Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of The Odd Lots Podcast.
Speaker 3: I'm Joe Wisenthal and I'm Tracy Allaway.
Speaker 2: Tracy, I have to say I've been feeling a little
Speaker 2: lethargic this week, a little bit under the weather. No, no, yeah,
Speaker 2: you know, it's just you know, sometimes you wake up
Speaker 2: on the wrong side of the bed anyway. But uh,
Speaker 2: I'm feeling a little bit better because I've been consuming
Speaker 2: a lot of caffeine today.
Speaker 3: Yes, I'm looking at you in the studio right now,
Speaker 3: and you have with you another Celsius. Yes, what's the
Speaker 3: flavor on your one?
Speaker 2: I am drinking an Arctic Vibe, which is a sparkling
Speaker 2: frozen berry edition. I don't know, I have to I'm not,
Speaker 2: I'm sure like if in a blind taste test out
Speaker 2: go this is berry. But it's very flavorful and it's
Speaker 2: sugar free, and it's perked me up and I feel
Speaker 2: very keyed up and ready to go. You are also
Speaker 2: drinking as Celsius. What are you drinking?
Speaker 3: I have Cosmic Vibe, a sparkling fruit punch and it
Speaker 3: does actually taste like carbonated kool Aid. It's sort of
Speaker 3: nostalgic in some way.
Speaker 1: But the thing that.
Speaker 3: Interests me is, you know, I'm looking at the branding
Speaker 3: and the ads on the can. And we've talked about
Speaker 3: this before. We did a whole episode about Celsius. But
Speaker 3: the interesting thing to me is how this is slightly
Speaker 3: different from other energy drinks. So it talks about obviously
Speaker 3: providing energy, but also accelerating metabolism and burning body fat.
Speaker 3: And I was going through the ingredients earlier and it
Speaker 3: has biotin in it, which is something that I take
Speaker 3: for like hair and skin and nails and stuff. So
Speaker 3: I guess I don't need to take supplements anymore. I
Speaker 3: can just drink Celsius.
Speaker 2: I supposedly you could just drink Celsius.
Speaker 1: No.
Speaker 2: I'm fascinating for this for all reasons, for all kinds
Speaker 2: of reasons. I mean, we've talked about energy drinks for
Speaker 2: a while. We did a story about the incredible rise
Speaker 2: of episode about Monster a few years ago. One of
Speaker 2: the stocks that's actually outperformed Amazon over the same time period.
Speaker 2: And if you go into any local deli or bodega
Speaker 2: or seven to eleven these days, you just see this wall,
Speaker 2: and the wall just keeps getting bigger of drinks, and
Speaker 2: many of them highly caffeinated energy drinks. And it's sort
Speaker 2: of fascinating to me, like, there are all these energy
Speaker 2: drinks out there that exist, how is their room for more?
Speaker 2: It's like they all like right, like you like basically
Speaker 2: want to consume one and you get a jolt of
Speaker 2: caffeine and you go about your day. It's amazing that
Speaker 2: despite this maturity and this size, and we had a
Speaker 2: red Bull and Monster and all there's that, yet somehow
Speaker 2: there could still be room for another competitor to seemingly
Speaker 2: I know it's never coming out of nowhere, but seemingly
Speaker 2: coming out of nowhere.
Speaker 3: Yeah, this is the thing that fascinates me too. So
Speaker 3: we don't just have different brands of energy drinks, like
Speaker 3: within the brands themselves, there are so many different flames
Speaker 3: now and options. It's kind of amazing. And again, when
Speaker 3: you go into the store, you see this sort of
Speaker 3: rainbow of cans on display. The other thing that interests
Speaker 3: me is the distribution question. Yes, so I'm always curious,
Speaker 3: like who makes the decisions of what ends up on
Speaker 3: the shelves in your local seven to eleven or Circle
Speaker 3: K or Dwayne Reid or whatever, like, how do those
Speaker 3: specific flavors get chosen much less even the brands, right,
Speaker 3: And I think this is something that's come up in
Speaker 3: a number of episodes now, just how important distribution can
Speaker 3: actually be to these particular types of products.
Speaker 2: Well, I think we should just jump right into it.
Speaker 2: We really do have the perfect guest because today we're
Speaker 2: going to be speaking with John field Ley. He is
Speaker 2: the president and CEO of Celsia's holdings. He's been CEO
Speaker 2: since twenty seventeen, been with it's the company for twelve years.
Speaker 2: And we're going to ask all these questions about how
Speaker 2: how this all works, how you rise to the top,
Speaker 2: and what is clearly a very out of the field.
Speaker 2: So John, thank you so much for coming on outlots.
Speaker 4: Glad to be here, Joe excited at Tracy. It's exciting.
Speaker 4: I like to tell you brought in our Cosmic five. We
Speaker 4: love the flavors on that fruit punch refreshing. That's what
Speaker 4: it's all about. Glad to be here, all right.
Speaker 2: I have a question. So, like a year ago, I
Speaker 2: started noticing that all the fit and cool looking people
Speaker 2: at my gym were drinking Celsius, and then I was like, well,
Speaker 2: I want to be one of the fit and cool
Speaker 2: looking people at the gym. So I then bought as Celsius.
Speaker 2: What happened? Celsius has been around a long time, but
Speaker 2: suddenly over the last year, year and a half, maybe
Speaker 2: two years, I started seeing it somewhere. What happened a
Speaker 2: year and a half ago? That suddenly was that a
Speaker 2: thing that you guys did? Was it word of mouth?
Speaker 2: What what suddenly happened? That's sort of really like I
Speaker 2: started seeing it everywhere?
Speaker 4: Yeah, I mean when you found us at the gym.
Speaker 4: The brand's been around for over fifteen years. We built
Speaker 4: it in the gyms and health clubs, at Vitamin C
Speaker 4: GNC golds in twenty four hour, those are the likes.
Speaker 4: If you're going back only a year and a half
Speaker 4: ago and you were talking about your comments on the
Speaker 4: intro about distribution. We partner with Pepsi a year ago.
Speaker 4: As our distribution projects show that really expanded the availability
Speaker 4: of Celsius to where we are today, which they call
Speaker 4: a ninety eight percent ACV. So there's reporting stores that
Speaker 4: report sales for consumer products into IRI Data or Nielsen
Speaker 4: they call it, and then looking at the total population
Speaker 4: of the stores reporting in Pepsi has been able to
Speaker 4: get us through about ninety eight percent ACV, So we
Speaker 4: still got a lot of work to do on the
Speaker 4: placements in each store, but in general, you should be
Speaker 4: able to find, you know, Celsius probably in almost every
Speaker 4: retailer in the United States ort least ninety eight percent
Speaker 4: of them. So the data says, I.
Speaker 3: Have a really straightforward question before we dig into some
Speaker 3: of the specifics of this particular business. But how much
Speaker 3: caffeine do you need to consume to be CEO of Celsius?
Speaker 3: How much do you drink on a daily They.
Speaker 4: Drink Yeah, you know, I started the warning off. I
Speaker 4: have probably two cans a day. I have a can
Speaker 4: in the morning Celsius in the morning, and then usually
Speaker 4: have all of my lunch. So drinking a watermelon right now?
Speaker 4: So which is dynamite in a great flavor? All right?
Speaker 3: So you mentioned distribution and the deal with Pepsi. My
Speaker 3: understanding from the previous episode we did with Mark ASTERCN
Speaker 3: is that a lot of this business is about distribution,
Speaker 3: and you struck that deal with Pepsi. Monster has a
Speaker 3: deal with Coke. From what I remember, how do those
Speaker 3: distribution deals actually come into being. What are the conversations actually.
Speaker 4: Like, Yeah, well, you know, distribution for consumer product companies
Speaker 4: are extremely key and beverage Joe talking in the beginning
Speaker 4: about you know how competitive the beverage industry is, and
Speaker 4: there's about five thousand new brands in the beverage industry
Speaker 4: that come to market each year. Well about ten percent
Speaker 4: of those will make it to one hundred million in sales,
Speaker 4: and then another ten percent of those will make it
Speaker 4: to like a million dollars and very rare why any
Speaker 4: of them make it to a billion dollars in sales.
Speaker 4: So it's a highly competitive market. And when you look
Speaker 4: at the distribution, that's been a challenge. You know, it's
Speaker 4: definitely a tough conversation because if you have a product,
Speaker 4: you need to be able to have retailer's acceptance, So
Speaker 4: your distributor needs to have a place to put it
Speaker 4: right if they take the distribution, and then you also
Speaker 4: need to have consumers that are buying it. So it's
Speaker 4: like a chicken in the egg, which is very difficult
Speaker 4: to do. So when we go to distribution prior to PEPSI,
Speaker 4: we're in a lot of ab abi and how's it
Speaker 4: Bush independent distributors, and we had a lot of conversation
Speaker 4: with them. You know, it was very difficult for them
Speaker 4: to take a product because they were saying, you know,
Speaker 4: I'll take your product on, but then I just can't
Speaker 4: have it sit in my warehouse. You know, I need
Speaker 4: a product, I need a consumer poll, I need retailers
Speaker 4: that want it. So what we had to do is
Speaker 4: we had to really build a demand at the retailer
Speaker 4: prior to going and really getting these distributors to sign up.
Speaker 4: So we actually had to what they called sell direct,
Speaker 4: So we'd sold direct to a lot of the retailers
Speaker 4: are targeted retailers that we built scale and volume and
Speaker 4: consumers around to create that, you know, that sales channel.
Speaker 4: So then we could go to the distributor and show
Speaker 4: the distributor we had there's a reason why we should
Speaker 4: be in their distribution network, and that's constantly reinforcing and
Speaker 4: then collaborating with them to build out the distribution, build
Speaker 4: a consumer awareness, and ultimately work to get a loyal
Speaker 4: consumer around the brand within that given market. Yeah.
Speaker 2: No, I mean that makes a ton of sense, right,
Speaker 2: So that whether it's the independent anhyder Bush distributors, whether
Speaker 2: it's pepsi. They're not going to pick it up unless
Speaker 2: their own end retailers are going to actually devote shelf space.
Speaker 2: They're not going to devote shelf space unless they see
Speaker 2: that there is some evidence that if they devote shelf
Speaker 2: space that someone's going to buy it. What did you do? Like,
Speaker 2: you know, different energy drinks seem to have different audiences
Speaker 2: or different so you know, like I think some like
Speaker 2: are probably more for the gamer space and some are
Speaker 2: more for like sort of like euro types who like
Speaker 2: go to clubs and listen to DJs do some want
Speaker 2: to be associated with extreme sports, and some are associated
Speaker 2: with construction sites and maybe more blue collar workers or
Speaker 2: truck drivers, et cetera. How do you pick a lane?
Speaker 4: Well, that's the other thing you need to put. You
Speaker 4: really need to have a target audience. You need to
Speaker 4: have a retailer story, you need to have a distributor story,
Speaker 4: you need to have a consumer story. So that's one
Speaker 4: thing that we've been able to work on over the years.
Speaker 4: The same retailer story and your distributor story or sales
Speaker 4: pitch might you know needs to be different than potentially
Speaker 4: the consumer pitch. When you look at it, it's really
Speaker 4: understanding your customer. You have to be customer centric. You
Speaker 4: have to understand why does your customer needs your product,
Speaker 4: what is the reason, what is the void and maybe
Speaker 4: their portfolio and at the end of the day, how
Speaker 4: can they make more money on your product. So as
Speaker 4: an example to your point, there's different segments. So Celsius
Speaker 4: is really essential energy. So Celsius is Celsius Live fits
Speaker 4: our mantra. We have over two point eight grams of
Speaker 4: vitamin you mentioned by it's in traces in the product,
Speaker 4: and we have a variety. We have green tea and
Speaker 4: ginger chromium. We have vitamin C and your B complexes,
Speaker 4: so a lot of great vitamin's in there. It's almost
Speaker 4: like a multi vitamin within a can. And that really
Speaker 4: positions us as this healthy, better for you energy segment,
Speaker 4: and that's really what we when we speaking with our distributors,
Speaker 4: they had a void because historically it's been sugary energy
Speaker 4: drinks that they've had within their portfolio, and we were
Speaker 4: offering this different offering for them to sell for this
Speaker 4: better for you consumer, which is especially coming out of
Speaker 4: a post COVID world. Everyone's thinking about health and wellness
Speaker 4: and fitness, which is a key and a DNA component
Speaker 4: of who we are. We originally started off as a
Speaker 4: pre workout, but now we're aligned with today's health minded
Speaker 4: consumer with our attributes of accelerating metabolism and helping burn
Speaker 4: body fat so really help you achieve your health and
Speaker 4: wellness goals. So that allowed us to position ourselves within
Speaker 4: the distributors as a unique offering within their portfolio. And
Speaker 4: that was our go to market strategy with our distributed
Speaker 4: and also with our retailers to be able to carve
Speaker 4: that space out within those precious resell volts or you
Speaker 4: know planograms that retailers have. So it's a multifaceted approach
Speaker 4: to gain planogram approval at your retailer and then get
Speaker 4: that distributor to actually get it on the shelf.
Speaker 3: Oh wait, what's a planogram? You've never heard that word before.
Speaker 4: So you mentioned how how do your products get included
Speaker 4: on your retail shelf? So when you go to your
Speaker 4: retailer and you go to these chains, all those products
Speaker 4: are mainly orchestrated or designed based on planograms. So the
Speaker 4: products are pre selected by a buyer at the corporate
Speaker 4: office almost like think of them as portfolio managers. Or
Speaker 4: you know, like a mutual fund manager or so on,
Speaker 4: that's picking investments within their shared space to maximize their
Speaker 4: retail maximize revenue for that retailer. So they're picking the
Speaker 4: right they're picking the particular products for their consumer base
Speaker 4: to drive the highest return for that retailer. And that's
Speaker 4: all driven based on planograms. That's what buyers set and
Speaker 4: then those those get provided to the store levels to
Speaker 4: be able to set the shelves for the right strategy.
Speaker 4: And those strategies get reviewed multiple times a year. There's
Speaker 4: big annual reviews that happen usually in October and November,
Speaker 4: depending on the retailer. And then they we'll do retailers
Speaker 4: will do like a mini cut in or a reset
Speaker 4: or a review right around mid year historically, where they'll
Speaker 4: make some changes to their plantgrams to really kind of
Speaker 4: dial in to maximize the opportunity. So example, if a
Speaker 4: certain brand or certain flavors aren't working within the initial
Speaker 4: few months, they'll maybe get cut and they'll try new
Speaker 4: opportunities that come in. So one thing in a retail space,
Speaker 4: especially in the energy category, you really only have in
Speaker 4: some cases up to forty five days to perform on
Speaker 4: shelf otherwise you're out so highly competitive, highly difficult, and
Speaker 4: it's really hard to compete in today's energy during category
Speaker 4: and in beaverage just because it's dominated by really strong
Speaker 4: brands that are out there. And Celsius has been able
Speaker 4: to really rise to the top as we are the
Speaker 4: third largest energy drink brand right now in the United States,
Speaker 4: so we have over over a ten share in the
Speaker 4: energy category for the first time, and just getting one
Speaker 4: share is practically near impossible.
Speaker 3: So from your perspective, how do you fight for that
Speaker 3: shelf space or that space in the planogram? And I'm
Speaker 3: looking at some images of this now.
Speaker 4: They look like this.
Speaker 2: They're like a visual representation of what a deli looks like.
Speaker 3: Yeah, yeah, it's basically the rainbow wall that I mentioned before.
Speaker 3: I'm looking at one for Detergent and it's extremely colorful.
Speaker 3: But how do you convince companies that you deserve that space?
Speaker 3: And going back to the chicken and egg issue that
Speaker 3: you kind of described before and the idea that you
Speaker 3: only have forty five days or so to prove yourself,
Speaker 3: how do you actually go about demonstrating that there is demand,
Speaker 3: especially when you're unveiling something that's still relatively new in
Speaker 3: the market.
Speaker 4: Yeah, that's the highly difficult, that difficult thing to do.
Speaker 1: Now.
Speaker 4: Usually it starts off certain retailers are able to make
Speaker 4: regionalize or localized buying decisions. So those planograms you're looking
Speaker 4: at for the clorox or the detergent set that you're
Speaker 4: looking at, those will be mandated down from corporate, but
Speaker 4: then on a localized level, let's say maybe ten percent,
Speaker 4: maybe fifteen percent of those plantograms can be adjusted for
Speaker 4: local store manager level customization. So what we did is
Speaker 4: we were able to work locally with a few managers
Speaker 4: at some of these key retailers to really focus on
Speaker 4: building a story, so you know, gaining trial, working with
Speaker 4: the retailers, building a loyal consumer in that outlet, and
Speaker 4: then kind of scaling that to two to three stores,
Speaker 4: then eventually going to a region, so you start to
Speaker 4: build a sales story on why you need to be
Speaker 4: in that retailer and why you weren't maybe a larger
Speaker 4: regional or national rollout within the retailer. So it's really
Speaker 4: starting those grassroots stories and then being able to get
Speaker 4: that buyer meeting, which is so difficult to do it
Speaker 4: corporate headquarters for their annual reviews, and then convincing the
Speaker 4: buyer why they need to bet on your product. I mean, ultimately,
Speaker 4: at the end of the day, you're trying to get
Speaker 4: the buyer at these retailers to invest in you as
Speaker 4: a as a brand, as a company. So it's those
Speaker 4: type of strategies and you're going to have to convince
Speaker 4: a lot of it's emotion too, right, So in your
Speaker 4: early brand the argument is, well, the brand doesn't travel,
Speaker 4: maybe it's a certain community segment, certain income level demographics,
Speaker 4: so there's a lot of negativity, but you have to
Speaker 4: convince that buyer to believe. Once you convince that buyer
Speaker 4: to believe, you get the opportunity, then it's on you
Speaker 4: to perform. And if you can perform, then you continue
Speaker 4: to build the brand based on data that shows results.
Speaker 4: It shows that you need to get better placement in
Speaker 4: that plantgram shows that you need to get additional flavors
Speaker 4: because you're offering a variety an opportunity, and the billboard
Speaker 4: effect is super critical. You need to get a billboard effects.
Speaker 4: So when we started, I'll take Target as an example.
Speaker 4: When we first got listed nationally. In Target, we only
Speaker 4: had two flavors authorized that was on the warm shelf,
Speaker 4: and almost every year after that we were able to
Speaker 4: because of the increase in sales and working with local managers,
Speaker 4: we were able to build that and get authorized for
Speaker 4: an additional flavor to be added into the Target sets. Well.
Speaker 4: Once we got to about five flavors at Target, we
Speaker 4: were able to create this like a billboard or Celsia's
Speaker 4: brand on shelf, which started to be incremental. So when
Speaker 4: we added another flavor, it didn't cannibalize our sales. It
Speaker 4: actually increased our sales because more consumers can see the
Speaker 4: product because you create the billboard. Just think of it
Speaker 4: last time, and just think last week, how many new
Speaker 4: brands you tried, and the last seven days, and the
Speaker 4: last fourteen days and thirty days. It's really difficult to
Speaker 4: get a consumer to try a new product. You really
Speaker 4: only have about thirty seconds at best at retail, at
Speaker 4: that retail shelf to convince that consumer to try your
Speaker 4: product for the first time.
Speaker 2: Wait, you mentioned you started at Target on the warm shelf.
Speaker 2: I assume now you're in the refrigerated section of Target.
Speaker 4: Yeah, today we're we have a warm availability and the
Speaker 4: energy set and a variety of stores around the country
Speaker 4: or in the front checkout coolers and additional cold placements
Speaker 4: throughout the store.
Speaker 2: Yeah, I noticed it at my local deli. I think
Speaker 2: I said this last time we talked about you guys.
Speaker 2: I remember, like I was looking for the Celsius and
Speaker 2: I didn't see you, and then it was only because
Speaker 2: I realized that there wasn't. My local bodega now has
Speaker 2: an entire Celsius devoted refrigerator. That it's just Celsius so
Speaker 2: well done on that. Let's talk about the distribution relationship.
Speaker 2: I have to imagine, like you know, Tracy and I
Speaker 2: were starting an energy drink, we would be desperate to
Speaker 2: get like on part of like Pepsi's distribution network early on.
Speaker 2: But then if we grew really big and with the
Speaker 2: odd Loot's Energy Drink were huge, then I imagined that
Speaker 2: power relationship between us and Pepsi might change, and maybe
Speaker 2: in a few years we say, hey, Pepsi, you know what,
Speaker 2: maybe we want to check the terms of our contract.
Speaker 2: I'm sure you have a great relationship with Pepsi, so
Speaker 2: I don't want to say anything. You know, I'm not
Speaker 2: trying to close any trouble, but can you talk to
Speaker 2: us about how that relationship with the distributor changes or
Speaker 2: evolves as you grow bigger and have your own form
Speaker 2: of leverage.
Speaker 4: Yeah, I think that's we're still in the early phases,
Speaker 4: so call it the honeymoon with Pepsi because really we're
Speaker 4: only one year in. So we gained distribution, we're gaining
Speaker 4: additional displays. We're working with them collaboratively for the first
Speaker 4: time this year because it's really our first time that
Speaker 4: we've had a full year of planning. You can imagine Pepsi,
Speaker 4: a company so large, is that they're planning cycles. You know,
Speaker 4: they're planning like two years in advance, versus you know,
Speaker 4: at Celsius, we're very nimble and quick. We've had to
Speaker 4: adjust our planning cycles to really align with their planning cycle.
Speaker 4: On execution, innovation, and retailer marketing programs, those are the likes.
Speaker 4: But what we've been able to do this year, we're
Speaker 4: really excited for the first time to really be able
Speaker 4: to harness Pepsi's resources and planning so we can be
Speaker 4: included on like national priorities and national execution programs. So
Speaker 4: I would say we're still in the you know, the
Speaker 4: early phase. We're really excited about the opportunities we're gaining
Speaker 4: cold placements. You mentioned the deli that you went to
Speaker 4: and saw Celsius dedicated coolers. We've placed over ten thousand
Speaker 4: coolers together, the the amount of displays together. So we're
Speaker 4: really excited at this partnership is just getting started. You
Speaker 4: know what we say in the beverage industry, especially in energy,
Speaker 4: you know, if it's cold, it's sold, and then snack
Speaker 4: it high and watch it fly with displays. So we
Speaker 4: say that all the time internally and it's been great
Speaker 4: with our Pepsi partnership.
Speaker 2: Do beverage brands, however, like dream of owning more of
Speaker 2: their distribution over time? Like I mean eventually again, I
Speaker 2: understand you're in the honeymoon phase. You're probably going to
Speaker 2: be working with Pepsi for a long time, but just conceptually,
Speaker 2: does a beverage company eventually try to own more as
Speaker 2: much of their own distribution capacity as they can?
Speaker 4: Well, you know, that's an interesting question, and it's like
Speaker 4: when you go to think about that, you know, it's
Speaker 4: what type of business are you and what type of
Speaker 4: business do you want to become? So there has been
Speaker 4: a successful company that's did it on their own which
Speaker 4: is Red Bull. I mean Red Bull owns their own distribution.
Speaker 4: They're phenomenal, they do a great job, great executors, and
Speaker 4: it's worked extremely well. There's been other regional brands that
Speaker 4: have tried that, and it's just it's if you don't
Speaker 4: have the right amount of scale. Until they get that
Speaker 4: scaling point, it could be an extreme, extremely costly strategy
Speaker 4: if you think about all the trucks and warehouses and
Speaker 4: people and resources you're going to need to manage that.
Speaker 4: So when you look at Monster as an example, they
Speaker 4: use the back end of coke and they're really focused
Speaker 4: on what they do best is portfolio management within sales
Speaker 4: and marketing teams. So you know that's our strategy. Our
Speaker 4: strategy is to leverage the PepsiCo distribution network and their
Speaker 4: resources and team members to further bring our brand to
Speaker 4: more people and more consumers and do what we do best,
Speaker 4: which is the sales and marketing component really bringing great tasting,
Speaker 4: innovative energy drinks to market. Tracy's drinking that Cosmic Vibe
Speaker 4: which is out of this world, and we're launching a
Speaker 4: trilogy and going intergalactic with Galaxy Vibe and Astro Vibe
Speaker 4: as two new flavors this year.
Speaker 3: Oh man, I have a slightly different distribution question, which is,
Speaker 3: if I go on Amazon right now and I type
Speaker 3: in Celsius, the second result I get is a sponsored
Speaker 3: ad for Monster Energy. How annoyed does that make you?
Speaker 4: I think we're flattered. I think you know, that's quite
Speaker 4: flattering that we've gotten to the point that monsters buying
Speaker 4: ads against our consumers and fans searching for Celsius, so
Speaker 4: we do not see our consumers really trading between brands.
Speaker 4: So Monster is a great brand, Rebels a great brand,
Speaker 4: But that's really flattering. It's a highly competitive environment. The
Speaker 4: category continues to grow. Celsius is actually bringing new consumers
Speaker 4: into the category, so we're one of the true growth drivers,
Speaker 4: largest growth driver there's not only in dollars but units
Speaker 4: to the category. So highly competitive, highly competitive.
Speaker 3: Yeah, that's right. First it's a Celsius and then it's
Speaker 3: that Swedish fish flavored energy drink. That's like the transition.
Speaker 3: But actually, on a more serious note, the thing I'm
Speaker 3: really getting at is like how much does the algorithm
Speaker 3: of something like an Amazon affect your sales? And how
Speaker 3: much how much control do you have over something like
Speaker 3: the results that actually show up.
Speaker 4: I think the algorithm is based on the user preferences.
Speaker 4: But one thing, we're the number one selling energy drink
Speaker 4: on Amazon the most recent read, and we've been roughly
Speaker 4: around twenty share of the whole energy category on Amazon
Speaker 4: and perform extremely well. I think when you look at Amazon,
Speaker 4: you know, that's a really really loyal consumer base. You know,
Speaker 4: it's someone that's spending you know, over twenty dollars to
Speaker 4: purchase a twelve pack of warm beverage, that's going to
Speaker 4: take it home, have it shipped to their house, put
Speaker 4: it in a refrigerator, chill it, and then drink it as
Speaker 4: a daily routine or daily lifestyle. So I think that's
Speaker 4: a you know, a really loyal consumer base that's on there,
Speaker 4: and it's been a It really just shows you the
Speaker 4: loyalty that we have with the Celsia's portfolio that even
Speaker 4: with the distribution gains and the increased availability with our
Speaker 4: Pepsi partnership, we've been pretty much able to maintain our
Speaker 4: share numbers and growth trajectory on the Amazon. So it's
Speaker 4: like all tides are rising as we're distribution gains, showing
Speaker 4: that Celsius is aligned with today's health minded consumer that
Speaker 4: continues to evolve, looking for better for you, wants more
Speaker 4: at their lives, and most importantly about Celsius, our DNA
Speaker 4: is all about it helping you accomplish your goals and objectives.
Speaker 2: Let's talk about the branding element some more.
Speaker 1: So.
Speaker 2: Obviously you want to continue to grow and find new
Speaker 2: consumers of the beverage, but also like you have this lane,
Speaker 2: you have this sleek like sort of like pretty well defined.
Speaker 2: Can the fit people at the gym? How do you
Speaker 2: think about growing the brand? I looked in your recent
Speaker 2: quarterly call and you're talking about something with a Jake
Speaker 2: poll Fight, something with the MLS F one partnership. Talk
Speaker 2: to us about like that process of deciding like what's
Speaker 2: in the brand and what would be sort of like
Speaker 2: growth that might be costly because perhaps it's outside of
Speaker 2: what people know celsiusas.
Speaker 4: Yeah, I think when you mentioned Jake Paul and you
Speaker 4: mentioned MLS, we just also also partnered with Ferrari with
Speaker 4: that F one. I think you know, as we gain
Speaker 4: broader distribution and we're building out a broader consumer base,
Speaker 4: we're really important to us is keeping true to our DNA,
Speaker 4: which is fitness and we were just at the Arnold Classic.
Speaker 4: Familiar with that. It's the largest fitness show in the US,
Speaker 4: big supporters of that show. We had Arnold drinking a
Speaker 4: Galaxy Vibe at the event. It was a lot of fun.
Speaker 4: A ton of athletes were all about the athletes and
Speaker 4: the inner athletes. And I think when you look at
Speaker 4: like Jake Paul, Yes, he's massive influencer on social media,
Speaker 4: but he's also an athlete. He's boxing, He's going to
Speaker 4: be involved with the Olympics, he wants to be the
Speaker 4: number one boxer world champion. So really, CELSUS is there
Speaker 4: supporting him achieve his health and wellness goals. And then
Speaker 4: MLS is a great partnership for US. You got the
Speaker 4: World Cup coming to North America, so the timing of
Speaker 4: that could be great. You also have a young consumer
Speaker 4: base of fans and followers that are gen Z eighteen
Speaker 4: to twenty four and growing, and soccer you definitely need
Speaker 4: some essential energy. There are complete athletes that are always
Speaker 4: on the go, so we felt that was really aligning.
Speaker 4: We do align with health and wellness so that we
Speaker 4: will not run away from that or go in other areas.
Speaker 4: But to your point, maintaining the brand's authenticity is extremely
Speaker 4: important to us in order to stay relevant with our consumers.
Speaker 3: So I'm still on Amazon actually flipping through all the
Speaker 3: different Celsius offerings, and I see one thing that kind
Speaker 3: of catches my eye, which is a huge bulk pack
Speaker 3: of Celsius with fifteen flavors. And You've touched on this
Speaker 3: a number of times now, but you guys have an
Speaker 3: extraordinary array of flavors and different options nowadays, and you've
Speaker 3: managed to do that, it seems like, without cannibalizing existing sales.
Speaker 3: And I'm genuinely curious how that works because in my mind,
Speaker 3: I'm buying one energy drink a day if that to
Speaker 3: be honest, And you know, I'll try new flavors, but
Speaker 3: like my volume of consumption just is isn't going to
Speaker 3: go up based on the availability of new types and
Speaker 3: flavors to me, So how does that exactly work? And
Speaker 3: I guess how do you weigh the opportunities at the
Speaker 3: benefits and the costs of launching and developing these new offerings.
Speaker 4: Yeah, I think when you look at the fifteen pack
Speaker 4: you're talking about, it's a variety pack. What we're seeing
Speaker 4: is our Celsius consumer is increasing their consumption, so you
Speaker 4: know a can or to a day, and you know
Speaker 4: to your point. You know some consumers you know like
Speaker 4: the watermelon or like the Cosmic Vibe, and we'll be
Speaker 4: loyal to a single flavor. But we're also seeing, especially
Speaker 4: with gen z As, they're looking for an experience. So
Speaker 4: we do have our Fruit Forward line with great, great
Speaker 4: fruit forward flavors, and then we have our Vibe line,
Speaker 4: which is an experience in every sip or a journey
Speaker 4: in every sip. We try to experience with the consumer.
Speaker 4: But when you look at flavors, I mean, flavor innovation
Speaker 4: is really exciting, so it's one thing we lean on.
Speaker 4: We do see our consumers stay within the portfolio, so
Speaker 4: we try to harmonize the flavors. So we do have
Speaker 4: similiarity within the lines our Core and our Vibe as
Speaker 4: well as our Celsius Essential line. So when you look
Speaker 4: at the flavor profiles, some of them will be in
Speaker 4: and out gaining trial and bringing new consumers into the portfolio.
Speaker 4: We do have about a top five flavors. Actually orange
Speaker 4: is our number one flavor and when you go into
Speaker 4: the vibes, our Peach Vibe is one of our top
Speaker 4: flavors as well as tropical vibe.
Speaker 2: What's your favorite flavor.
Speaker 4: My flavorite flavor. I just had a lemon lime flavor.
Speaker 4: I had that with lunch. It was super refreshing. It's crisp,
Speaker 4: tastes like a starry or sprite. Really. That's one thing
Speaker 4: we see with Celsius which is interesting, is there's a
Speaker 4: usage occasion historically for energy drinks, right it's a specific
Speaker 4: need state. It's usually early in the morning or right
Speaker 4: in the afternoon after lunch. But what we're seeing with Celsius,
Speaker 4: especially with the Pepsi partnership, further opened up this opportunity.
Speaker 4: They've expanded us into food service, so we launched into
Speaker 4: Jersey mics just went into actual dun Dunkin Donuts as well,
Speaker 4: almost three thousand stores at Dunkin Donuts. But what we're
Speaker 4: seeing is the Celsius consumer is consuming Celsius with a
Speaker 4: meal as well during lunchtime, so that could be a
Speaker 4: sandwich of salad and so on. And what we also
Speaker 4: see especially at retailers, and retailers love to hear that
Speaker 4: you know, you're not an appetite suppressant, and what you
Speaker 4: historically have seen with energy drinks traditional is that it's
Speaker 4: more like an appetite suppressant. They're not buying other items
Speaker 4: with your food items traditionally with their energy product. But
Speaker 4: what we see with Celsius, we are also seeing it
Speaker 4: paired with foods and snacks. So we're really incremental to
Speaker 4: the retailers offering additional dollar ring and items per basket.
Speaker 3: Wait, wasn't there a rumor that Celsius contains like a
Speaker 3: weight loss chemical that you also find in nozepic. Didn't
Speaker 3: that like start like there is a perception that this
Speaker 3: is in fact an appetite suppressing beverage.
Speaker 4: Yeah, I'm not sure where that came from. There was
Speaker 4: some chatter on TikTok or something around that line, but
Speaker 4: I will say on exempit when you're on that way
Speaker 4: loss product, you really you know, you're not taking in
Speaker 4: as much calories, so you really need some energy and
Speaker 4: there's probably no other better energy drink to consume than Celsius.
Speaker 4: Because of the zero sugar, we're low in the glycemic index.
Speaker 4: We also there's an additional vitamin sup.
Speaker 2: There's a form of commodities that we never talk about
Speaker 2: on the show, and that is like the commodity market
Speaker 2: for all these vitamins, vitamin getting, vitamin B twelve or
Speaker 2: vitamin C or touring or whatever it else. Can you
Speaker 2: talk about pricing on the input side right now and
Speaker 2: at the same time that all the other industrial commodities surge,
Speaker 2: What has been the trajectory of like inquiring these ingreded
Speaker 2: acquiring these ingredients for the drink And where do things
Speaker 2: stand right now from your perspective?
Speaker 4: You know, now it's much better than it was during COVID,
Speaker 4: that was for sure. But when you look at our
Speaker 4: Vitamin pact, you know we're gaining more scale and volume,
Speaker 4: so we're gaining more leverage. So although pricing has gone
Speaker 4: up because of the increase in volume, we're able to
Speaker 4: offset some of that based on scale. The biggest challenge
Speaker 4: we had prior was actually the cans because of the aluminum.
Speaker 4: As an example, during COVID, there was basically a can
Speaker 4: shortage because everyone moved away I guess from fountain drinks
Speaker 4: and just started buying more cans. I guess, you know,
Speaker 4: no more I guess draft beer and you know whatever
Speaker 4: else we were buying at restaurants. Now we had to
Speaker 4: buy can products and have it at our house, so
Speaker 4: that put a major constraint on the can manufacturing to
Speaker 4: the point that can manufacturers were basically over sold and
Speaker 4: couldn't produce our cans. We actually had to work with
Speaker 4: some of our partners in Europe and around the world
Speaker 4: to source cans and actually wound up having to import
Speaker 4: cans United States, which is a something that we weren't
Speaker 4: ready for. When you start to deal with importing charges
Speaker 4: and de merge charges, which I didn't even know what
Speaker 4: that is, but that's when your product has to sit
Speaker 4: at port and if you if for some reason it
Speaker 4: was shipped with a non union worker, then the barge
Speaker 4: or container you had couldn't get loaded on a truck.
Speaker 4: It was we learned so much or so I feel
Speaker 4: really bad for our supply chain. They went through a
Speaker 4: lot of all the dues and don'ts, and we mainly
Speaker 4: learned a lot of don'ts on what you do when
Speaker 4: you're importing product, which is materials, which is extremely difficult.
Speaker 4: So a lot of key learnings there, but that was
Speaker 4: probably the most difficult time we did source cans. We
Speaker 4: were in a position where we could that kept us
Speaker 4: to have that allowed us to have product on shelf
Speaker 4: when many of our competitors were wrapping cans. I don't
Speaker 4: know if you saw even some some cans today. If
Speaker 4: you're out and about and you look, you'll see some
Speaker 4: cans have like a plastic wrap around them. Number One,
Speaker 4: there you can't recycle them, so that's not good for
Speaker 4: the environment. But number too as well is they're really
Speaker 4: expensive to produce. So that was a really difficult challenge
Speaker 4: in time for a lot of companies, and pretty strategically
Speaker 4: with our partners, were able to find cans so we
Speaker 4: didn't have to deal with the wrap cans that were
Speaker 4: out there during COVID. You still see like smaller brands
Speaker 4: do it today just because they don't have to scale
Speaker 4: for the large runs.
Speaker 3: Since you brought up packaging and the cans themselves, I
Speaker 3: did notice in your most recent results you talked about
Speaker 3: profit margins being up primarily because packaging costs have gone
Speaker 3: down since the crisis. So supply chains starting to normalize,
Speaker 3: maybe some commodity prices are starting to normalize as well.
Speaker 3: When do you decide to pass those savings on to
Speaker 3: consumers and more generally, I'm always just very very interested
Speaker 3: in how these pricing decisions get made, like, what are
Speaker 3: the factors going into them? Is price something that you
Speaker 3: have to negotiate with distributors as well. I imagine they
Speaker 3: take some sort of cut, so if they want more,
Speaker 3: maybe you're tempted to raise price, says, But how does
Speaker 3: that all work?
Speaker 4: Well, you know, it's really difficult environment because costs are
Speaker 4: going up, but then we're trying to offset them strategically
Speaker 4: as well, so it's a constant battle. You have gas prices,
Speaker 4: aluminum prices, labor costs as we all know, have gone
Speaker 4: up as well, and then also you know a lot
Speaker 4: of times inefficiencies within our supply chain is difficult as well.
Speaker 4: We have a model that we are building out as
Speaker 4: we further scale, and we're calling it an orbit model.
Speaker 4: And what that orbit model means is that we'll produce
Speaker 4: the product in a region, we'll source the product materials
Speaker 4: in a region, we'll build the product in a region,
Speaker 4: and then we'll sell the product within the region. And
Speaker 4: what that does that allows you to be more efficient
Speaker 4: in your freight rates. That's probably the biggest area we
Speaker 4: have in savings is really being able to be more
Speaker 4: strategic with our freight and trucks and shipping versus as
Speaker 4: an example, when you're smaller you're shipping from say North
Speaker 4: Carolina all the way to la right just because you
Speaker 4: just you can't produce the product in multiple market just
Speaker 4: due to the limited run sizes that require that you
Speaker 4: know that are just you can't run. You need to
Speaker 4: have a certain size run of product in order for
Speaker 4: it to be advantageous for co packers. So those are
Speaker 4: things we're working on in regardless to pricing. You know,
Speaker 4: that's a a channel strategy, it's pricing promotional strategies. The
Speaker 4: categories is are very promotional, so it's twenty six weeks
Speaker 4: on a year on average, is you're on deal or
Speaker 4: on promo. So it's really trying to work strategically to
Speaker 4: be able to be at the right price to maintain
Speaker 4: your your distributors' margins, your retailer's margins, and still be
Speaker 4: attractive for the overall consumer based on the pricing architecture
Speaker 4: within the category and space and channel you're operating in.
Speaker 2: So you mentioned copacking, so right now, do you have
Speaker 2: your own canning facilities or do you Well, how does
Speaker 2: that work?
Speaker 4: No, we don't. We use some of the best can
Speaker 4: manufacturers in the US, which is some of the largest
Speaker 4: brands in the US are producing at those same facilities.
Speaker 2: At what point do does it make sense for a
Speaker 2: beverage company to own its own canning operation? Like when
Speaker 2: does does Red Bull do they do their own can
Speaker 2: Like at what point does that kick in?
Speaker 4: Each brand's somewhat different on manufacturing, so, you know, I
Speaker 4: think that needs to be made up by each brand
Speaker 4: individually based on where your volume is. Also, you know,
Speaker 4: running a plan is a totally different animal as well, right,
Speaker 4: I mean that's there's a lot more involved. You know,
Speaker 4: they run three shifts, twenty four hours a day, seven
Speaker 4: days a week. It's a different margin profile as well.
Speaker 4: So I think you need to really look at who
Speaker 4: you want to be, what are the margin requirements of
Speaker 4: your investors with the margin requirements of your business, and
Speaker 4: and really make those strategic decisions accordingly. So when we
Speaker 4: look at our model, our model is an asset light model,
Speaker 4: so we don't currently own, you know, any manufacturing facilities
Speaker 4: or really truly a sales and marketing machine.
Speaker 3: So one other thing that's happened recently is you've been
Speaker 3: expanding in to international markets and specifically Canada in recent months.
Speaker 3: But how do you decide what markets to enter and
Speaker 3: what are the considerations that you think about there.
Speaker 4: Well, you know, we operate in the energy category, so
Speaker 4: number one, we're going to look at markets on size
Speaker 4: a price, so you know, how big is the category,
Speaker 4: what is the opportunity, what is the strategic path to
Speaker 4: distribution and to the retailer? What is the you know,
Speaker 4: the right margin profiles? Is there is there an opportunity
Speaker 4: to make the required margins we need as an overall business.
Speaker 4: So you're looking at, you know, market data understanding what
Speaker 4: type of market it is, how much share can you
Speaker 4: potentially source in the category, how many new consumers potentially
Speaker 4: with our Celsius position can we bring in a more
Speaker 4: size of prize, What is the route to market? How
Speaker 4: is you know, the retailers acceptance of the product, Do
Speaker 4: you have the right distribution partner and the acceptance there?
Speaker 4: So that's kind of that We constantly go through those
Speaker 4: processes internally on identifying markets. And you look at the
Speaker 4: energy drink markets, you know, you're really it's the US,
Speaker 4: it's the U, it's UK, it's going to be Australia,
Speaker 4: it's going to be Japan, Germany. So those are some
Speaker 4: of the biggest energy drink markets in the world.
Speaker 2: John Fieldley, CEO and President of Celsius, thank you so
Speaker 2: much for coming on and helping us continue our journey
Speaker 2: of understanding this market. Really appreciate you taking your time
Speaker 2: to break things down.
Speaker 4: Excellent. Thank you very much. Guys, glad to be here.
Speaker 2: No, I'm not gonna have to I had my I
Speaker 2: had my Celsia today. I'm not having a second one.
Speaker 3: I'm already on a cosmic journey, so i only need
Speaker 3: one today.
Speaker 2: Tracey, I really, I really enjoyed that conversation. It's interesting
Speaker 2: to think, you know, there's actually a lot in there
Speaker 2: that speaks to the things we care about. It's interesting
Speaker 2: to think about, like the idea of like freight and scale, right,
Speaker 2: and so if you and I started an energy drink company,
Speaker 2: we probably would just be working with like one copacker
Speaker 2: right somewhere in the Carolina is. We would be paying
Speaker 2: a lot in freight if we wanted to sell to
Speaker 2: the Los Angeles market.
Speaker 4: Yeah.
Speaker 2: Absolutely.
Speaker 3: The other thing I think about is just the importance
Speaker 3: of the distribution channel, especially in something as competitive as this.
Speaker 3: And I'm sure if we did start our own energy
Speaker 3: drink we would be begging Pepsi or Coke to be
Speaker 3: our distributors. And I'm still I still wonder how those
Speaker 3: conversations go, because, as John described it, you know, there
Speaker 3: is that chicken and egg problem where you want to
Speaker 3: be able to prove that you can sell a lot
Speaker 3: of volume, but then in order to do that you
Speaker 3: do need the distribution channel, it sounds like, and it
Speaker 3: was interesting also to hear him kind of describe that
Speaker 3: they go about it in an almost grassroots way, where
Speaker 3: you start out kind of local in order to prove yourselves,
Speaker 3: then you build up. I hadn't realized just how I
Speaker 3: guess specific some of those decisions and relationships.
Speaker 2: Are everyone listening, You should just google the word planning.
Speaker 2: Oh yeah, because as soon as you see it, it's like,
Speaker 2: oh it suddenly it clicks that these huge walls of
Speaker 2: whatever product, whether it's beverages, whether it's detergent, whether it's toothpaste,
Speaker 2: whether it's chewing gum, et cetera. It's like, that's not
Speaker 2: thereby accident. And I guess that's obvious because nothing is
Speaker 2: by accident in business or the corporate world or what's
Speaker 2: on the But still it's like a reminder, like all
Speaker 2: of those things like down to down to like the
Speaker 2: height at where it is and decide. I think you
Speaker 2: use that term like billboarding with in target, it's one
Speaker 2: thing like if you have two types of Celsius flavors
Speaker 2: in the target, you just walk right by it, right,
Speaker 2: But if you have five, and if you have five
Speaker 2: in a road, that's like, oh oh, there's something here
Speaker 2: that actually catches my eye within the wall of colors.
Speaker 2: And so the fact that like you like fight that
Speaker 2: that each one of those actually like expand your ability
Speaker 2: as well as like is really fascinating and not something
Speaker 2: I had thought about. But I guess I'm not surprised
Speaker 2: that there are people that are like, this is their
Speaker 2: job to think about exactly this question.
Speaker 3: Well that's also I guess why the market keeps growing
Speaker 3: and not self cannibalizing, because you see these massive displays,
Speaker 3: or you have one fridge that's full of just Celsius,
Speaker 3: and while I do not personally decide to pick up
Speaker 3: like three different cans or flavors, maybe someone else does.
Speaker 3: So you grab one and another one looks interesting, whether
Speaker 3: it's cosmic vibe or something else, so you just grab
Speaker 3: a bunch.
Speaker 2: Tracy, if we launch an energy drink. I volunteer to
Speaker 2: be that person and just like with like give out
Speaker 2: free Dixie cups or you know, like stand there at
Speaker 2: the grocery store with like a little like wearing a
Speaker 2: little like odd Lots apron. I thought you were going
Speaker 2: to say, I want to try it. I thought you
Speaker 2: could do that.
Speaker 3: I thought you were going to say that you volunteer
Speaker 3: to try all the different flavors and be the guinea pig. No,
Speaker 3: I was gonna say, I don't do that.
Speaker 2: I just want to be the person standing there's like, oh,
Speaker 2: would you like to try this new odd Lot flavored
Speaker 2: y because you gotta figure like it's got to start somewhere, right,
Speaker 2: And I was like, oh, it's pretty good, and then
Speaker 2: you smile and move on, and maybe one out of
Speaker 2: twenty people actually buys one.
Speaker 3: Amanda, you know the other thing I was thinking about.
Speaker 3: You asked about the sort of relatively lesser known commodity
Speaker 3: prices and specifically vitamins, And that's something I have thought
Speaker 3: about ever since I read this book way back in
Speaker 3: the day. And the reason I remember is because it
Speaker 3: was the first book I ever read on Kindle, and
Speaker 3: it was called Twinkie deconstructed that sounds good. And it
Speaker 3: was so interesting because it basically went through all the
Speaker 3: ingredients in a twinkie and did like a whole chapter
Speaker 3: on specific chemicals or minerals or obviously more generic ingredients
Speaker 3: like wheat or whatever goes into it. And it was
Speaker 3: so interesting because like you kind of just assume vitamins
Speaker 3: like appear in pill form, but of course there's this
Speaker 3: whole industry attached to it. There's a lot of debate
Speaker 3: about where they come from, whether or not the absorption
Speaker 3: process actually works, and that's something that I kind of
Speaker 3: wonder about as I'm drinking the celsius, like how much
Speaker 3: of these vitamins am I actually absorbing? But that would
Speaker 3: be a whole other episode. I think the vitamin industry.
Speaker 2: Absolutely and we've never done a vitamin episode as far
Speaker 2: as I know. I just think, like, you know, there's
Speaker 2: just a lot of market power questions in this whole conversation,
Speaker 2: and so, for example, like I am interested in it's
Speaker 2: like okay, like you sign a deal with Pepsi and
Speaker 2: then they're one term under some set of terms, and
Speaker 2: then ten years later or whatever it is, you're a
Speaker 2: much bigger company and you're much bigger brand, and maybe
Speaker 2: you can like play like you know, Pepsi and coke
Speaker 2: off of each other or Pepsian whoever else. And so
Speaker 2: it's interesting to think about like these sort of market
Speaker 2: power questions. And then there's the power of like who
Speaker 2: has the co packing facility to actually make cans and
Speaker 2: fill beverages. It's sort of interesting to think about, like, Okay,
Speaker 2: like I don't know how much I paid for this Celsius.
Speaker 2: If I pay like a dollar forty nine or a
Speaker 2: dollar ninety nine for a can of Celsius, like how
Speaker 2: much is Pepsi's cut, and how much which is the
Speaker 2: copackers cut? And how much is the pure marketing And
Speaker 2: it's interesting that like, you know, for now, Celsia is
Speaker 2: like they really just want to be a marketing company,
Speaker 2: but presumably at some point or assuming at some point
Speaker 2: there is value in like owning your distribution and charging
Speaker 2: others rent on your distribution network and so forth. And
Speaker 2: so I think there's just a lot of very interesting,
Speaker 2: uh sort of market concentration and market power questions that
Speaker 2: arise of thinking of like of that you can examine
Speaker 2: through on specific category totally.
Speaker 3: And we touched on this in the previous episode with
Speaker 3: Mark aster Can where we asked, well, why don't Pepsi
Speaker 3: and Coke just start their own energy drip?
Speaker 4: Yeah?
Speaker 3: Right, right, because they have lots of money, presumably they
Speaker 3: have entire departments devoted to developing new products. It seems
Speaker 3: like they could theoretically do it. But I believe his
Speaker 3: answer was that while a lot of these products are
Speaker 3: extremely specialized, and it's easier just to strike a deal
Speaker 3: and then take a cut. But again it goes to
Speaker 3: those sort of like concentration and power points that you
Speaker 3: just brought up. All right, well, we have had a
Speaker 3: lot of caffeine. Should we leave it there?
Speaker 2: Yeah, let's leave it there, because I made it through
Speaker 2: this whole episode so far without spilling on my keyboard,
Speaker 2: so let's leave it there.
Speaker 3: Congratulations, Thank you. All right, this has been another episode
Speaker 3: of the Audlots podcast. I'm Tracy Alloway. You can follow
Speaker 3: me at Tracy Alloway.
Speaker 2: And I'm Joe wysnant Thal. You could follow me at
Speaker 2: the Stalwart. Follow our producers Carmen Rodriguez at Carmen Erman,
Speaker 2: dash O Bennett at Dashbot and Kilbrooks at Kilbrooks. Thank
Speaker 2: you to our producer Moses On. For more Oddlots content,
Speaker 2: go to Bloomberg dot com slash odd Lots, where you
Speaker 2: have transcripts, a blog, and a newsletter and you can
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