 to 24 year-olds. This younger audience is more attracted to the healthy lifestyle that Celsius is promoting. Furthermore, Celsius markets its drink toward all genders, an anomaly in the testosterone-filled marketing of the majority of other energy drinks. By appealing to everyone, Celsius may have entered a much larger market than its more established competitors.
The Gap Celsius Filled
To enter such a highly saturated and competitive market, Celsius needed to fill a hole that other energy drink companies were not addressing. Professor Haws provided her understanding of how Celsius served a need, stating, “Their positioning (‘Live Fit’) as a natural, healthy energy drink for those with an active lifestyle coupled with interesting and appealing flavor profiles in attractive packaging has been perceived as fulfilling a gap in the energy drink marketplace, particularly among younger consumers.”
Consumers do not like unhealthy products with unknown ingredients, they want an alternative.
Fitness-oriented drinks are a new spin on the energy drink industry, which is responding to a need: consumers do not like unhealthy products with unknown ingredients, they want an alternative. A 2021 AlixPartners survey revealed that “almost half of consumers say a healthy lifestyle has become more important” since the previous year and the beginning of the pandemic. This mindset change was one Celsius used to its advantage in its fast-paced expansion.
Fieldly, in his interview with Marketing Dive, describes Celsius’ mindset on their role in the market: “New consumers that are coming to the category don’t want their grandfather’s energy drink. They don’t want Red Bull. They don’t want Monster with all the sugars.” Celsius is the new drink, marketed to young people, that is healthy instead of filled with sugar.
Expansion
Beyond their well-targeted, need-fulfilling brand marketing, Celsius is engaging in various projects that could continue to fast-track their growth.
Celsius boasts a wide array of influencers who promote their products through Celsius marketing and their own. Marketing Brew reports that Celsius’ Executive Vice President of Marketing stressed “connecting to consumers via micro and macro influencers.” Haws further supports this point, claiming, “[Their brand] is reinforced through spokespeople and influencers aligned with this active lifestyle, touting the benefits of the product.” Celsius’ influencer list includes prominent figures such as Jake Paul, Brooks Nader, and Shaun White. In addition, their Instagram and TikTok accounts have 601,000 and 3 million followers, respectively. For context, on Instagram, the far more established brands of Monster Energy and Rockstar hold 8.6 million and 1 million followers, respectively.
“[Celsius’] use of college students as brand ambassadors has also contributed to their ability to reach Gen Z.”
Professor Kelly Haws, Vanderbilt University
Relatedly, Celsius has a robust college engagement program. The company provides free Celsius to college students, has college student ambassadors, and even sponsored Vanderbilt’s Lights on the Lawn event. Haws describes the impact of this approach, saying their “use of college students as brand ambassadors has also contributed to their ability to reach Gen Z.”
In August of 2022, Pepsico invested $550 million in Celsius, giving them an 8.5% stake in the company. Pepsico will be an essential backer of Celsius’ growth, possibly helping it expand to an even larger market share in the energy drink industry. Fieldly described the impact of this partnership, telling Marketing Dive, “It broadens our distribution, so that’s going to require somewhat of an increase in our overall marketing. That’s where the investment comes in.”
Celsius has also invested significantly in sponsorships, such as sponsoring Major League Soccer extra time and a Capitol Hill Celsius vending machine. Fieldly has indicated that even more groundbreaking partnerships are coming up.
As Celsius continues to explore growth opportunities, there could be significant potential on the international stage. Last quarter, 96.5% of the brand’s sales are attributed only to North America, whereas Monster Beverage attributes 40% of its quarter’s sales to a more global audience. The more established Monster brand indicates that energy drinks can succeed in the global market. Thus, Celsius has the opportunity to receive an increase in sales from the international stage in the future.
Conclusion
Through a well-designed brand that filled a gap in the market and a vast portfolio of marketing and growth projects, Celsius has catapulted into a major role in the energy drink market. Only time will tell whether Celsius can continue to rely on their “Live Fit” motto to enlarge their market share. Right now, though, as the number of Celsius enthusiasts on Vanderbilt’s campus and around the world continues to grow, remember that a calculated and ingenious marketing scheme fuels their rise.
