1 00:00:10,160 --> 00:00:14,000 Speaker 1: Hello, and welcome to another episode of the Odd Lots podcast. 2 00:00:14,080 --> 00:00:16,360 Speaker 2: I'm joll Wisenthal and I'm Tracy Alloway. 3 00:00:16,680 --> 00:00:20,560 Speaker 1: Tracy, We're in the office drinking Celsia's energy drinks. I'm 4 00:00:20,600 --> 00:00:22,720 Speaker 1: just going to start this one like really directly. 5 00:00:22,400 --> 00:00:25,280 Speaker 2: Like, wait, should I do the ambient sound? Yeah? Okay, 6 00:00:29,080 --> 00:00:31,760 Speaker 2: there we go. Okay, yes, you can't get better than 7 00:00:31,800 --> 00:00:34,920 Speaker 2: being in the office drinking Celsius. It's not that early. 8 00:00:35,000 --> 00:00:37,320 Speaker 2: Actually it's nine in the morning, so we needed the 9 00:00:37,360 --> 00:00:38,200 Speaker 2: caffeine boost. 10 00:00:38,840 --> 00:00:40,560 Speaker 1: This is actually my second one of the day, so 11 00:00:40,600 --> 00:00:43,000 Speaker 1: I've had two. I'm on my second can of the 12 00:00:43,040 --> 00:00:47,000 Speaker 1: Celsius energy drink, and also I had a coffee today. 13 00:00:47,040 --> 00:00:51,000 Speaker 2: So people are always like, I love people are always asking, oh, 14 00:00:51,120 --> 00:00:53,279 Speaker 2: does Joe just not sleep? How does he get up 15 00:00:53,280 --> 00:00:55,280 Speaker 2: so early in the morning. The answer is no, he 16 00:00:55,400 --> 00:00:59,040 Speaker 2: doesn't because he has like three celsiuses and two coffees 17 00:00:59,080 --> 00:00:59,960 Speaker 2: and who knows what else. 18 00:01:00,120 --> 00:01:02,480 Speaker 1: Okay, so I know we could just talk a lot 19 00:01:02,520 --> 00:01:06,920 Speaker 1: about my weird sleep patterns or my caffeine consumption patterns. 20 00:01:07,240 --> 00:01:11,319 Speaker 1: But speaking of Celsius holdings this energy drink that we're 21 00:01:11,520 --> 00:01:14,240 Speaker 1: both drinking in the office right now, or speaking of 22 00:01:14,240 --> 00:01:17,600 Speaker 1: Celsius It's owned by a company called Celsius Holding. This 23 00:01:17,760 --> 00:01:21,720 Speaker 1: was like a three dollars stock in twenty eighteen. Today 24 00:01:21,760 --> 00:01:25,039 Speaker 1: it's one hundred and sixty seven dollars stock. So just 25 00:01:25,080 --> 00:01:29,840 Speaker 1: an absolutely extraordinary, mega home run winner for the company 26 00:01:29,880 --> 00:01:32,800 Speaker 1: behind this energy drink. And the thing is, I don't 27 00:01:32,840 --> 00:01:35,280 Speaker 1: know why, and I don't know why I'm drinking it, 28 00:01:35,360 --> 00:01:38,800 Speaker 1: Like why am I drinking Celsius and not Monster or 29 00:01:38,840 --> 00:01:41,200 Speaker 1: Red Bull? I don't know. It's something in the air well. 30 00:01:41,240 --> 00:01:43,520 Speaker 2: I was going to ask, because you introduced me to 31 00:01:43,640 --> 00:01:45,320 Speaker 2: Celsius and you're like, oh, we got to go get 32 00:01:45,360 --> 00:01:47,680 Speaker 2: a Celsius And at the time had never heard of 33 00:01:47,720 --> 00:01:49,920 Speaker 2: it before. How did you hear of it? Why did 34 00:01:49,960 --> 00:01:50,600 Speaker 2: this become a thing? 35 00:01:50,720 --> 00:01:52,480 Speaker 1: I think, like, you know, the cool I go to 36 00:01:52,520 --> 00:01:54,920 Speaker 1: the gym and it seemed like the cool people at 37 00:01:54,920 --> 00:01:57,000 Speaker 1: the gym were drinking it, or they had it in 38 00:01:57,080 --> 00:01:59,240 Speaker 1: the they have it in the refrigerator at my gym, 39 00:01:59,360 --> 00:02:00,920 Speaker 1: and I think, like, I don't know. I probably saw 40 00:02:00,960 --> 00:02:03,720 Speaker 1: someone on Instagram drinking it, and then I started drinking, 41 00:02:03,800 --> 00:02:05,960 Speaker 1: and then I posted about it, and then someone was like, oh, 42 00:02:05,960 --> 00:02:08,960 Speaker 1: you know, it's publicly traded, which I didn't even realize, 43 00:02:09,480 --> 00:02:12,000 Speaker 1: and then I've been obsessed partly, I don't know, like 44 00:02:12,000 --> 00:02:14,120 Speaker 1: I've just sort of been fascinated, but like, where did 45 00:02:14,160 --> 00:02:14,639 Speaker 1: it come from? 46 00:02:14,680 --> 00:02:14,720 Speaker 2: What? 47 00:02:14,960 --> 00:02:17,480 Speaker 1: Like how does this happen that a new brand emerges 48 00:02:18,240 --> 00:02:20,639 Speaker 1: and we're all drinking it? Like where did it come? 49 00:02:20,720 --> 00:02:22,080 Speaker 1: I just don't, like I want to know where it 50 00:02:22,080 --> 00:02:24,320 Speaker 1: came from because it's now it's everywhere. 51 00:02:24,040 --> 00:02:25,120 Speaker 2: Yeah, but I don't know why. 52 00:02:25,320 --> 00:02:25,560 Speaker 1: Well. 53 00:02:25,639 --> 00:02:28,400 Speaker 2: Also, the weird thing about energy drinks is I feel like, 54 00:02:28,639 --> 00:02:31,440 Speaker 2: you know, if you go into a seven eleven or 55 00:02:31,480 --> 00:02:34,400 Speaker 2: a odega or whatever, there are so many of that, 56 00:02:34,639 --> 00:02:36,880 Speaker 2: so many, and there seem to be new ones all 57 00:02:36,919 --> 00:02:39,440 Speaker 2: the time, and it's difficult to keep track, and yet 58 00:02:39,600 --> 00:02:42,880 Speaker 2: some of them really do have staying power. So we 59 00:02:42,960 --> 00:02:47,320 Speaker 2: did an episode previously about Monster that stock has been 60 00:02:47,440 --> 00:02:50,959 Speaker 2: absolutely phenomenal over the years. Red Bull is the other 61 00:02:51,080 --> 00:02:54,040 Speaker 2: classic one, And I don't know, it just feels like 62 00:02:54,280 --> 00:02:57,920 Speaker 2: it's such an interesting product in that there must be 63 00:02:58,080 --> 00:03:01,440 Speaker 2: insane amounts of competition, but if you can get it right, 64 00:03:01,760 --> 00:03:04,800 Speaker 2: it seems like it can be really really profitable. 65 00:03:04,360 --> 00:03:06,440 Speaker 1: Right, I mean, and in the end, like I mean 66 00:03:06,480 --> 00:03:09,200 Speaker 1: I know that you know, like supposedly, like it says 67 00:03:09,240 --> 00:03:11,680 Speaker 1: on the can of Celsius, it's fat burning. I'm like 68 00:03:11,760 --> 00:03:14,000 Speaker 1: skeptical of any of those claims, but you know whatever, 69 00:03:14,000 --> 00:03:16,360 Speaker 1: I'm not a scientist, but like they're all seem like 70 00:03:16,400 --> 00:03:19,639 Speaker 1: the same, right, which is a lot of caffeine and 71 00:03:19,680 --> 00:03:23,440 Speaker 1: then either some sugar or an artificial sweetener of various swords, 72 00:03:23,480 --> 00:03:25,799 Speaker 1: some different flavors. None of them are like that great. 73 00:03:25,840 --> 00:03:27,679 Speaker 2: You're not really drinking them for the taste. 74 00:03:27,440 --> 00:03:30,200 Speaker 1: Not really, but again, like they are kind of the same. 75 00:03:30,240 --> 00:03:32,400 Speaker 1: So why do people gravitate? Like why do some people 76 00:03:32,480 --> 00:03:35,400 Speaker 1: drink Celsius, who drink some monster who drinks some red us? 77 00:03:35,400 --> 00:03:39,200 Speaker 2: Who is drinking those Swedish fish flavored energy drinks? So 78 00:03:39,280 --> 00:03:40,040 Speaker 2: this is what I want to know. 79 00:03:40,200 --> 00:03:41,920 Speaker 1: So this gets to the other thing, which is that, 80 00:03:42,000 --> 00:03:44,080 Speaker 1: as you mentioned, if you go into any bodeg or something, 81 00:03:44,120 --> 00:03:47,000 Speaker 1: love it. There's so many different brands of energy drinks 82 00:03:47,040 --> 00:03:49,680 Speaker 1: these days, and some of them are like really weird, 83 00:03:49,720 --> 00:03:52,640 Speaker 1: Like there's Skittles flavored ones and I think an oreoslavored 84 00:03:52,680 --> 00:03:55,440 Speaker 1: one and a Swedish fish flavored one and ones in 85 00:03:55,680 --> 00:03:58,280 Speaker 1: clearly like a gamers, I don't. It's all very strange. 86 00:03:58,640 --> 00:04:00,920 Speaker 1: So how do you win? Why do some companies win? 87 00:04:01,000 --> 00:04:03,520 Speaker 1: And you know, you mentioned, you know, some of them 88 00:04:03,520 --> 00:04:06,760 Speaker 1: are just such big winners, like Monster as you mentioned, 89 00:04:07,400 --> 00:04:09,000 Speaker 1: you know, it's one of the best performing stocks of 90 00:04:09,040 --> 00:04:11,600 Speaker 1: all time. It's been better performed than Amazon over the year. 91 00:04:12,000 --> 00:04:15,000 Speaker 1: Celsia is obviously just incredible. So like, there's so much 92 00:04:15,040 --> 00:04:17,760 Speaker 1: money in the space for those companies that can get 93 00:04:17,760 --> 00:04:20,800 Speaker 1: it right between distribution, branding, and product, and so I 94 00:04:20,800 --> 00:04:22,880 Speaker 1: think the question is like, what does it take. Why 95 00:04:22,960 --> 00:04:24,719 Speaker 1: do some companies like catch fire? 96 00:04:25,000 --> 00:04:26,800 Speaker 2: Yes, I have many, many questions. 97 00:04:26,960 --> 00:04:29,760 Speaker 1: I have many questions. So in twenty twenty one, we 98 00:04:29,839 --> 00:04:33,520 Speaker 1: did an episode, as you mentioned, on the incredible performance 99 00:04:33,560 --> 00:04:37,160 Speaker 1: of Monster Beverage. Our guest then was Mark Astracan. He's 100 00:04:37,200 --> 00:04:39,880 Speaker 1: an analyst at Stepha Nicholas, and we have him back 101 00:04:40,240 --> 00:04:42,560 Speaker 1: two years later. Actually that was February twenty twenty one, 102 00:04:42,600 --> 00:04:44,880 Speaker 1: so about two and a half years later, and now 103 00:04:44,880 --> 00:04:48,520 Speaker 1: we are talking about a new energy drink winner in Celsius. 104 00:04:48,520 --> 00:04:50,960 Speaker 1: So Mark, thank you for coming back on odd Lots. 105 00:04:51,080 --> 00:04:53,400 Speaker 3: Yeah, thank you for having me. I think the last 106 00:04:53,400 --> 00:04:55,080 Speaker 3: time I was doing this, I was locked in my 107 00:04:55,400 --> 00:04:58,360 Speaker 3: yeah six year old son's bedroom doing this. It's nice 108 00:04:58,360 --> 00:04:59,320 Speaker 3: to be in person. 109 00:05:00,000 --> 00:05:03,200 Speaker 1: In person, all three of us you were drinking the sparkling. 110 00:05:03,320 --> 00:05:07,400 Speaker 1: It's apparently the top selling Celsius flavor. How do you 111 00:05:07,440 --> 00:05:09,320 Speaker 1: get to be the energy drink guy? 112 00:05:09,760 --> 00:05:14,279 Speaker 3: You show up? So I started covering Monsters, the only 113 00:05:14,440 --> 00:05:17,920 Speaker 3: publicly traded energy drink company, probably about oh gosh, seventeen 114 00:05:18,160 --> 00:05:20,960 Speaker 3: or so years ago. At the time, it was, hey, 115 00:05:21,160 --> 00:05:22,719 Speaker 3: this is a fad. When is it going to go away? 116 00:05:22,760 --> 00:05:26,720 Speaker 3: And why are you recommending this thing? And seventeen years later, 117 00:05:26,880 --> 00:05:29,680 Speaker 3: nobody's asking about the fad piece, just about the new 118 00:05:29,839 --> 00:05:31,640 Speaker 3: brands coming in. So it's sort of like I can't 119 00:05:31,640 --> 00:05:33,040 Speaker 3: get out of my own way at this point. People 120 00:05:33,080 --> 00:05:34,839 Speaker 3: want to talk about the space and it's sort of 121 00:05:34,960 --> 00:05:35,839 Speaker 3: ballooned around me. 122 00:05:36,320 --> 00:05:38,880 Speaker 2: How many energy drinks do you need to drink as 123 00:05:38,960 --> 00:05:39,760 Speaker 2: part of this job? 124 00:05:40,640 --> 00:05:41,560 Speaker 1: That's a good question. 125 00:05:42,320 --> 00:05:44,640 Speaker 3: On certain days you can drink a lot. On certain days, 126 00:05:44,760 --> 00:05:46,200 Speaker 3: you get home at like nine o'clock at night and 127 00:05:46,240 --> 00:05:48,440 Speaker 3: you wonder why your hands are still shaking. And you remember, right, 128 00:05:48,480 --> 00:05:50,080 Speaker 3: I had six or seven of these over the course 129 00:05:50,120 --> 00:05:52,640 Speaker 3: of the day, especially during earning season, during trips to 130 00:05:53,160 --> 00:05:55,680 Speaker 3: go see energy drink companies, to go to trade shows 131 00:05:55,880 --> 00:05:56,400 Speaker 3: and whatnot. 132 00:05:56,480 --> 00:05:59,080 Speaker 1: Yes, Oh, we're going to talk for like three hours 133 00:05:59,120 --> 00:06:01,600 Speaker 1: about this. We're going to go. No, But it's interesting, 134 00:06:01,640 --> 00:06:04,960 Speaker 1: you know. I remember so like right before I want 135 00:06:05,000 --> 00:06:07,159 Speaker 1: to get to like why are we drinking Celsius and 136 00:06:07,200 --> 00:06:09,600 Speaker 1: not others? But I but you know, right before the 137 00:06:09,640 --> 00:06:11,560 Speaker 1: recent Celsius earnings and I think they hit it out 138 00:06:11,560 --> 00:06:14,680 Speaker 1: of the park. I went to my local bodega because 139 00:06:14,680 --> 00:06:17,159 Speaker 1: I wanted to pick one up before going to the gym. 140 00:06:17,800 --> 00:06:19,720 Speaker 1: And I looked and I didn't see them. They were 141 00:06:19,720 --> 00:06:22,320 Speaker 1: like none on the refrigerator. I'm like, oh, what's going on. 142 00:06:22,600 --> 00:06:25,160 Speaker 1: It turned out the answer was literally the day before, 143 00:06:25,839 --> 00:06:28,600 Speaker 1: they got a whole new Celsius refrigerator and so they 144 00:06:28,640 --> 00:06:31,080 Speaker 1: had like the Celsius had been moved to their own 145 00:06:31,120 --> 00:06:33,800 Speaker 1: refrigerator within the bodega, and they had way more. I 146 00:06:33,839 --> 00:06:35,839 Speaker 1: just didn't see it at first. So that was like 147 00:06:35,880 --> 00:06:37,320 Speaker 1: assigned to me as like, oh man, they must be 148 00:06:37,360 --> 00:06:39,919 Speaker 1: like doing really well and they must be moving a 149 00:06:39,920 --> 00:06:41,760 Speaker 1: lot of product if like, you know, the celt there's 150 00:06:41,800 --> 00:06:46,040 Speaker 1: a special Celsius branded fridge. Though it is like when 151 00:06:46,080 --> 00:06:48,560 Speaker 1: you like do your work as an energy drink analyst, 152 00:06:48,839 --> 00:06:50,520 Speaker 1: is that what you're looking at you counting the number 153 00:06:50,520 --> 00:06:52,440 Speaker 1: of cans on the shelf, Like what is that into 154 00:06:52,480 --> 00:06:53,479 Speaker 1: the sort of the field work. 155 00:06:53,680 --> 00:06:55,720 Speaker 3: Probably back in the day you you could do that. 156 00:06:55,880 --> 00:06:57,919 Speaker 3: At this point, you're you're talking to folks who are 157 00:06:58,160 --> 00:07:00,440 Speaker 3: are putting into the product on the shelf, talking to 158 00:07:00,440 --> 00:07:02,520 Speaker 3: the distributors that are that are managing the folks that 159 00:07:02,600 --> 00:07:04,599 Speaker 3: are going into stores every day and resetting. And you 160 00:07:04,640 --> 00:07:07,360 Speaker 3: also have what we like to call scanner data, which 161 00:07:07,400 --> 00:07:10,280 Speaker 3: is basically data that we pay for that measures how 162 00:07:10,360 --> 00:07:12,920 Speaker 3: much product is purchased on a weekly or bi weekly 163 00:07:13,160 --> 00:07:14,800 Speaker 3: basis a sort of cheat and you get to see 164 00:07:14,840 --> 00:07:16,440 Speaker 3: the revenue, you get to see the volumes, and you 165 00:07:16,480 --> 00:07:20,000 Speaker 3: can slice and dice the data into grocery stores and 166 00:07:20,200 --> 00:07:22,320 Speaker 3: convenience stores and all sort of which ways and have 167 00:07:22,320 --> 00:07:23,320 Speaker 3: a whole lot of fun with it. 168 00:07:23,600 --> 00:07:26,360 Speaker 2: My favorite brand of analyst research is always when they 169 00:07:26,400 --> 00:07:29,200 Speaker 2: just send people outside to the stores, like they send 170 00:07:29,200 --> 00:07:31,840 Speaker 2: them all to the shopping mall to measure like retail 171 00:07:31,840 --> 00:07:34,880 Speaker 2: footfall and things like that. But Mark, why don't we 172 00:07:35,320 --> 00:07:37,880 Speaker 2: start sort of at the beginning and maybe go back 173 00:07:37,920 --> 00:07:42,560 Speaker 2: in time. Because Joe mentioned the Celsius stock chart, I'm 174 00:07:42,600 --> 00:07:45,000 Speaker 2: looking at it going back to I think two thousand 175 00:07:45,040 --> 00:07:48,800 Speaker 2: and seven. What is this company where they always making 176 00:07:48,840 --> 00:07:52,200 Speaker 2: these energy drinks? And because Celsius itself, I feel like 177 00:07:52,720 --> 00:07:55,960 Speaker 2: is fairly new, or at least I had only heard 178 00:07:56,000 --> 00:07:58,760 Speaker 2: about it relatively recently. What have they been doing for 179 00:07:58,840 --> 00:08:02,080 Speaker 2: the past, like more than a decade. 180 00:08:02,240 --> 00:08:06,000 Speaker 3: Well, essentially the same thing. It's just a question of 181 00:08:06,320 --> 00:08:10,440 Speaker 3: showing up and getting increasing brand awareness, people knowing the product, 182 00:08:10,440 --> 00:08:14,040 Speaker 3: and sort of trying it and trying it again. I 183 00:08:14,080 --> 00:08:16,720 Speaker 3: like to call it a ten or fifteen year overnight success, 184 00:08:16,760 --> 00:08:18,840 Speaker 3: and that the product has always essentially been the same. 185 00:08:18,880 --> 00:08:21,000 Speaker 3: You have a lot more iterations of it today, but 186 00:08:21,080 --> 00:08:23,960 Speaker 3: essentially it's the same product. And they had struggles for 187 00:08:24,000 --> 00:08:25,800 Speaker 3: a while in terms of getting the product on shelf, 188 00:08:25,800 --> 00:08:27,520 Speaker 3: getting people to understand what it was or why they 189 00:08:27,560 --> 00:08:29,960 Speaker 3: wanted to drink it, and then it's sort of blossomed 190 00:08:29,960 --> 00:08:32,600 Speaker 3: as you had more product on shelf. You know. The joke, 191 00:08:32,640 --> 00:08:34,680 Speaker 3: of course, is like eighty ninety percent of success is 192 00:08:34,679 --> 00:08:36,040 Speaker 3: showing up, and then once you get there, you have 193 00:08:36,080 --> 00:08:38,520 Speaker 3: to figure out how to keep people coming back, in 194 00:08:38,559 --> 00:08:41,839 Speaker 3: this case, consuming the product. And so I think that's 195 00:08:41,880 --> 00:08:44,200 Speaker 3: an interesting sort of story in and of itself, in 196 00:08:44,240 --> 00:08:47,040 Speaker 3: that you have to understand how to get on shelf, 197 00:08:47,120 --> 00:08:50,079 Speaker 3: or understand why these products get on shelf, because that's 198 00:08:50,120 --> 00:08:53,400 Speaker 3: really what drives a lot of the opportunity to be successful. 199 00:08:53,440 --> 00:08:56,880 Speaker 3: So as you can imagine, it starts with money. And 200 00:08:56,920 --> 00:09:00,400 Speaker 3: so you have a bunch of beer and the legacy 201 00:09:00,440 --> 00:09:04,199 Speaker 3: soft drink distributor selling the stuff, and they're always on 202 00:09:04,240 --> 00:09:06,959 Speaker 3: the lookout for the newest and latest and greatest products 203 00:09:07,040 --> 00:09:10,599 Speaker 3: to increase consumption of stuff on their trucks. Right, you 204 00:09:10,679 --> 00:09:12,920 Speaker 3: think about a beer or soft drink distributor, You've had 205 00:09:12,920 --> 00:09:15,199 Speaker 3: a truck, You've got stuff on shelf, and so if 206 00:09:15,200 --> 00:09:17,720 Speaker 3: it's selling well, great. If it's not selling well, you're 207 00:09:17,720 --> 00:09:19,319 Speaker 3: trying to figure out what you can put on the shelf. 208 00:09:19,360 --> 00:09:22,319 Speaker 3: And so from a volume standpoint, you think about beer distributors, 209 00:09:22,640 --> 00:09:24,600 Speaker 3: and volumes have been declining for a long time, and 210 00:09:24,640 --> 00:09:27,720 Speaker 3: so they're always looking for things, especially outside of alcohol, 211 00:09:27,800 --> 00:09:30,640 Speaker 3: to put on those trucks that ultimately sell. And so 212 00:09:30,679 --> 00:09:33,440 Speaker 3: if you go back fifteen years ago, Monster, which was 213 00:09:33,480 --> 00:09:35,640 Speaker 3: the up and comer at the time, goes and does 214 00:09:35,640 --> 00:09:38,200 Speaker 3: a deal with Anheuser Bush. A few years later, Coke 215 00:09:38,240 --> 00:09:39,960 Speaker 3: gets a little bit jealous and says, man, this is 216 00:09:40,000 --> 00:09:41,760 Speaker 3: doing really well. They strike a deal, so you have 217 00:09:41,880 --> 00:09:44,679 Speaker 3: fifty percent of Monster's business in the late two thousands 218 00:09:44,720 --> 00:09:47,600 Speaker 3: going through Monster or going through antzer Bush, fifty percent 219 00:09:47,679 --> 00:09:51,840 Speaker 3: going through Coke. Twenty fourteen, Monster and Coke announce a 220 00:09:51,840 --> 00:09:54,640 Speaker 3: big asset swap, including Coke taking what's now a twenty 221 00:09:54,640 --> 00:09:57,720 Speaker 3: percent steak in Monster. As part of the deal, Monster 222 00:09:58,400 --> 00:10:01,040 Speaker 3: has to put all of its distribution into the Coke system, 223 00:10:01,080 --> 00:10:03,400 Speaker 3: so you leave fifty percent of the enheuzer Bush network 224 00:10:03,840 --> 00:10:08,120 Speaker 3: high and dry. They're looking for products to replace our 225 00:10:08,160 --> 00:10:10,200 Speaker 3: math is like a billion dollars of profit at that 226 00:10:10,280 --> 00:10:13,360 Speaker 3: point that the beer distributors lost when Monster decided to 227 00:10:13,360 --> 00:10:15,560 Speaker 3: go to the coke system. So we're talking lots and 228 00:10:15,600 --> 00:10:18,040 Speaker 3: lots of money. We're also just talking about trucks to 229 00:10:18,080 --> 00:10:19,480 Speaker 3: go to the same store at the same time of 230 00:10:19,559 --> 00:10:21,760 Speaker 3: day every day with the same driver. You already paid 231 00:10:21,760 --> 00:10:23,360 Speaker 3: for the truck, and so you're trying to figure out 232 00:10:23,360 --> 00:10:26,160 Speaker 3: a product that you can put on there to make money. 233 00:10:26,320 --> 00:10:28,680 Speaker 3: So those distributors went out and found a brand called 234 00:10:28,679 --> 00:10:30,160 Speaker 3: Bang that was. 235 00:10:30,280 --> 00:10:31,960 Speaker 1: I've had some of that. It's not bad. It's like 236 00:10:32,000 --> 00:10:33,959 Speaker 1: their flavors is like they have their a little more 237 00:10:33,960 --> 00:10:36,600 Speaker 1: candy flavored, like bubblegum flavored, and it's a little I 238 00:10:36,640 --> 00:10:38,720 Speaker 1: go back and forth, but anyway, keep going. 239 00:10:39,160 --> 00:10:41,959 Speaker 3: Yeah, So Bang replaces Monster in a lot of those 240 00:10:42,000 --> 00:10:44,760 Speaker 3: nhezerd Bush houses. They do it across the country. They 241 00:10:44,760 --> 00:10:46,880 Speaker 3: move from the fifty percent to one hundred percent distribution. 242 00:10:47,040 --> 00:10:50,480 Speaker 3: By late twenty seventeen twenty eighteen, the product is just 243 00:10:50,600 --> 00:10:54,280 Speaker 3: flying off shelves hundreds and hundreds of percent growth. The 244 00:10:54,320 --> 00:10:56,880 Speaker 3: brand goes from a nothing sort of like where Celsius 245 00:10:57,000 --> 00:10:59,240 Speaker 3: was ten fifteen years ago, to be four or five 246 00:10:59,320 --> 00:11:01,320 Speaker 3: market share and arts to get the attention of Monster 247 00:11:01,360 --> 00:11:04,240 Speaker 3: and a whole bunch of these other companies. By twenty nineteen, 248 00:11:04,320 --> 00:11:07,440 Speaker 3: run rate revenues were probably approaching a billion dollars at retail. 249 00:11:07,559 --> 00:11:09,960 Speaker 3: It's got something in the high single digits of market share. 250 00:11:10,280 --> 00:11:13,760 Speaker 3: Like a lot of brands, you look for the better, 251 00:11:14,040 --> 00:11:17,560 Speaker 3: the better distribution. And so by early twenty twenty, Pepsi 252 00:11:17,600 --> 00:11:20,440 Speaker 3: decides to go out and buy a brand that they 253 00:11:20,480 --> 00:11:22,760 Speaker 3: had long time distributed called Rockstar, because Rockstar had an 254 00:11:22,800 --> 00:11:25,160 Speaker 3: exclusive relationship with Pepsi that didn't allow Pepsi to sell 255 00:11:25,200 --> 00:11:28,280 Speaker 3: any other energy drink brands. And once they bought rock Star, 256 00:11:28,480 --> 00:11:31,280 Speaker 3: they allowed themselves to go out and do more distribution deals, 257 00:11:31,280 --> 00:11:34,800 Speaker 3: including going after Bang. So early twenty twenty, Bang moves 258 00:11:34,840 --> 00:11:37,680 Speaker 3: over to the Pepsi system. The Anheuser Bush distributors who've 259 00:11:37,720 --> 00:11:39,440 Speaker 3: been selling Bang and making lots of money doing it, 260 00:11:39,480 --> 00:11:41,840 Speaker 3: are like, uh, oh, now what And they go out 261 00:11:41,880 --> 00:11:45,120 Speaker 3: and they find this brand Celsius, and they put it 262 00:11:45,160 --> 00:11:47,000 Speaker 3: on trucks, and essentially at that point it's kind of 263 00:11:47,080 --> 00:11:49,240 Speaker 3: muscle memory to put the product on the same space 264 00:11:49,280 --> 00:11:52,000 Speaker 3: that Bang was losing to go over to the Pepsi system, 265 00:11:52,520 --> 00:11:55,080 Speaker 3: and all of a sudden, Celsius is everywhere and obviously 266 00:11:56,280 --> 00:11:58,040 Speaker 3: get on shelf. As I said, eighty ninety percent of 267 00:11:58,040 --> 00:11:59,800 Speaker 3: successes getting there, and then once you get there, you've 268 00:11:59,800 --> 00:12:00,880 Speaker 3: got to keep it. 269 00:12:17,120 --> 00:12:19,400 Speaker 2: So Monster kind of shot itself in the foot with 270 00:12:19,480 --> 00:12:21,280 Speaker 2: the coke deal. It sounds like, or at least they 271 00:12:21,320 --> 00:12:24,080 Speaker 2: made a hole for a potential competitor to come in 272 00:12:24,120 --> 00:12:24,520 Speaker 2: and fill. 273 00:12:24,920 --> 00:12:28,240 Speaker 3: Well they didn't. They didn't. Monster stocks probably up four 274 00:12:28,280 --> 00:12:31,160 Speaker 3: or five x. This is true from from twenty fourteen 275 00:12:31,160 --> 00:12:36,600 Speaker 3: twenty fifteen. Monster got great distribution through coke domestically. But 276 00:12:36,679 --> 00:12:39,599 Speaker 3: what they more goot was. 277 00:12:39,440 --> 00:12:43,439 Speaker 2: Joe's had so much energy just knocked over my. 278 00:12:43,480 --> 00:12:45,400 Speaker 1: Can on my keyboard. I was worried I was going 279 00:12:45,400 --> 00:12:48,000 Speaker 1: to do that. Well, okay, keep going. 280 00:12:48,720 --> 00:12:52,600 Speaker 2: They really work. We're like literally buzzing in the studio. 281 00:12:52,679 --> 00:12:55,439 Speaker 3: I keep going, keep going. So yeah, Monster also got 282 00:12:55,480 --> 00:12:58,600 Speaker 3: it big international distribution through Coke. You know, Coke is 283 00:12:59,240 --> 00:13:02,480 Speaker 3: one of the biggest, not the biggest, and best distributed 284 00:13:02,920 --> 00:13:05,720 Speaker 3: brands around the world, and they have their distribution system. 285 00:13:05,800 --> 00:13:09,600 Speaker 3: So Monster got a great, great distribution from Coke. But yes, 286 00:13:09,679 --> 00:13:13,000 Speaker 3: they also gave up their slots with others and sort 287 00:13:13,040 --> 00:13:15,160 Speaker 3: of created opportunities for other brands to come in. But 288 00:13:15,200 --> 00:13:17,559 Speaker 3: I also think, and we'll probably touch on this, Yeah, 289 00:13:17,600 --> 00:13:21,040 Speaker 3: there's an evolving consumer taste going on here as well. Right, 290 00:13:21,080 --> 00:13:23,079 Speaker 3: so it's not just hey, I want to drink this Celsius. 291 00:13:23,080 --> 00:13:25,800 Speaker 3: There's a reason behind it, or why Ghost or See 292 00:13:25,800 --> 00:13:28,800 Speaker 3: four or Alanni New or all these other upstart brands 293 00:13:29,040 --> 00:13:30,679 Speaker 3: have done what they've been able to do. 294 00:13:31,320 --> 00:13:33,360 Speaker 2: I definitely want to get into that. But before we do, 295 00:13:33,520 --> 00:13:38,079 Speaker 2: I have a sort of like distribution versus customer preference question. 296 00:13:38,360 --> 00:13:41,800 Speaker 2: And I actually don't drink a lot of energy drinks 297 00:13:41,800 --> 00:13:43,520 Speaker 2: on a normal basis, but I do drink a lot 298 00:13:43,520 --> 00:13:47,079 Speaker 2: of diet coke and things like that, and my local 299 00:13:47,480 --> 00:13:51,440 Speaker 2: cvs they are constantly running out of. Actually the irony 300 00:13:51,559 --> 00:13:54,960 Speaker 2: is I mostly drink caffeine free diet coke, and they're 301 00:13:55,000 --> 00:13:57,679 Speaker 2: constantly running out of it, Like it is a certainty 302 00:13:57,880 --> 00:14:00,720 Speaker 2: that every week they will run out of cafe free coke, 303 00:14:01,040 --> 00:14:04,680 Speaker 2: but they will have hundreds of bottles of vanilla flavored 304 00:14:04,720 --> 00:14:07,600 Speaker 2: coke and god knows what else. And my question is, like, 305 00:14:07,640 --> 00:14:10,760 Speaker 2: it is clear that consumers are expressing a preference here 306 00:14:10,840 --> 00:14:13,120 Speaker 2: by buying the stuff they like and leaving the stuff 307 00:14:13,160 --> 00:14:16,200 Speaker 2: that they don't, And yet the shelves seem consistently filled 308 00:14:16,200 --> 00:14:18,960 Speaker 2: with it feels like things that the brands are trying 309 00:14:19,000 --> 00:14:22,800 Speaker 2: to push. So how how do the decisions about what 310 00:14:22,960 --> 00:14:26,040 Speaker 2: to stalk and distribute actually get made? 311 00:14:27,040 --> 00:14:28,680 Speaker 3: Well, I guess in theory it should get made on 312 00:14:28,880 --> 00:14:31,520 Speaker 3: analytics and what people are consuming, and so going through 313 00:14:31,520 --> 00:14:33,920 Speaker 3: the data that I alluded to before and what people 314 00:14:34,000 --> 00:14:37,360 Speaker 3: are purchasing, I mean, essentially that's what drives the decision. 315 00:14:37,400 --> 00:14:39,680 Speaker 3: I think your caffeine free diet Coke is probably one 316 00:14:39,680 --> 00:14:42,560 Speaker 3: of those brands that that maybe a little smaller today 317 00:14:42,560 --> 00:14:44,200 Speaker 3: than it was ten or fifteen years ago. 318 00:14:44,040 --> 00:14:46,880 Speaker 2: And no cares about my prize. You know. 319 00:14:46,880 --> 00:14:48,840 Speaker 3: It's sort of like there was an old Simpsons episode 320 00:14:48,840 --> 00:14:51,800 Speaker 3: when I think somebody bought al Gore's book and like 321 00:14:51,920 --> 00:14:54,600 Speaker 3: all of these like Mechanaians in it like back to 322 00:14:54,680 --> 00:14:56,080 Speaker 3: him and all of a sudden like he you know, 323 00:14:56,720 --> 00:14:58,520 Speaker 3: somebody bought the book and he put on a record 324 00:14:58,560 --> 00:14:59,840 Speaker 3: and said, celebrate good times. 325 00:14:59,840 --> 00:15:03,520 Speaker 1: You know, I remember this episode. I remember that. 326 00:15:04,160 --> 00:15:04,320 Speaker 2: You know. 327 00:15:04,360 --> 00:15:06,880 Speaker 1: I'm sort of thinking there's like that like Domino meme. 328 00:15:07,000 --> 00:15:10,080 Speaker 1: It's like monster signs to deal with cocaine. Then like 329 00:15:10,400 --> 00:15:12,680 Speaker 1: one distributor has a hole to fill, and then the 330 00:15:12,760 --> 00:15:14,800 Speaker 1: next distributor then has a hole to fill, and so 331 00:15:15,040 --> 00:15:18,080 Speaker 1: like there's big game of musical chairs and suddenly we're 332 00:15:18,160 --> 00:15:22,280 Speaker 1: drinking celsius. So my one of my questions is if 333 00:15:22,280 --> 00:15:25,480 Speaker 1: you look at some of these big distributors, like a 334 00:15:25,520 --> 00:15:28,800 Speaker 1: Pepsi or an Anheuser Bush, that is sort of senses Okay, 335 00:15:29,280 --> 00:15:32,240 Speaker 1: beer consumption is down. We need something to fill this 336 00:15:32,320 --> 00:15:36,080 Speaker 1: gap because we just lost this client or partner to 337 00:15:36,120 --> 00:15:39,120 Speaker 1: another distributor, et cetera. What is the process by which 338 00:15:39,160 --> 00:15:41,960 Speaker 1: they go out and find the next one? Is it 339 00:15:42,000 --> 00:15:44,920 Speaker 1: a sort of mutual bidding thing where like the small 340 00:15:45,040 --> 00:15:48,000 Speaker 1: upstart energy drink companies like try to fill that spot, 341 00:15:48,400 --> 00:15:51,280 Speaker 1: Like how does how does that process work? Do they 342 00:15:51,280 --> 00:15:53,880 Speaker 1: look for like a brand that seems to have something 343 00:15:54,000 --> 00:15:55,800 Speaker 1: like talk to us about where that how that works. 344 00:15:56,000 --> 00:15:58,120 Speaker 3: I think it's it's all of the above, okay, And 345 00:15:58,120 --> 00:16:00,680 Speaker 3: I don't think there's any special secrets here. I think 346 00:16:00,680 --> 00:16:02,880 Speaker 3: you can kind of arrive at the same answer in 347 00:16:02,880 --> 00:16:05,280 Speaker 3: a lot of different ways. Remember, you have all these 348 00:16:05,360 --> 00:16:07,160 Speaker 3: these companies that are going in and out of stores 349 00:16:07,280 --> 00:16:09,920 Speaker 3: all the time that they're talking to distributors, talking to companies, 350 00:16:09,960 --> 00:16:11,320 Speaker 3: and so they have some idea of what's selling and 351 00:16:11,360 --> 00:16:13,280 Speaker 3: what's not selling. They have some idea of where consumer 352 00:16:13,280 --> 00:16:16,200 Speaker 3: tastes are evolving to, and so some of it is 353 00:16:16,280 --> 00:16:18,560 Speaker 3: you're just trying to find the next big thing, even 354 00:16:18,600 --> 00:16:21,800 Speaker 3: though there are various examples where you've tried and failed 355 00:16:21,840 --> 00:16:23,440 Speaker 3: and you've moved on to the next thing. And so 356 00:16:24,080 --> 00:16:25,840 Speaker 3: from their standpoint, you can put a whole bunch of 357 00:16:25,840 --> 00:16:28,240 Speaker 3: stuff on the truck, and what works you stick, and 358 00:16:28,680 --> 00:16:30,480 Speaker 3: the rest you kind of move on with. And I 359 00:16:30,480 --> 00:16:32,080 Speaker 3: think there's a lot of examples of that. I think 360 00:16:32,080 --> 00:16:35,040 Speaker 3: people talk about the big winners over time and forget 361 00:16:35,040 --> 00:16:37,320 Speaker 3: some of the smaller brands at the same time that 362 00:16:37,360 --> 00:16:39,640 Speaker 3: have tried and fail. I mean, gosh, remember the Jolt 363 00:16:39,680 --> 00:16:42,320 Speaker 3: brand in the eighties, right that that was an energy 364 00:16:42,360 --> 00:16:45,680 Speaker 3: drink before it's time, and yet it never really took 365 00:16:45,720 --> 00:16:46,920 Speaker 3: off just to drink serge. 366 00:16:47,160 --> 00:16:48,800 Speaker 1: When I was in high school, it was another one 367 00:16:48,800 --> 00:16:50,680 Speaker 1: that we used to we used to get I mean 368 00:16:50,720 --> 00:16:53,880 Speaker 1: obviously like a distribution and just sort of the pure 369 00:16:53,960 --> 00:16:57,080 Speaker 1: muscle of the trucks and everything, and shelf space is important, 370 00:16:57,520 --> 00:17:00,800 Speaker 1: But like what about like the role of and so 371 00:17:00,920 --> 00:17:03,800 Speaker 1: you know, Celsius seems to have like an athletic like 372 00:17:03,840 --> 00:17:06,600 Speaker 1: I mentioned, like I saw the people of my gym drinking. 373 00:17:06,720 --> 00:17:08,960 Speaker 1: They're like, oh, what's that? And like it seems like 374 00:17:08,960 --> 00:17:11,800 Speaker 1: they've like sort of like branded themselves as like kind 375 00:17:11,840 --> 00:17:13,600 Speaker 1: of the one for like athletes, and they have this 376 00:17:13,680 --> 00:17:16,159 Speaker 1: like fat burning plane, which, like I said, I'm skeptical of. 377 00:17:16,520 --> 00:17:19,600 Speaker 1: But like how significant is that is that in terms 378 00:17:19,600 --> 00:17:22,240 Speaker 1: of the staying power for these companies? 379 00:17:22,280 --> 00:17:25,320 Speaker 2: Olnnie Knew is supposed to have vitamins as well, right. 380 00:17:25,080 --> 00:17:28,320 Speaker 3: They all have vitamins. Oh really, Monster. 381 00:17:28,600 --> 00:17:30,439 Speaker 2: Vitro Monster has vitamins. 382 00:17:30,480 --> 00:17:33,040 Speaker 3: Of course, you can get your B twelve fixed anytime 383 00:17:33,040 --> 00:17:33,360 Speaker 3: you want. 384 00:17:34,520 --> 00:17:36,119 Speaker 2: No more flintstones vitamins for. 385 00:17:36,200 --> 00:17:41,080 Speaker 3: Me, something like that. I think it's it's it's it 386 00:17:41,160 --> 00:17:44,200 Speaker 3: evolves into a question of who's drinking. This in brand positioning, 387 00:17:44,240 --> 00:17:47,359 Speaker 3: right if you go back fifteen twenty years ago and 388 00:17:47,400 --> 00:17:51,000 Speaker 3: maybe even longer, Red Bull created this category in most 389 00:17:51,040 --> 00:17:53,280 Speaker 3: of the world, but it evolved into a product that 390 00:17:53,400 --> 00:17:56,080 Speaker 3: was consumed or still is consumed by eighteen to thirty 391 00:17:56,080 --> 00:18:00,440 Speaker 3: five year old, largely white collar males, more can assumed 392 00:18:00,520 --> 00:18:03,320 Speaker 3: on premise than any other brand, meaning bars and restaurants. 393 00:18:04,320 --> 00:18:08,560 Speaker 3: Monster decided that they wanted to go after a different clientele. 394 00:18:08,680 --> 00:18:12,119 Speaker 3: They offered a sixteen ounce can. They geared it on 395 00:18:12,200 --> 00:18:17,879 Speaker 3: a more value oriented proposition, selling essentially twice the volume 396 00:18:17,920 --> 00:18:20,600 Speaker 3: for the same price as Red Bull. It evolved into 397 00:18:20,640 --> 00:18:24,280 Speaker 3: more of a blue collar construction workers sort of not 398 00:18:24,560 --> 00:18:28,439 Speaker 3: on premise, not bar and restaurant business that was still 399 00:18:28,600 --> 00:18:32,520 Speaker 3: is the core consumer of Monster today. Rockstar was a 400 00:18:32,560 --> 00:18:34,960 Speaker 3: brand around fifteen twenty years ago that did kind of 401 00:18:35,000 --> 00:18:37,560 Speaker 3: the same thing, sort of positioned itself as a little 402 00:18:37,600 --> 00:18:40,960 Speaker 3: bit more value priced as it evolved over time, and 403 00:18:41,000 --> 00:18:43,240 Speaker 3: then really the category didn't do a whole lot. You 404 00:18:43,280 --> 00:18:45,320 Speaker 3: had five Hour Energy if you remember that. That came 405 00:18:45,359 --> 00:18:49,520 Speaker 3: in maybe late two thousands, early twenty tens and was 406 00:18:49,560 --> 00:18:52,480 Speaker 3: offering obviously a shot so in a really concentrated form 407 00:18:52,520 --> 00:18:55,320 Speaker 3: of caffeine. But you had a period there that nothing 408 00:18:55,320 --> 00:18:58,959 Speaker 3: else was really changing until Really Bang came along and 409 00:18:59,000 --> 00:19:02,680 Speaker 3: sort of positioned is more of a performance gym oriented brand, 410 00:19:02,680 --> 00:19:04,679 Speaker 3: as Joe is talking about. And I think you had 411 00:19:04,720 --> 00:19:07,320 Speaker 3: a whole lot of other brands and people that saw 412 00:19:07,320 --> 00:19:09,200 Speaker 3: the success of this and tried to figure out how 413 00:19:09,200 --> 00:19:11,719 Speaker 3: they could participate in this category. Because remember, it all 414 00:19:11,720 --> 00:19:13,159 Speaker 3: goes back to the money. It all goes back to 415 00:19:13,200 --> 00:19:16,720 Speaker 3: the category's importance to the store selling this stuff. Volumetrically, 416 00:19:16,760 --> 00:19:19,199 Speaker 3: a lot of beverage categories are declining. Energy as a 417 00:19:19,240 --> 00:19:23,159 Speaker 3: category continues to grow because the selling prices is higher. 418 00:19:23,200 --> 00:19:25,200 Speaker 3: You make more money selling an energy drink. It becomes 419 00:19:25,240 --> 00:19:27,560 Speaker 3: a bit of a self fulfilling prophecy here, so you 420 00:19:27,600 --> 00:19:30,000 Speaker 3: want to put more stuff on shelf. I mean, interestingly too, 421 00:19:30,320 --> 00:19:32,159 Speaker 3: it continues to evolve. I was looking at this the 422 00:19:32,200 --> 00:19:35,520 Speaker 3: other day. Yeah, total distribution points for energy drinks are 423 00:19:35,600 --> 00:19:38,600 Speaker 3: up over forty percent over the last three years in stores. 424 00:19:38,800 --> 00:19:41,160 Speaker 3: There aren't many or any other categories that you could 425 00:19:41,160 --> 00:19:43,520 Speaker 3: say that about in beverages that have seen shelf space increase. 426 00:19:43,560 --> 00:19:45,320 Speaker 3: I mean seltzers and things like that, which are now 427 00:19:45,359 --> 00:19:46,960 Speaker 3: on the decline. And so what kind of. 428 00:19:46,880 --> 00:19:50,040 Speaker 2: Like stores are they going into. Where's the expansion coming from. 429 00:19:50,119 --> 00:19:53,439 Speaker 3: It's coming from everywhere. But the bread and butter is 430 00:19:53,440 --> 00:19:56,440 Speaker 3: convenience stores. Seventy percent of energy drink sales are largely 431 00:19:56,480 --> 00:19:59,680 Speaker 3: sold inconvenience stories in a seven to eleven speedway, places 432 00:19:59,720 --> 00:20:02,280 Speaker 3: like that. And so back to what I was saying, 433 00:20:02,400 --> 00:20:06,640 Speaker 3: you have these just different propositions, So Celsius, I mean, uniquely, 434 00:20:06,680 --> 00:20:09,360 Speaker 3: it's very interesting. Is a little bit more older male 435 00:20:09,440 --> 00:20:12,600 Speaker 3: and female. It's a little bit younger female, which is 436 00:20:13,080 --> 00:20:16,800 Speaker 3: very different than the Monster in Red Bull consumers Alan, 437 00:20:16,880 --> 00:20:20,280 Speaker 3: you knew you talked about more older female C four 438 00:20:20,520 --> 00:20:24,399 Speaker 3: Ghost or a younger, more performance and lifestyle brand folks 439 00:20:24,640 --> 00:20:27,760 Speaker 3: going after the gym. And so each of these has 440 00:20:27,880 --> 00:20:29,439 Speaker 3: sort of found a niche. Yes, you know, if you 441 00:20:29,440 --> 00:20:32,160 Speaker 3: look at the ven diagram, there's probably overlapped somewhere in there, 442 00:20:32,240 --> 00:20:34,040 Speaker 3: but they've kind of found their niche. And what's really 443 00:20:34,040 --> 00:20:38,600 Speaker 3: fascinating is that the whole category continues to grow, and 444 00:20:38,680 --> 00:20:41,520 Speaker 3: so Monster continues to grow, Red Bull continues to grow. 445 00:20:41,560 --> 00:20:43,400 Speaker 3: Sure they're losing a little bit of share around the edges, 446 00:20:43,440 --> 00:20:46,199 Speaker 3: but the category. Who would have thought fifteen twenty years ago, 447 00:20:46,240 --> 00:20:48,399 Speaker 3: and I started covering the energy duringk category. Here we 448 00:20:48,440 --> 00:20:50,119 Speaker 3: are in twenty twenty three, and the category is going 449 00:20:50,160 --> 00:20:52,840 Speaker 3: to be growing fifteen percent on a dollar basis. In 450 00:20:52,880 --> 00:20:55,240 Speaker 3: twenty three it was up ten percent, and twenty two 451 00:20:55,320 --> 00:20:57,679 Speaker 3: fifteen percent twenty one. I mean, these are remarkably big 452 00:20:57,760 --> 00:21:00,840 Speaker 3: numbers for a category now that it retail is probably 453 00:21:00,880 --> 00:21:03,320 Speaker 3: approaching eleven or even twelve billion dollars. 454 00:21:03,640 --> 00:21:07,600 Speaker 1: By the way, Tracy and Carmen, actually I shot my keyboard. 455 00:21:07,680 --> 00:21:10,160 Speaker 1: You can keep this in, but my keyboard is ruined 456 00:21:10,160 --> 00:21:12,080 Speaker 1: because of the celiciats, and so I can't type two 457 00:21:12,240 --> 00:21:16,280 Speaker 1: right now, casual, So while we've recorded this, I have 458 00:21:16,400 --> 00:21:18,560 Speaker 1: ruined the keyboard. My computer is unusable. 459 00:21:18,760 --> 00:21:21,119 Speaker 3: Anyway, go for it, Okay. 460 00:21:21,119 --> 00:21:26,600 Speaker 2: I have two quick questions. Okay, First, are energy drinks 461 00:21:26,680 --> 00:21:31,400 Speaker 2: taking share from more traditional soft drinks? Have we seen any. 462 00:21:31,200 --> 00:21:32,480 Speaker 3: Evidence of that for certain? 463 00:21:32,600 --> 00:21:35,439 Speaker 2: Okay? What's driving that is that, just like preference, people 464 00:21:35,520 --> 00:21:39,920 Speaker 2: want less sugar or no, we're all more tired and 465 00:21:40,040 --> 00:21:41,120 Speaker 2: need morecaine drinks. 466 00:21:41,160 --> 00:21:43,560 Speaker 3: I think it so it actually starts with that. I 467 00:21:43,600 --> 00:21:47,280 Speaker 3: think it's funny you ask consumers about what they want 468 00:21:47,320 --> 00:21:49,360 Speaker 3: to drink or eat and they'll tell you, Oh, it's 469 00:21:49,359 --> 00:21:53,120 Speaker 3: all about healthy food and drank cleaner label. And yet 470 00:21:53,160 --> 00:21:54,880 Speaker 3: what I just told you about the growth of energy 471 00:21:54,960 --> 00:21:58,080 Speaker 3: drinks would be the almost exact opposite of that, and 472 00:21:58,160 --> 00:22:01,720 Speaker 3: that the list of ingredients is that. And I don't 473 00:22:01,760 --> 00:22:03,639 Speaker 3: think anybody is claiming these are good for you. But 474 00:22:03,680 --> 00:22:08,119 Speaker 3: what they do is provide a function. And so Joe's 475 00:22:08,119 --> 00:22:10,400 Speaker 3: comments at the beginning of this notwithstanding right, people are 476 00:22:10,400 --> 00:22:12,879 Speaker 3: in fact sleeping last They are looking for more energy, 477 00:22:12,880 --> 00:22:15,160 Speaker 3: They want to do more with their day, and these 478 00:22:15,240 --> 00:22:18,639 Speaker 3: provide caffeine. And sure it's the same as basically a 479 00:22:18,640 --> 00:22:21,000 Speaker 3: coffee in a lot of instances in terms of caffeine, 480 00:22:21,160 --> 00:22:24,320 Speaker 3: but it's a different delivery mechanism. You think about younger consumers, 481 00:22:24,359 --> 00:22:26,320 Speaker 3: maybe they don't want to drink coffee. Maybe it's hot outside, 482 00:22:26,320 --> 00:22:27,840 Speaker 3: you don't want a coffee, Maybe you don't want a latte. 483 00:22:27,920 --> 00:22:31,000 Speaker 3: And by the way, the value proposition here also helps 484 00:22:31,080 --> 00:22:33,280 Speaker 3: think about the price of a coffee at Starbucks today 485 00:22:33,320 --> 00:22:35,200 Speaker 3: versus what it was ten years ago. It's probably double 486 00:22:35,200 --> 00:22:37,919 Speaker 3: where it was. Go in and drink your fancy latte 487 00:22:37,960 --> 00:22:39,920 Speaker 3: and it's probably six seven dollars before you get out 488 00:22:39,960 --> 00:22:42,480 Speaker 3: the door. Energy drink prices have gone up, like a 489 00:22:42,480 --> 00:22:44,280 Speaker 3: lot of other categories, but you can still get a 490 00:22:44,320 --> 00:22:47,040 Speaker 3: Monster for under three dollars. You can get a Celsius 491 00:22:47,040 --> 00:22:48,679 Speaker 3: for under three dollars if you get it on promotion, 492 00:22:48,720 --> 00:22:50,120 Speaker 3: which is how a lot of people buy this. It's 493 00:22:50,119 --> 00:22:53,399 Speaker 3: two for five, fifty, two for six, three for seven, 494 00:22:53,520 --> 00:22:56,200 Speaker 3: whatever the promotion is. And so the value proposition here 495 00:22:56,320 --> 00:22:59,560 Speaker 3: is also greater. And it just has a different taste 496 00:22:59,640 --> 00:23:02,400 Speaker 3: and starts with the function, moves to the taste, and 497 00:23:02,680 --> 00:23:04,359 Speaker 3: you do a good job of innovating. I think one 498 00:23:04,400 --> 00:23:06,600 Speaker 3: of the things too, we talked about this on previous podcasts, 499 00:23:06,880 --> 00:23:09,720 Speaker 3: which is Monster has really expanded usage occasions. You know, 500 00:23:09,760 --> 00:23:11,960 Speaker 3: who would have thought putting coffee and energy drink together 501 00:23:12,000 --> 00:23:14,399 Speaker 3: would have made sense? And that's a billion dollar category today. 502 00:23:14,480 --> 00:23:18,639 Speaker 3: Juice is teas zero sugar, full sugar. Yeah, there's just 503 00:23:18,680 --> 00:23:20,920 Speaker 3: a whole bunch of different offerings out there for folks. 504 00:23:20,960 --> 00:23:23,719 Speaker 3: You talked about the candy products there, there's flavors out 505 00:23:23,760 --> 00:23:25,200 Speaker 3: there that have partnerships with some of these. 506 00:23:25,240 --> 00:23:26,359 Speaker 1: Well, we got to get into that. 507 00:23:26,520 --> 00:23:28,399 Speaker 2: This was going to be my next question, although I 508 00:23:28,440 --> 00:23:30,760 Speaker 2: have to say I have a really great product idea now, 509 00:23:30,800 --> 00:23:32,520 Speaker 2: which is pumpkin spice Celsius. 510 00:23:32,760 --> 00:23:34,600 Speaker 1: Oh yeah, don't you think, Yeah. 511 00:23:34,320 --> 00:23:37,240 Speaker 2: For fall, we could be millionaires. Joe, we'll pitch it. 512 00:23:37,359 --> 00:23:39,160 Speaker 3: You should tell the marketing folks that I can put 513 00:23:39,200 --> 00:23:41,639 Speaker 3: you in touch with them. Yeah, assuming they're not going 514 00:23:41,680 --> 00:23:42,240 Speaker 3: to listen to that. 515 00:23:59,080 --> 00:24:04,800 Speaker 2: Who is the Sweetish fish flavored Ghost Energy Drinks? And 516 00:24:04,840 --> 00:24:07,280 Speaker 2: I think there's like sour Patch kids and a bunch 517 00:24:07,280 --> 00:24:11,600 Speaker 2: of different things, like what adults this is actually drinking this? 518 00:24:11,760 --> 00:24:15,359 Speaker 3: So Ghost is a different brand for Ghost, which is 519 00:24:15,680 --> 00:24:19,040 Speaker 3: at least minority owned by Anhezard Busch, which is minority 520 00:24:19,040 --> 00:24:22,480 Speaker 3: owned by Craig Doctor Pepper. Okay, each of those brands 521 00:24:22,600 --> 00:24:26,800 Speaker 3: have partnerships, they have license agreements with candy companies in 522 00:24:26,800 --> 00:24:30,560 Speaker 3: the case of Mandoli's and Eminem Wrigley Mars. 523 00:24:30,800 --> 00:24:32,360 Speaker 2: And tell me there aren't. 524 00:24:34,960 --> 00:24:37,480 Speaker 1: But I cannot bring myself like I'm like sort of 525 00:24:37,480 --> 00:24:39,679 Speaker 1: a glutton like or I'm sort of like you know, 526 00:24:39,680 --> 00:24:42,120 Speaker 1: a test case. I have yet to bring myself to 527 00:24:42,200 --> 00:24:45,240 Speaker 1: try the Skittles flavored? Is that the c flour makes? 528 00:24:45,280 --> 00:24:48,000 Speaker 1: Who makes the Skittles flavors? Okay, I've yet to bring 529 00:24:48,040 --> 00:24:49,320 Speaker 1: myself to try the Skill. 530 00:24:49,480 --> 00:24:51,800 Speaker 3: And Starburst of the two big ones, I can't drink that, 531 00:24:53,359 --> 00:24:58,840 Speaker 3: so it's it's it's differentiation amongst consumers. I guess it's 532 00:24:58,880 --> 00:25:00,840 Speaker 3: a hard thing to figure out exact who's drinking that. 533 00:25:00,880 --> 00:25:03,399 Speaker 3: It would suggest probably more of a younger consumer. I 534 00:25:03,440 --> 00:25:05,000 Speaker 3: think it's interesting if you look at the growth of 535 00:25:05,000 --> 00:25:06,840 Speaker 3: those brands, a lot of the growth is coming from 536 00:25:06,880 --> 00:25:12,639 Speaker 3: those candy licenses. Who knows who exactly is drinking that, 537 00:25:12,680 --> 00:25:15,679 Speaker 3: But yes, I think that's probably a good way to 538 00:25:15,720 --> 00:25:18,320 Speaker 3: think about it. It's probably not the same consumer as 539 00:25:18,359 --> 00:25:19,360 Speaker 3: the monster in the Celsius. 540 00:25:19,600 --> 00:25:21,720 Speaker 1: But unlike with alcohol, you don't have to have like 541 00:25:21,760 --> 00:25:24,800 Speaker 1: a show your age to buy an energy drink. 542 00:25:24,840 --> 00:25:26,520 Speaker 3: Right. It depends on where you are in the world. 543 00:25:26,520 --> 00:25:29,040 Speaker 3: Oh really, but in the West, not in the US. Okay, 544 00:25:29,880 --> 00:25:32,200 Speaker 3: If there are limits, the FDA has limited or has 545 00:25:32,240 --> 00:25:34,720 Speaker 3: has looked at the caffeine content, has looked at the 546 00:25:34,720 --> 00:25:37,240 Speaker 3: other ingredients in there. And this is a big deal. 547 00:25:37,280 --> 00:25:40,880 Speaker 3: Ten twelve years ago and the CEOs of Red Bull 548 00:25:40,920 --> 00:25:43,520 Speaker 3: Monster Rocks were put in front of Congress to testify 549 00:25:43,520 --> 00:25:46,240 Speaker 3: about the health of this and it all checked out. 550 00:25:46,560 --> 00:25:49,240 Speaker 3: But various governments. I think Canada limits the amount of caffeine. 551 00:25:49,240 --> 00:25:51,159 Speaker 3: There are countries like the UK which I think you 552 00:25:51,160 --> 00:25:53,880 Speaker 3: can't buy it if you're under eighteen. So there are limitations. 553 00:25:54,440 --> 00:25:56,680 Speaker 3: But I suppose telling an under eighteen in the UK 554 00:25:56,840 --> 00:25:58,480 Speaker 3: not to drink an energy drink just makes them want 555 00:25:58,480 --> 00:25:59,040 Speaker 3: to drink it more. 556 00:26:00,119 --> 00:26:02,320 Speaker 2: We should do market research and like go out to 557 00:26:02,560 --> 00:26:05,200 Speaker 2: a couple convenience stores and ask them who is actually 558 00:26:05,200 --> 00:26:07,200 Speaker 2: buying it. A good idea, the candy flavored. 559 00:26:06,840 --> 00:26:10,600 Speaker 1: Ghost buying the star Wars flavored. I'll try it, you know, 560 00:26:10,720 --> 00:26:12,720 Speaker 1: let's try I'll try it one day. I'm just not 561 00:26:12,760 --> 00:26:13,479 Speaker 1: ready yet. 562 00:26:13,720 --> 00:26:15,480 Speaker 3: All right, it's a big can too. 563 00:26:15,640 --> 00:26:16,440 Speaker 1: It's a big can. 564 00:26:16,560 --> 00:26:17,080 Speaker 3: Yeah. 565 00:26:17,640 --> 00:26:21,040 Speaker 1: The Celsius is it seems like it's part of its differentiator. 566 00:26:21,040 --> 00:26:23,119 Speaker 1: It's sort of as like a slender, elegant can, whereas 567 00:26:23,160 --> 00:26:24,679 Speaker 1: the other ones are like sort of like these like 568 00:26:25,000 --> 00:26:27,439 Speaker 1: big in your face, like garish brands. It seems like 569 00:26:28,119 --> 00:26:32,160 Speaker 1: Celsius is for refined, sophisticated people like myself. 570 00:26:31,800 --> 00:26:33,720 Speaker 2: And tru We then spill it on their keyboard. 571 00:26:33,400 --> 00:26:35,040 Speaker 3: And we say this, and the growth in all of 572 00:26:35,080 --> 00:26:37,240 Speaker 3: these brands is just off the charts. 573 00:26:37,280 --> 00:26:37,359 Speaker 2: You. 574 00:26:37,520 --> 00:26:40,640 Speaker 3: Ghost continues to just grow triple digits, Sea four grows 575 00:26:40,640 --> 00:26:43,320 Speaker 3: strong double digits. It's great. 576 00:26:44,240 --> 00:26:46,840 Speaker 2: So just on that note, you know, I'm getting the 577 00:26:46,880 --> 00:26:49,879 Speaker 2: sense that like, okay, the product matters. You want to 578 00:26:49,880 --> 00:26:53,400 Speaker 2: make something that consumers actually want to drink. The branding matters, 579 00:26:53,400 --> 00:26:55,399 Speaker 2: you need them to be aware of it. The distribution 580 00:26:55,520 --> 00:26:57,679 Speaker 2: matters because they have to be able to buy it 581 00:26:57,840 --> 00:27:00,960 Speaker 2: from somewhere convenient and probably. Can you give us an 582 00:27:01,000 --> 00:27:05,480 Speaker 2: example of an energy drink that maybe like petered out 583 00:27:05,960 --> 00:27:09,440 Speaker 2: or was unsuccessful, just so we can sort of compare 584 00:27:09,560 --> 00:27:11,720 Speaker 2: and contrast some of the things that matter here. 585 00:27:12,200 --> 00:27:14,800 Speaker 3: Well, I mentioned Jolt that was kind of the original 586 00:27:14,880 --> 00:27:17,000 Speaker 3: energy drink, even if it wasn't called that at the time. 587 00:27:17,040 --> 00:27:18,560 Speaker 3: I think it was just a little before its time. 588 00:27:18,600 --> 00:27:21,800 Speaker 3: This idea of selling a super caffeinated carbonated soft drink 589 00:27:21,960 --> 00:27:24,720 Speaker 3: five hour energy is a shell of its former self 590 00:27:24,760 --> 00:27:26,240 Speaker 3: only ten twelve years ago. 591 00:27:26,440 --> 00:27:28,439 Speaker 2: Oh yeah, I completely forgot about that. 592 00:27:28,800 --> 00:27:30,920 Speaker 3: And you've had a whole bunch of smaller brands. You know, 593 00:27:31,040 --> 00:27:34,000 Speaker 3: Coke had tried, PEPSI had tried. There was a whole 594 00:27:34,000 --> 00:27:38,160 Speaker 3: bunch of Soby if you remember that brand. Yes, no, yes, yeah, 595 00:27:38,680 --> 00:27:41,040 Speaker 3: there's just a whole bunch of those little brands that 596 00:27:41,040 --> 00:27:44,119 Speaker 3: they've tried and found. It's interesting these big companies are 597 00:27:44,160 --> 00:27:47,800 Speaker 3: really good at the distribution side. There's sometimes less good 598 00:27:47,920 --> 00:27:52,600 Speaker 3: at innovating original products, and so with the energy drink category, 599 00:27:52,760 --> 00:27:55,480 Speaker 3: it became a while ago if you can't beat them 600 00:27:55,480 --> 00:27:58,320 Speaker 3: and distribute them, right. So in the case of Coke 601 00:27:58,359 --> 00:28:00,040 Speaker 3: and Pepsi, they tried this. This probably would have been a 602 00:28:00,040 --> 00:28:03,480 Speaker 3: better conversation fifteen years ago. But ultimately the reason why 603 00:28:03,560 --> 00:28:07,080 Speaker 3: they went out and bought or did partnership agreements is 604 00:28:07,119 --> 00:28:10,600 Speaker 3: because these smaller brands tend to move a little bit 605 00:28:10,600 --> 00:28:13,399 Speaker 3: faster than the big companies. They can innovate faster. You 606 00:28:13,400 --> 00:28:15,639 Speaker 3: don't need as much more market research to get the 607 00:28:15,640 --> 00:28:18,720 Speaker 3: product to market, and so they can do just amazingly 608 00:28:18,760 --> 00:28:20,720 Speaker 3: different things than some of the bigger companies. The bigger 609 00:28:20,760 --> 00:28:23,359 Speaker 3: companies can push the product through the distribution system and 610 00:28:23,359 --> 00:28:24,040 Speaker 3: everybody wins. 611 00:28:24,640 --> 00:28:27,439 Speaker 1: So is there more room for like more upstarts. I mean, 612 00:28:27,480 --> 00:28:29,760 Speaker 1: you look at a chart like the Celsius chart, and 613 00:28:29,800 --> 00:28:32,560 Speaker 1: I'm sure that has all kinds of entrepreneurs, and you 614 00:28:32,600 --> 00:28:34,880 Speaker 1: know it's like, oh, let's uh, you know, maybe we'll 615 00:28:34,920 --> 00:28:37,560 Speaker 1: come up with a energy drink, aim if people work 616 00:28:37,560 --> 00:28:39,600 Speaker 1: on the media, or maybe come up with an energy 617 00:28:39,680 --> 00:28:42,720 Speaker 1: drink really tried, like nail, like skateboarders or something whatever 618 00:28:42,760 --> 00:28:45,400 Speaker 1: it is, or some demographic or like esports players or 619 00:28:45,440 --> 00:28:47,680 Speaker 1: whatever it is. Like, if someone has a new idea 620 00:28:47,720 --> 00:28:49,880 Speaker 1: for like a brand or a new flavor, what do 621 00:28:49,920 --> 00:28:51,719 Speaker 1: they do. What's the next step, you know, is their 622 00:28:51,800 --> 00:28:54,040 Speaker 1: capacity to take on new brands, Like what is that 623 00:28:54,160 --> 00:28:54,760 Speaker 1: battle like. 624 00:28:55,040 --> 00:28:58,280 Speaker 3: The growth of the category. And we're talking specifically energy here, 625 00:28:58,320 --> 00:29:00,000 Speaker 3: but you could probably make the same argument for all 626 00:29:00,080 --> 00:29:05,240 Speaker 3: lot of new age beverage brands. There's capacity to add 627 00:29:05,600 --> 00:29:08,520 Speaker 3: energy drinks to shelves because the consumers want to buy it, 628 00:29:08,560 --> 00:29:10,480 Speaker 3: they want to trial the product and you can figure 629 00:29:10,520 --> 00:29:13,480 Speaker 3: out if it works later. And so you start small 630 00:29:13,520 --> 00:29:15,719 Speaker 3: and you move up the distribution food chain. Right, You've 631 00:29:15,760 --> 00:29:17,960 Speaker 3: got a lot of local distributors that aren't named Danhuzard, 632 00:29:17,960 --> 00:29:21,400 Speaker 3: Bush or Coke, and they're always looking to get in stores. 633 00:29:21,440 --> 00:29:24,200 Speaker 3: And so you can try to figure out how you 634 00:29:24,200 --> 00:29:25,800 Speaker 3: get the product out there. Go to a mall if 635 00:29:25,800 --> 00:29:28,120 Speaker 3: people still go there, and sample the product, parking lots 636 00:29:28,160 --> 00:29:30,840 Speaker 3: of grocery stores wherever it may be. But samplings, you 637 00:29:30,880 --> 00:29:33,840 Speaker 3: can do athletes, events, sponsorships, things like that. Get the 638 00:29:33,880 --> 00:29:35,640 Speaker 3: awareness out there a little bit. You have a different 639 00:29:35,720 --> 00:29:39,160 Speaker 3: value proposition or different functional proposition of the product, get 640 00:29:39,200 --> 00:29:41,800 Speaker 3: on shelf in a few markets and figure out how 641 00:29:41,920 --> 00:29:45,360 Speaker 3: the repeat purchase looks. Like, if it's doing well, you 642 00:29:45,440 --> 00:29:47,360 Speaker 3: move on to bigger distributors. It can give you more 643 00:29:47,400 --> 00:29:50,720 Speaker 3: geographic reach, and so forth and so on. Obviously, it 644 00:29:50,760 --> 00:29:52,520 Speaker 3: starts with just a product that has a little bit 645 00:29:52,520 --> 00:29:57,560 Speaker 3: of a differentiated positioning or maybe a different packaging differentiation, 646 00:29:57,640 --> 00:30:00,840 Speaker 3: whatever it may be. But sure there's opportunities all the time. 647 00:30:01,240 --> 00:30:03,840 Speaker 3: Think about disruption in the energy space. As we talked about, 648 00:30:03,840 --> 00:30:06,360 Speaker 3: there's so many brands out there now. Think about isotomics 649 00:30:06,360 --> 00:30:08,440 Speaker 3: like sports drinks. You know, body armour didn't exist how 650 00:30:08,480 --> 00:30:10,200 Speaker 3: many years ago and now it's a really big brand. 651 00:30:10,560 --> 00:30:15,880 Speaker 2: What's the biggest disruption threat to the energy drink space? Like, 652 00:30:15,920 --> 00:30:18,240 Speaker 2: what would be the thing that would make you have 653 00:30:18,320 --> 00:30:20,760 Speaker 2: to like rush out and I guess rewrite all of 654 00:30:20,800 --> 00:30:22,720 Speaker 2: your god your research. 655 00:30:24,000 --> 00:30:25,800 Speaker 3: I don't know if I've ever actually thought about that. 656 00:30:25,840 --> 00:30:28,240 Speaker 3: I assume it just will continue to grow forever, right, 657 00:30:28,680 --> 00:30:29,800 Speaker 3: Just assume it will grow forever. 658 00:30:30,560 --> 00:30:32,560 Speaker 2: I'm sure that's a much healthier attitude to take. 659 00:30:32,760 --> 00:30:35,000 Speaker 3: I think one of the big things that that knock 660 00:30:35,040 --> 00:30:38,760 Speaker 3: on wood has come and gone is the regulatory side 661 00:30:38,760 --> 00:30:42,640 Speaker 3: of this. Yeah, I think if we all figure out 662 00:30:42,640 --> 00:30:44,280 Speaker 3: these are bad for you in a really bad way. 663 00:30:44,320 --> 00:30:46,400 Speaker 3: But but clearly the FDA has looked at this and 664 00:30:46,640 --> 00:30:49,240 Speaker 3: that's not the case. I think maybe it's evolving taste. 665 00:30:49,240 --> 00:30:51,680 Speaker 3: What's the next iteration of this? Can you make a 666 00:30:52,120 --> 00:30:55,840 Speaker 3: truly healthful energy drink that people want to to drink? 667 00:30:55,920 --> 00:30:58,240 Speaker 3: Is a new category. We're not thinking about new ingredients 668 00:30:58,320 --> 00:31:02,400 Speaker 3: that potentially work together to give you this same effectiveness 669 00:31:02,480 --> 00:31:06,520 Speaker 3: in different form. But I feel like the product works 670 00:31:07,320 --> 00:31:09,840 Speaker 3: because it delivers on what it's supposed to deliver on. 671 00:31:09,880 --> 00:31:12,000 Speaker 3: And so at the end of the day, I think 672 00:31:12,000 --> 00:31:14,120 Speaker 3: if people like the taste of it, and you want 673 00:31:14,120 --> 00:31:16,280 Speaker 3: the caffeine and you need to do more stuff in 674 00:31:16,280 --> 00:31:17,920 Speaker 3: the day, you're gonna keep drinking and energy drink. The 675 00:31:17,960 --> 00:31:19,320 Speaker 3: question is what brand are you gonna drink? 676 00:31:19,560 --> 00:31:19,720 Speaker 2: You know? 677 00:31:19,760 --> 00:31:23,320 Speaker 1: Another question I have about the product creation is like, 678 00:31:24,040 --> 00:31:26,840 Speaker 1: let's say Tracy and I had an idea for a brand. 679 00:31:27,240 --> 00:31:28,720 Speaker 1: You know, it came up with a cool looking can 680 00:31:28,760 --> 00:31:31,480 Speaker 1: and a cool looking name and a cool looking you know, 681 00:31:31,560 --> 00:31:34,840 Speaker 1: figured out the demographic that we wanted to target. Do 682 00:31:34,920 --> 00:31:38,560 Speaker 1: we actually need to be in the business of creating 683 00:31:38,600 --> 00:31:41,280 Speaker 1: the liquid itself or the third party companies that would 684 00:31:41,280 --> 00:31:43,240 Speaker 1: like handle that. It's like, oh, like work with them. 685 00:31:43,240 --> 00:31:45,640 Speaker 1: It's like, Okay, we want something, you know, tangerine and 686 00:31:45,880 --> 00:31:49,360 Speaker 1: you know marshmallow flavor, Yeah, pumpkin spice, like other third 687 00:31:49,360 --> 00:31:51,800 Speaker 1: party companies that we don't know their names that sort 688 00:31:51,800 --> 00:31:54,360 Speaker 1: of like do the actual creation of the liquid side. 689 00:31:54,680 --> 00:31:56,800 Speaker 3: Yes, that's that's the short answer. I mean, there are 690 00:31:56,920 --> 00:32:00,760 Speaker 3: lots and lots of companies behind the scenes that will 691 00:32:00,760 --> 00:32:05,160 Speaker 3: help you from idea to shelf. And yeah, there are 692 00:32:05,280 --> 00:32:09,000 Speaker 3: flavor and fragrance ingredients companies that create the flavor. There 693 00:32:09,040 --> 00:32:12,720 Speaker 3: are co packers as they're called, who produce the products 694 00:32:12,720 --> 00:32:15,200 Speaker 3: for you. You put it in a warehouse, you put 695 00:32:15,200 --> 00:32:16,640 Speaker 3: it on a truck, and you put it on shelf. 696 00:32:17,120 --> 00:32:19,560 Speaker 3: So yes, there's lots of different ways if you wanted 697 00:32:19,560 --> 00:32:22,080 Speaker 3: to get a product to market that you could do that. 698 00:32:22,520 --> 00:32:24,400 Speaker 2: I just have one more question, which is kind of 699 00:32:24,800 --> 00:32:27,240 Speaker 2: where does this all end? Like what is the end 700 00:32:27,400 --> 00:32:31,280 Speaker 2: of the energy drink boom? And I know there's a 701 00:32:31,360 --> 00:32:33,600 Speaker 2: lot of saturation in the US right now, but are 702 00:32:33,680 --> 00:32:37,040 Speaker 2: are we seeing more pickup, for instance, in international markets? 703 00:32:37,280 --> 00:32:41,440 Speaker 3: From a US standpoint, the growth continues to be phenomenal, 704 00:32:41,600 --> 00:32:43,760 Speaker 3: as I mentioned, probably better than I think anybody had thought. 705 00:32:43,800 --> 00:32:45,960 Speaker 3: And so the question is how big. Can the category 706 00:32:46,040 --> 00:32:49,040 Speaker 3: become over time? And I guess the law of large 707 00:32:49,120 --> 00:32:51,000 Speaker 3: numbers at some point catches up to the category. But 708 00:32:51,080 --> 00:32:53,479 Speaker 3: I could have would have said that five, ten, fifteen 709 00:32:53,560 --> 00:32:56,800 Speaker 3: years ago, and here we are. I think you have 710 00:32:56,840 --> 00:33:01,480 Speaker 3: the profitability piece continues to push the retailers to sell it. 711 00:33:01,520 --> 00:33:03,560 Speaker 3: I think the consumers continue to want to buy it. 712 00:33:04,320 --> 00:33:07,400 Speaker 3: So domestically, it seems like we continue to go. International 713 00:33:07,520 --> 00:33:11,760 Speaker 3: is the big opportunity at this point. Monsters is just 714 00:33:11,800 --> 00:33:15,400 Speaker 3: an example. Forty percent of their businesses is international. That's 715 00:33:15,440 --> 00:33:17,080 Speaker 3: a really big number at this point. I think you're 716 00:33:17,080 --> 00:33:19,880 Speaker 3: talking almost three billion dollars of revenue. 717 00:33:20,200 --> 00:33:22,280 Speaker 2: Are they taking share from red Bull? Because red Bull 718 00:33:22,360 --> 00:33:24,480 Speaker 2: is always the one I think of as like international. 719 00:33:24,520 --> 00:33:26,640 Speaker 3: They're taking insane amounts of share from red Bull outside 720 00:33:26,640 --> 00:33:28,760 Speaker 3: the US. In the US, Monster and Rebel are seatings 721 00:33:28,800 --> 00:33:30,640 Speaker 3: shared a lot of the brands that we're talking about, 722 00:33:30,640 --> 00:33:34,360 Speaker 3: But outside the US, Monster is growing like a weed, 723 00:33:35,000 --> 00:33:38,640 Speaker 3: partly through the benefit of coke distribution, partly through innovation, 724 00:33:38,800 --> 00:33:41,680 Speaker 3: partly through just increasing shelf space, brand awareness. A lot 725 00:33:41,680 --> 00:33:44,720 Speaker 3: of the athletes events sponsorships that they do, but they've 726 00:33:44,760 --> 00:33:48,000 Speaker 3: done phenomenally well. The question is can it be seventy 727 00:33:48,040 --> 00:33:52,800 Speaker 3: eighty percent international at some point maybe Celsius, not surprisingly 728 00:33:52,880 --> 00:33:55,120 Speaker 3: is has looked at what Monster has done outside the 729 00:33:55,200 --> 00:33:59,400 Speaker 3: US and they've started talking about international plans, probably in 730 00:33:59,480 --> 00:34:02,480 Speaker 3: part or or largely through the PEPSI system because of 731 00:34:02,520 --> 00:34:04,840 Speaker 3: the relationship they have in the US. So that'll be 732 00:34:04,880 --> 00:34:08,000 Speaker 3: a very interesting thing to watch over the next several 733 00:34:08,080 --> 00:34:11,200 Speaker 3: years as that develops. There are some energy drink brands 734 00:34:11,239 --> 00:34:14,239 Speaker 3: outside the US, but largely in these international markets. It's 735 00:34:14,239 --> 00:34:18,319 Speaker 3: a Monster in red Bull game and Celsius I think 736 00:34:18,400 --> 00:34:20,520 Speaker 3: can have success in trying to do what they've done 737 00:34:20,560 --> 00:34:23,640 Speaker 3: in the US, which is that same older consumer, different 738 00:34:24,080 --> 00:34:27,600 Speaker 3: positioning of the product, and create more category growth over time. 739 00:34:27,960 --> 00:34:30,879 Speaker 1: Mark Astracan, thank you so much for coming in. We'll 740 00:34:30,920 --> 00:34:32,440 Speaker 1: have you back at two and a half years when 741 00:34:32,440 --> 00:34:35,560 Speaker 1: there's another you know, when we're all whatever the next 742 00:34:35,600 --> 00:34:37,560 Speaker 1: brand is. Is there one other brand that we should 743 00:34:37,560 --> 00:34:40,719 Speaker 1: look out for? Are there any other publicly traded. 744 00:34:40,400 --> 00:34:44,200 Speaker 3: Ones not of size? Okay, all right, well, thank you 745 00:34:44,239 --> 00:34:46,200 Speaker 3: so much for coming back on off Yah absolutely, thanks 746 00:34:46,239 --> 00:34:47,879 Speaker 3: for having me. That was great. 747 00:34:48,080 --> 00:34:49,279 Speaker 2: Thanks Mark, that was fun. 748 00:34:49,680 --> 00:34:51,160 Speaker 3: I can't believe you took down your keyboard. 749 00:35:04,200 --> 00:35:07,520 Speaker 1: Tracy, should we start the pumpkin spice. I think I 750 00:35:07,600 --> 00:35:09,520 Speaker 1: sound jittery. I think I actually may have had too 751 00:35:09,560 --> 00:35:12,200 Speaker 1: much caffeine. I feel jittery right now. I think I 752 00:35:12,480 --> 00:35:12,959 Speaker 1: did it today. 753 00:35:13,080 --> 00:35:15,879 Speaker 2: Yeah, we should white label our own energy drink. 754 00:35:16,040 --> 00:35:18,320 Speaker 1: I think that it would be a really fun project, 755 00:35:18,360 --> 00:35:20,959 Speaker 1: or at least like see what entails. Like we could 756 00:35:20,960 --> 00:35:24,600 Speaker 1: get like, you know, one of those AI image generators 757 00:35:24,640 --> 00:35:26,279 Speaker 1: to come up with a name or come up with 758 00:35:26,320 --> 00:35:28,640 Speaker 1: a brand, and then like build this whole thing around it, 759 00:35:28,920 --> 00:35:31,040 Speaker 1: and then like actually see what it would take to 760 00:35:31,239 --> 00:35:33,680 Speaker 1: get this sort of liquid made, and they go to 761 00:35:33,800 --> 00:35:35,960 Speaker 1: the cannery, and it would be a fun project to cannery. 762 00:35:36,239 --> 00:35:39,920 Speaker 2: I feel like I feel like the most difficult thing 763 00:35:40,000 --> 00:35:41,520 Speaker 2: to do and the most crucial thing to do it 764 00:35:41,520 --> 00:35:44,520 Speaker 2: would be get that distribution deal with like a Coca 765 00:35:44,600 --> 00:35:48,400 Speaker 2: Cola or an Anheuser Bush or something like that. I 766 00:35:48,400 --> 00:35:50,360 Speaker 2: feel like that's really what you need for success. 767 00:35:50,640 --> 00:35:53,000 Speaker 1: Neither of us could talk. I think we should just 768 00:35:53,000 --> 00:35:54,440 Speaker 1: like wrap it up because I think I'm just like 769 00:35:54,480 --> 00:35:56,120 Speaker 1: so like well overcaffeinated. 770 00:35:56,239 --> 00:35:59,160 Speaker 2: The other thing I was thinking about was Mark's point 771 00:35:59,200 --> 00:36:02,319 Speaker 2: about you know, one of the reasons this market is 772 00:36:02,400 --> 00:36:06,000 Speaker 2: growing is because people are tired, Yeah, and they need 773 00:36:06,120 --> 00:36:08,000 Speaker 2: energy to do stuff, And it kind of made me 774 00:36:08,040 --> 00:36:12,600 Speaker 2: think about how self medication is just so much more 775 00:36:13,360 --> 00:36:16,640 Speaker 2: like accepted and endemic today than it used to be. 776 00:36:16,760 --> 00:36:19,840 Speaker 2: And I was kind of thinking, maybe I clearly have 777 00:36:19,880 --> 00:36:22,000 Speaker 2: had too much caffeine, But like you know, I was 778 00:36:22,040 --> 00:36:24,239 Speaker 2: thinking about what would be the ultimate disruptor to the 779 00:36:24,239 --> 00:36:27,680 Speaker 2: caffeine segment. Well, what are the energy drink segment? What 780 00:36:27,760 --> 00:36:32,040 Speaker 2: if you got like an nozepic type thing for energy. 781 00:36:32,160 --> 00:36:35,160 Speaker 2: I guess it's called adderall, but like, you know, what 782 00:36:35,239 --> 00:36:38,000 Speaker 2: if you got something like that that completely came out 783 00:36:38,000 --> 00:36:40,920 Speaker 2: of nowhere and just made everyone well. 784 00:36:40,719 --> 00:36:43,759 Speaker 1: I was gonna say, so the one thing that we 785 00:36:43,800 --> 00:36:46,920 Speaker 1: didn't bring up in the conversation. But what I've noticed 786 00:36:47,160 --> 00:36:50,960 Speaker 1: is that more and more in Manhattan, I'm noticing on 787 00:36:51,080 --> 00:36:57,279 Speaker 1: the shelves at bodega's like various Frankly, we'd drinks whether 788 00:36:57,280 --> 00:37:01,920 Speaker 1: it's THHC or CBD, like the CBD infused ones, but 789 00:37:01,960 --> 00:37:04,680 Speaker 1: I'm seeing THHC ones. And I don't know whether hemp 790 00:37:04,719 --> 00:37:07,799 Speaker 1: infused or like actual marijuana, but clear like that is 791 00:37:07,840 --> 00:37:09,919 Speaker 1: a category that I'm starting to see more and more 792 00:37:09,960 --> 00:37:13,399 Speaker 1: on the shelf Like in Manhattan. I'm not entirely clear, 793 00:37:13,560 --> 00:37:16,440 Speaker 1: like you know what's totally being legally distributed, et cetera. 794 00:37:16,920 --> 00:37:19,880 Speaker 1: But it sort of feels like, you know, speak to 795 00:37:19,920 --> 00:37:22,799 Speaker 1: your point about self medication. It's like you know, you 796 00:37:22,880 --> 00:37:25,280 Speaker 1: have your rock, you have your Celsius in the morning, 797 00:37:25,800 --> 00:37:29,839 Speaker 1: and then you like, yeah, well you're like super jederary, right, 798 00:37:29,920 --> 00:37:31,640 Speaker 1: Like you're super jitery and like how do you get 799 00:37:31,640 --> 00:37:33,759 Speaker 1: to sleep? Well, then you have like your sort of 800 00:37:34,160 --> 00:37:36,360 Speaker 1: you know, your opposite drink at night that sort of 801 00:37:36,400 --> 00:37:39,400 Speaker 1: like mellows you out. So I wonder if that's going 802 00:37:39,480 --> 00:37:42,720 Speaker 1: to be a category to watch for all these companies. 803 00:37:42,800 --> 00:37:46,040 Speaker 2: Interesting, Yeah, all right, well shall we leave it there? 804 00:37:46,120 --> 00:37:46,759 Speaker 1: Let's leave it there. 805 00:37:46,840 --> 00:37:49,960 Speaker 2: Okay, this has been another episode of the All Thoughts Podcast. 806 00:37:50,000 --> 00:37:53,120 Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway. 807 00:37:52,800 --> 00:37:55,400 Speaker 1: And I'm Joe Wisenthal. You can follow me at the Stalwart. 808 00:37:55,760 --> 00:37:59,160 Speaker 1: Follow our producers Carmen Rodriguez at Carmen Arman and dash 809 00:37:59,200 --> 00:38:01,520 Speaker 1: O Bennett at Death and a special thanks to our 810 00:38:01,520 --> 00:38:04,880 Speaker 1: producer Moses onm. If you want more odd Lots content, 811 00:38:04,920 --> 00:38:07,759 Speaker 1: go to Bloomberg dot com slash odd Lots, where we 812 00:38:07,800 --> 00:38:10,320 Speaker 1: have transcripts, a blog, and a newsletter. And if you 813 00:38:10,360 --> 00:38:12,239 Speaker 1: want to chat about this episode and any other is 814 00:38:12,239 --> 00:38:15,160 Speaker 1: twenty four to seven. Check out the discord, discord dot 815 00:38:15,200 --> 00:38:16,480 Speaker 1: gg slash odd. 816 00:38:16,320 --> 00:38:19,279 Speaker 2: Lots and if you enjoy odd Lots, if you want 817 00:38:19,360 --> 00:38:22,000 Speaker 2: us to white label our own energy drink and try 818 00:38:22,000 --> 00:38:25,160 Speaker 2: to distribute it, then please leave us a positive review 819 00:38:25,239 --> 00:38:27,920 Speaker 2: on your favorite podcast platform. Thanks for listening.