Celsius Holdings, Inc., the parent company of fitness energy brand CELSIUS, announced this week that it has raised $22 million in private investments from two global institutional investors.
Declining to name the investors, though calling one “Asia’s leading private equity firm,” CELSIUS president and CEO John Fieldly said the firms will help open doors for the brand’s international expansion through relationships with retailers and suppliers.
“They have a lot of relationships with key retailers around the world, in the grocery hypermarkets as well as specialty,” Fieldly said. “Their tentacles go pretty deep as well, going into suppliers of raw materials as well as some investment. So we’re in the early stages of that relationship, but we do see a lot of synergistic benefits that will be created and forged with these new partners.”
As part of the deal, CELSIUS will sell 1,437,909 shares of common stock at $15.30 per share. As well, six board members and CD Financial, LLC — an entity owned by the company’s largest shareholder Carl DeSantis — will sell an aggregate 1,307,189 shares at the same price. The CD Financial sale represents approximately 3% of DeSantis’ holdings, according to a press release.
Much of the funding, Fieldly said, will go towards working capital as the brand continues its global and North American retail expansion. He noted the company is focused on increasing cooler placements and will be adding to its sales and marketing team. A portion of the funds will also go towards restructuring a roughly $10 million bond, due in October, which the company incurred during its October 2019 acquisition of Nordic wellness company Func Food Group Oyj.
The investment comes as CELSIUS diversifies its channel strategy, seeking to grow its footprint in the gas station and convenience sector. This fall, the brand will add 2,700 Speedway stores nationwide, which the company anticipates will bring its total ACV north of 15%.
“The largest opportunity for us, and in energy drinks, is really the gas station convenience space, which is driving 70% of the [category] volume,” Fieldly said. “The latest data shows we’re growing at a 46.5% growth rate as of July 12, 2020 — and that’s going through COVID. So, you know, it just shows you the massive opportunity we have with CELSIUS.”
To date, much of CELSIUS’ North American strategy has focused on the natural and grocery channels as well as specialty gyms and health clubs, the latter accounting for roughly 20-25% of revenue. As the fitness channel has shuttered during the COVID-19 pandemic, Fieldly said the brand has focused on retaining those consumers by promoting CELSIUS in other channels, including drug and ecommerce.
Though in-person, experiential marketing activations were cancelled, CELSIUS partnered with Amazon to launch its Peach Vibe flavor this past spring and redirected marketing efforts towards social and digital channels, Fieldly said. He noted the new flavor launch is currently rolling out in retail and will add new accounts in the coming months.
Though still a comparatively small player in the energy space, Fieldly said CELSIUS has also benefited from the recent move by VPX Pharmaceuticals’ Bang Energy from Anheuser-Busch InBev DSD houses into the PepsiCo distribution system, allowing the brand to increase its nationwide distribution.
“We’ve been talking to these people trying to build a national network,” Fieldly said. “It’s exciting, the brands in a perfect place with health and wellness trends and the timing’s right for the doors to open. These distributors want another brand, they need a brand that turns and there’s not many brands that turn out there.”