Key insights
- Celsius shares declined following Costco's launch of a private-label energy drink, a direct competitor priced significantly lower. This intensifies pricing pressure in the energy drink market and poses a threat to Celsius, as Costco has been a key sales channel for them. The market views this as a bearish signal for Celsius's future growth and profitability.
Investing.com -- Celsius Holdings Inc (NASDAQ:CELH) shares fell around 7% on Tuesday after Costco Wholesale began selling a private-label energy drink that directly competes with the company’s products.
Costco rolled out Kirkland Signature sparkling energy drinks this week, offering a 24-pack for $16.99 in peach, orange, and tropical flavors. At roughly 70 cents per 12-ounce can, the Kirkland product undercuts Celsius significantly on price. Each can contains 200 mg of caffeine with zero sugar, matching Celsius’s profile.
By comparison, Celsius 24-packs sell for $37.99 online at Costco, or $1.58 per can for single-flavor options. On Amazon, 12-packs of Celsius cost around $19.98 for single flavors.
Shopper reviews on social media noted the Kirkland energy drink has a similar sparkling profile and taste to Celsius. The launch triggered negative sentiment, with shares trading in the $37-$39 range during Tuesday’s session.
The private-label threat is particularly notable given Costco has historically been a meaningful sales channel for Celsius.
The launch highlights intensifying pricing pressure in the energy-drink category. Celsius continues to expand through Pepsi distribution and recent acquisitions including Alani Nu, but now faces direct competition from one of its key retail partners at a substantially lower price point.
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