Editor’s Note: Yesterday, energy drink brand Celsius announced it has entered an agreement to acquire competitor Alani Nu in a $1.8 billion deal. In the story below, Martín Caballero, managing editor for Brewbound’s sibling publication BevNET, dives into the narratives that started percolating following yesterday’s news, and contextualizes the potential impact of the deal, along with other recent moves in the beverage industry.
The first two months of the year have seen a flurry of transactions for brands like Spindrift, RISE Brewing Co. and Aura Bora, but the year’s first big M&A blockbuster arrived late yesterday: Celsius’ $1.8 billion bid (net $1.65 billion in cash and stock after $150 in tax assets) for Alani Nutrition has been accepted by Congo Brands, ending months of speculation about the future of the energy drink brand created by fitness influencer Katy Hearn. Together, Celsius and Alani Nu are expected to drive around $2 billion in sales across the combined portfolio – that’s if the two female-leaning brands don’t cannibalize each other first.
As we take in our first impressions of the deal, here are the threads we’re following:
Transaction: In terms of ripple effects, this deal may be a prelude to more consolidation; more specifically, we’re talking about the $863 million Keurig Dr Pepper (KDP) paid for a 30% stake in C4 maker Nutrabolt. “I’d be watching for KDP to correct the C4 Energy ownership/incentive misalignment that was caused by their GHOST acquisition,” said independent consultant Joshua Schall.
As noted in coverage by Jefferies, the price is around 3x sales from 2024, the same multiple that KDP paid for GHOST. “On the surface, the rationale for savings seems reasonable to us,” wrote analysts.
Distribution: Are independent distributors doomed to forever repeat this interminable cycle of hope and loss? You couldn’t blame them for thinking yes, judging by the sting of losing powerhouse brands like Bang (Monster), GHOST (KDP), C4 (KDP again) and now Alani Nu. And like before, the exit of a major player clears the way for smaller challenger brands to jump in and pick up the baton: the name Bucked Up ($50 million in sales, +52% volume y/o/y through Jan 2025) is just one that comes to mind.
For Celsius’ distro partner Pepsi, the expected addition of Alani on blue trucks (not yet confirmed) alongside Celsius and Rockstar gives it a broader energy platform to compete amidst rising consolidation; KDP, for example, has had early success appealing to female energy consumers with its ready-to-drink Blume product (via Nutrabolt partnership), but Alani represents a much bigger brand.
Future for Congo: Though it’s losing its top-performing brand (3D Energy also departed acrimoniously last fall), Congo Brands has a billion-dollar-plus war chest with which to rebuild. Left in the hands of “two young, aggressive entrepreneurs” in Trey Steiger and CEO Max Clemons, that money will likely be directed towards “finding and scaling new talent-led brand creations,” said Schall. One question is if Logan Paul’s troubled PRIME brand will be part of that potential revamp, or if it gets shopped around as well.