Aluminum ‘has been very difficult to come by’: Celsius CEO

Celsius CEO John Fieldly joins Yahoo Finance Live to discuss the energy drink market, keeping up with consumer demand, inflation and supply chain challenges, and how an aluminum shortage affected his company's can production.

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AKIKO FUJITA: Momentum is heating up for global energy drink company, Celsius Holdings. It's come a long way since its initial listing on the NASDAQ. The company celebrated the fifth anniversary of that milestone this week. Let's bring in the CEO of Celsius Holdings. We've got John Fieldly. John, it's great to talk to you today.

We're coming off of several weeks of these earnings calls, where companies have really highlighted the challenges that you're facing on additional costs, raw material issues. You recently highlighted something that I thought was really interesting, a key component of your drink, aluminum, and what you're up against on that front. I wonder if you can talk a bit more about the challenges there.

JOHN FIELDLY: Yeah, no, absolutely. And thanks for having us. We're a great milestone for the company. Just like any company out there today, we're all seeing difficulties in the supply chain, inflation. But most importantly, in aluminum, you are seeing aluminum prices.

Really, they were sky high just a few-- really, a few months and quarters ago. We're starting to see that pricing come down a little bit. But when we look at where Celsius is, as a company, as an organization, when you go back almost 12 months ago, there was a lot of disruption in the canned business, when you look at the cans we have.

And we made a strategic decision to make a strategic purchase. And we bought a lot of cans on spot rates. So we're in a really good position on inventory right now, versus a lot of the competition that's out there. But aluminum has been very difficult to come by, especially the cans.

BRIAN CHEUNG: Hey, John, Brian Cheung here. You rang the opening bell at the NASDAQ today. Fifth anniversary of your initial listing, which means that your company is a Gemini, so is mine. My birthday was this week, but I wanted to ask you just about your company itself. For people that aren't familiar with the Celsius brand-- no sugar, no high fructose corn syrup-- what is the demand for your drink right now, which I understand might be something that people want to drink on the way to the gym?

JOHN FIELDLY: Yeah, no, absolutely, Brian. It's been exciting. Over five years now on NASDAQ, exciting time. We are a better for you energy drink. We have seven essential vitamins powered by green tea. We are a thermogenic clinically proven to burn calories and body fat. Tastes great, [INAUDIBLE] proposition, and gaining steam all across the country. We're in 140,000 locations.

And we are seeing massive, massive opportunities. This health and wellness trend that we've been talking about for over five, 10 years, is a mega trend right now. And that's what Celsius is all about-- living fit, living healthy, and living life. So, very aligned with today's health-minded consumer.

AKIKO FUJITA: Yeah, and I wonder what you're seeing or how you see those trends translating, even outside of the US as well. I mean, certainly, you've seen growth on that front. But can you speak to the international opportunities you're seeing?

JOHN FIELDLY: Yeah, I mean, the same opportunities we have in the US, which we're now a number four energy drink, which is really exciting. And latest scan data has us growing higher-- right around triple digit growth rates. When you look at international, those same health and wellness trends are global trends that we're seeing. So COVID has really changed the way we all think. What we're putting in our bodies, we all want better for you. We don't want to sacrifice taste. We want more function out of the foods we consume. And health and fitness and wellness is so critical now and is really affecting all categories in food and beverage.

BRIAN CHEUNG: Yeah, by some measures, it's recently surpassing Rockstar Energy to become the number four drink. I wanted to ask what, in terms of growth sources, do you feel are going to be part of this company's future, in terms of other types of product lines, maybe getting out of the drink business? What do you see as Celsius's future?

JOHN FIELDLY: Well, it's interesting. I mean, right now, when you look at it, over five years ago, when you go back, we were fitness-- very much ingrained in the fitness community and heading into grocery. Now, with health and wellness trends continuing to grow, Celsius has broad mass appeal. We're the number two energy drink on Amazon. We just launched at Costco and doing extremely well.

And what we're seeing with Celsius, and it's powered by green tea and it's vitamins, we're seeing usage occasions for Celsius expand outside of the traditional energy drink category. So when we see a lot of purchases for energy drinks, it's almost like an appetite suppressant. You're seeing those purchases done in stores. We're incremental to the category.

And we're also seeing the new consumers, the Gen Zs entering the category for the first time. They don't want their grandfather's energy drink. They're looking for something that aligns with their health and wellness and their fitness goals. And that's what Celsius delivers on. So 50-50 male, female. We're really expanding the category. And the latest IRI scan data, which is the scans at the register, show that Celsius is contributing, our growth is contributing about 37% to the category. So really exciting times for the company, and we're just getting started.

AKIKO FUJITA: Finally, John, you know, you're a publicly listed company. Obviously, you're certainly not immune from some of the volatility that we've been seeing. And we've heard so many companies talk about reassessing their strategy moving forward, whether that's about reining in costs, focusing on profitability. I wonder what the conversation is within your company and how you're looking at this environment right now.

JOHN FIELDLY: Yeah, I think we're very unique. If you look at some of our peer group that's listed and publicly traded, Celsius, we have always been focused on profitable growth. So if you look at our most recent financials, we put up $133 million in revenue. We contributed $10 million of operating income. So we're really focused on positive EBITDA, positive income, and constantly driving ROI through the system. And that's where investors are rewarding these days, as we all know. They want consistent growth, good growth, but they also want profitability, which is so critical. And I think that's why we're getting rewarded.

BRIAN CHEUNG: Celsius Holdings CEO John Fieldly at the NASDAQ, thanks so much for stopping by. Have a great weekend.