What the Celsius-Alani Nu deal means for beverage marketing

Celsius Holdings, noted for having first cracked the code of a gender-neutral energy drink, has now captured a pioneer of energy drinks for women, known for its influencer marketing. Celsius’ $1.8 billion purchase of Alani Nu, announced Thursday and expected to close in the second quarter, highlights the energy drink market’s growth into the mainstream, according to Celsius CEO John Fieldly. In a business that was once dominated by males who used energy drinks as a mixer or a video game accompaniment, Celsius used an association with fitness to build an audience that’s 50% men and 50% women. Alani Nu has specifically targeted women, using innovative flavors and branding to build a social following that is 92% female, Fieldly said while describing the deal during an earnings call and business conference following the deal. NextGen Marketing Summit Join us for a crash course on Gen Z, DTC marketing and the creator economy Register today “The Alani Nu brand has a very, very unique consumer base, which is incremental to our overall portfolio and complementary to Celsius,” Fieldly said. “It’s targeting a younger female consumer that is really aspirational.” Alani Nu was founded in 2018 by fitness influencer Katy Hearn, who goes by her married name Katy Schneider today. The brand has grown through a collegiate ambassador program, partnerships and a social media following of 1.2 million on Instagram and 535,000 on TikTok. Alani Nu has collaborated with social media star Addison Rae and Kim Kardashian, with whom the brand released a limited-time energy drink called Kimade. Celsius has had similar success recruiting influencers on campuses and elsewhere, with about 3,000 brand ambassadors presently, Kyle Watson, chief marketing officer of Celsius, said during a presentation Friday at the Consumer Analyst Group of New York conference, known as Cagny. “Our brand is socially and culturally strong,” Watson said. “We’ve developed a robust influencer program that has played a major role in building this brand to where it is.” Also read: Marketing winners and losers Removing a threat But the deal is also about taking out a competitor, said Duane Stanford, publisher of beverage industry trade publication Beverage Digest. He said Alani Nu until now had been a “threat” to Celsius, noting its faster growth over the last year indicated to him it was winning customers from Celsius. “It’s a brilliant deal,” Gary Stibel, founder and CEO of New England Consulting Group, told Ad Age. “Celsius’ comeback is a marketing story in itself, but taking out a brand that’s growing even faster and is a direct competitor makes even more sense. Did they pay too much for it? Damn right they did. But this is an acquisition that will prove to make sense.” Celsius is the third largest U.S. energy brand behind Monster Energy and Red Bull. It grew volume by 38% through the first three quarters of 2024 and now controls 10.6% of the market, Beverage Digest figures show. Alani Nu is the fifth-largest energy drink brand, behind PepsiCo’s Rockstar. Alani Nu had a 3.5% share and grew volume by 62.7% through the first three quarters of 2024. Both Celsius and Alani Nu have been gaining on bigger brands. Monster Energy, with a leading 30.9% market share, saw volume dip by 1.9% over the first three quarters of 2024. Red Bull also lost share, with volume down by 3.8% and share down to 25.4%. Earlier this month Red Bull ran a Super Bowl ad in a bid to gain new attention during the year's most-watched TV event. PepsiCo is a minority owner in Celsius and has a distribution deal with the brand. Fieldly said it was too soon to discuss how Alani Nu would fit into distribution plans. Fieldly said the prospect of the sibling brands cannibalizing one another was “fairly low,” noting differences in their positioning. The acquisition helps its portfolio expand beyond Celsius’ traditional strength in fitness and traditional fruit flavors to a more approachable proposition with more innovative flavors. Alani Nu's energy drink flavors include Pink Slush, Cherry Slush and Orange Kiss. It also markets a line of wellness products that include energy sticks, protein shakes snacks and more. “Alani is really giving us an opportunity to have a portfolio that speaks to these growing trends of nostalgia, candy-like flavor profiles and fun,” Watson said. On social media, consumers not only follow Alani Nu but are familiar with Katy Schneider and her husband Haydn. Posts in the aftermath of the acquisition announcement expressed a mix of happiness for the couple and worry that a new corporate parent could change the flavors or interfere with the vibe that made their drink a favorite. @sydneysimss Celsius bought Alani Nu #celsius #alani #alaninu #energydrinks ♬ original sound - Sydney Sims “As Alani Nu enters this next chapter with Celsius, I have full confidence that they are the best partner to enhance Alani Nu’s growth and success while staying true to what makes it so special,” Katy Schneider said in a press release. “I’m incredibly proud of everything we’ve built and beyond grateful for this amazing community who made it all possible.” Alani Nu’s spectacular exit is one indication its proposition was not easy to replicate. Celsius’ Alani Nu deal indicates it was more comfortable acquiring the fast-growing competitor rather than trying to incubate a challenger. That approach stands in contrast to big soda companies Coca-Cola Co. and PepsiCo, which have chosen for now to battle runaway leaders in the functional soda space—Poppi and Olipop—by developing their own prebiotic soda brands. Coca-Cola’s Simply Pop was released earlier this week; PepsiCo is expected relaunch Soulboost with a prebiotic formula shortly. Stibel was skeptical about the new launches from the big companies. “Don’t believe for a second they haven’t talked to [Poppi and Olipop] or looked at them,” he said. “It’s not uncommon to attempt to create a fresh new brand, but Coke and Pepsi history isn’t great.” In his Cagny remarks, Fieldly said he was bullish on the larger energy drink category, and more specially on Celsius, which he said was riding the wellness trend and benefitting from changes in how consumers shop for energy drinks. Where consumers traditionally bought a single serving with a specific task in mind, today’s shopper is buying cases or multipacks. “What does that mean? That means that consumers are stocking up on their energy drink offerings and becoming part of that pantry purchase that when you’re part of the pantry, you're part of the household, that means you’ve gone mainstream,” Fieldly said. “The opportunity to continue to grow within the energy category is massive.”

What the Celsius-Alani Nu deal means for beverage marketing

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