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0:00:03 - Brian
All right, what's up everybody, and welcome back to another episode of why Brands Work. I'm here with Will, as always, and I'm Brian. We're both the co-founders of Flow Candy and your hosts today, and we've got a cool one for you, one that's very close, near and dear to my heart. Actually, I am an extremely regular consumer of this product. Um, I actually have some right here. It's uh selfie. 

0:00:28 - Will
Let me get into it. 

0:00:29 - Brian
Let me hope I'll say yeah look uh, people, both uh, crack one open for this episode. Oh nice, what flavor are you? Is that the mango passion fruit? He's junea, it's not the carbonated one. Oh, the non-carbonated. Okay, same, I've got a peach vibe here today. Cheers, not my Cheers. But we actually have a pretty funny story about we discovered Celsius at the same time you and I did, I think, right At the Mastermind. We went to don't know, maybe you were drinking it before that. 

0:01:11 - Will
I think I had only stopped. It was like this Kenny style thing. It was like sparkling ice tea, you know right. But then it really started to get. It was around that time like he COVID or right before COVID maybe that I felt like his brand really started to get mainstreamed. 

0:01:33 - Brian
Yeah, totally yeah, it was. It was not on my radar at all until we, you know, we went to that 2x mastermind Shout out to 2X Austin and Tom great people. But you know, we went to a mastermind to meet up with other entrepreneurs and they just had a cooler full of Celsius, you know. Just tons and tons of them. I didn't really start, I didn't really take a look at how much caffeine was in these and I don't know if you remember, but I was just like chugging them back to back, if you remember, but I was just like chugging them back to back. And then I realized, oh my God, I probably have like a thousand milligrams of caffeine today after, after drinking. These probably need to slow down, but they're just that good. That's really what it comes down to. The flavors are great, it's all really really tasty, but you know, let's get, let's get back to the format. 

0:02:20 - Will
Why, you know why don't you walk us through why we should care about Celsius? I could talk the riff. This is still in. It's a crazy history. It's about a 20-year-old company. There's a lot we're going to unpack there. In the past five years, it's gone from $75 million in sales to $1.32 billion. That's one thing to look at, and just in the past two months too, I don't know how much money it is, but their market, their publicly traded company, their market cap, is in debt. They did collect from $22 million to $11 million. Their stock price is based on 90 bucks to 40 bucks, or 45 bucks or something like that. So those are the things to sort of start off from my eyes. 

0:03:23 - Brian
Yeah, there's just been this absolutely meteoric rise that you know from, from the ashes in a way. Uh, that's been pretty, pretty interesting, and so it from a from a background perspective. You know they're about 20 years old, I think they started in around 2004 or so and you know it's. They were trying to create this. What's the thermogenic is that the term for it Basically like a calorie-winning drink. 

0:03:55 - Will
They were trying to invent their own category. I think that's interesting too. They just got rid of um, which is it's like a risk-free type thing, you know. Obviously, if you could invent your own category, I would be the market leader the first one in that Like, there's huge, huge blue ocean sort of revenue potential there, but it's also really really hard to do that. But they originally tried to create this category of, like calorie earning drinks, drink that burns calories. Donerjuice is also the proprietary Net-A-Plus formula which they're still using that today, but that originally was what it was and the packaging is totally different too. 

0:04:44 - Brian
Yeah, I've seen some images. It's very, very different looking, um, and it did have some initial investment as well, which I found was pretty interesting, because it was actually, you know, the the investor was someone who had made their money in multivitamins. 

0:05:01 - Will
Um, yeah, so yeah, the call is on. My call as soon as this yeah, exactly there. So this guy comes in. I think he sold a. I'm gonna stop on the business rex all suck, which I never read. 

0:05:18 - Brian
When I saw it I was like, oh, I've seen it before yeah, the sundown, the sundown essentials or sundown naturals or whatever it is. You know it looks, looks very familiar to me. I think everyone would, um, everyone would recognize and they started and you know he sold that company in the 2000s and I think started it in the 80s as a like direct response, uh, vitamin supplement company. So people mailing in, you know mail order and that kind of thing, so deeply already kind of embedded in this like fitness nutrition category. 

0:05:50 - Will
Yeah, we sold it at the one point in Philly in the year 2000. Yeah, yeah, wow. So I'll be in like and that's what I. I don't know if that's true, but that's the research I saw. So, yes, I met. Uh, I think the story I read is by running by husband and wife, steve Ailey and his wife, in 2004. This guy called Cicentis is a local. They found him in like Boca Raton I think, south Florida. Carl was living, lived there too and came across his family office. They've invested in the company and through that, somebody in his family office. He came across his family office that invested in the company. Through that, some of his family office came across Celsius and became one of the first. 

0:06:36 - Brian
That's exactly what I thought as well. Yeah, I mean, he supported them through a lot of stuff, I think you know just kept on investing in the company over a decade. You know they got to the point of being listed on this new york stock exchange, um, you know, by the end of the 2000s or so, and then they just started crashing and, uh, you know just, they just couldn't find the traction there, um, eventually leading to them actually being delisted from from the nasdaq as well, and and having to, kind of like, go into recovery mode yeah, let's sell the nasdaq he listed, then the list is getting, so now we're, you know, probably traded again, but, um, really interesting, uh, what happened there? 

Yeah, let's talk about the rebound, let's get into that. So they're delisted. This is, I think, in the early 2010s, so like 2011 or so, and that's when Carl DeSantis just put in an entirely new leadership seat. 

0:07:45 - Will
Yeah, there's a couple guys that came in. This guy, jerry David, came in, known as a turnaround specialist in CPG, a vendor, and I came in. Kravitz and Dr Bailey came in too, as the CFLG is now their current CEO, so that gene came in around what do we? 

have here. I can't give you the exact year, but yeah, they totally changed. The whole entire strategy changed. You know, know, I have basically they. They really changed, moved away from this burn calorie sort of um, this burn calorie sort of angle, and it was more towards positioning, more towards energy drinks and living healthy. We can talk about this like how they're different than some of the other energy drinks in the market, yeah, but I think that was like a big shift that they made. They also changed their distribution. They nich changed their distribution. They niched down into a couple of key markets like California, texas, south Florida and really drilled down there. But yeah, I'm happy and I think Jerry also came in and got some key distribution in Asia. He got some key distribution in Asia. You got some good investment from people like Russell Simmons and stuff like that. This was all for either new IPO and everything but that, and that means that they totally turned that into this brand. 

0:09:41 - Brian
Yeah, yeah, no, I think the first thing you touched on there was moving away from a weight loss, you know, because that was kind of how they positioned themselves before. It was like a weight loss drink rather than a healthy lifestyle drink, because that's really what they are now around. This time is when they came up with their kind of slogan or mantra, which is Live Fit, and I think another key thing that I saw in one of the interviews that I read is that their initial goal around that time in 2012 or so was to actually focus on repeat customer acquisition customer acquisition so how do you build? You know they're they're. They had a goal and actually set a kpi of like 35 000 people. They were like we want to fill a stadium with people that drink celsius every day. So how do we get it to the point where there are 35 000 people drinking celsius every single day? Because that was actually their like profitability run rate. We need 35 000 people to be drinking every day for us to be able to uh, to be profitable here, and so that was like their initial kind of goal, and that led to a lot of kind of what you're talking about now. 

It's like niching down, getting into kind of like gyms being very specifically like focused around like almost a pre workout routine. 

But there was a lot of focus around that of like how do we make Celsius a part of people's routine? How do we get it in there, like this is kind of their vitamin supplement pre workout around? Those people that are that do want that boost. Because the reality of Celsius is it does give you you know there's a lot of of caffeine in it and it's got a lot of other vitamins and things like that it does give you a nice little lift and boost and mood boost as well, because it's got the taurine or marijuana or whatever in it. That also, you know, l-threonine too, which is like a mood boosting supplement as well, and so you know there's a bunch of stuff in there that really does kind of give you that jumpstart. And so they started just really niching down into who would use that and who could use that and focusing in on how do we get 35,000 people to make sure that this is their go-to beverage every single day? 

0:12:00 - Will
Nice, that's the basic supplement playbook kind of you know. 

0:12:04 - Brian
Yeah, exactly Get to something. 

0:12:08 - Will
Make sure they're consuming the crap. 

0:12:11 - Brian
Right, and John Fieldley says that he has routinely drank two Celsius a day for the entire time he's worked there. 

0:12:20 - Will
Wow, I could breathe. It's a runny jeans, it says on the can. Will I have a heart attack? 

0:12:28 - Brian
Yeah, it says on the can they recommend to not drink more than two servings a day. And actually I have a Canadian version because I'm in Canada right now, which, first off, I think that they have less caffeine. How much caffeine does your yours have in it? 

0:12:50 - Will
mine says two million milligrams, which is like yeah right, yeah, so I have mine. 

0:12:56 - Brian
It's the same type as yours, yeah, um, like the same size, and it only has 140 milligrams of caffeine in it. And my, it's funny because I've read this before on the American ones. It says only recommends one serving per day here. So obviously they're quite a bit more stringent on there. The Health Canada is a little bit more more strict on what they think you should be doing. Even have like a little warning label on the top there that says like high supplements or something like that, and then like a high caffeine content like warning I'm blurred, but you can't really see it there like high caffeine content on the bottom as well uh, none of us do it in the us no, definitely not. 

They also have very limited flavors here in in canada. Like I'm not usually a peach vibe guy, I like peach vibes, but um there's a bunch of other flavors that I prefer, but you can really only find like that orange and like kiwi guava here, so it's been a little bit disappointing we can talk about a big set, because I think they just started trying to expand your action and um, totally, but yeah okay, sidebar. 

Sorry, let's get back to the uh, let's um, all right, so where were we? We were talking about how they kind of turn this all around by focusing it on on these repeat customers, try to get more people to like, put this into their, into their um into their routine every single day, and so, yeah, let's actually talk about the product itself and why it works so well. 

You know, I mentioned some of these like different ingredients. We've talked about the high caffeine content. The other thing as well is that you know it's 10 calories. Yeah, that's the other a huge differentiator from like Monster or Red Bull. You know, I think a Red Bull, like a small one, is like 200 calories or something, because then there's like 40 grams of sugar in it or something like that. Um, you know, whereas here, obviously there's going to be like I don't know, does it have aspartame in it or anything like that? I think there is. Um, you know, there's definitely like fake flavoring and things like that in here, but it doesn't have nearly as terrible of ingredients as some like normal energy drinks, do you know? Like the monsters and the red bulls and the? Um, what else am I saying? You know those kind of drinks of the world? Um, yeah, and what else stands out to you in terms of the Celsius, of the product itself? 

0:15:26 - Will
Yeah. So the product needs. You know three core products here. There's the based on what we're doing, the originals and the buy. There's the essentials, this new line that they have out, and then there's the powders. I take it to the probably most I could find it, but I think most of their sales are coming from the originals in the aisle. 

And I think to me what stands out here is the CEO. They kind of thought about it. They're sitting on the crossroads of a couple trends. One is like low calorie fitness taste. It does taste better in, say, a Monster Energy Red Bull. There's lower calories. And it's decision-making too. It's decision and that lift fit. You know that sort of mission or whatever, or the timeline or the tagline. 

And I think where it's different I don't know if this is the product or this is the marketing, you know, but it's very it's positioning in a way that where it's much more gender neutral, I think that you know, I think it's something like it's an e-sflip. There's male and females that are drinking this. That's clearly not the case with Red Bull and Monstrous. It's very like Rogallion, extreme Sports Driven Punk Rock, and it's like much more of a masculine brand. This is physician lore. Literally all of them are gin and this is like right next to the protein groups and there's still a gin distribution and this is like right next to the protein you know um, in in their show, the gym distribution, um, and if you go into like a you know tahini store, it's definitely right next to the energy drinks. But, um, it seems like they have our. That tells the products of physicians differently and um, yeah, and they have, they are eating share in that category from last year. 

0:17:29 - Brian
Yeah, no, absolutely. I mean I before, before Celsius, I never really would have considered myself an energy drink person. Yeah, you know, and part of that is, you know, I don't think that. You know, you buy and interact with products that say something about you and I was like I don't like what holding a monster and drinking a monster says about me in my opinion. You know, that might be for some people, but that doesn't really fit my vibe right. 

Um, there was occasionally, you know, I would, I would drink a red bull if we're like going out or something like that. You know, that might be something, but it's not a, it's not something again that I would want to like have in my fridge at home. I'm not a person that's going to buy red bull and keep it at home but for some reason, celsius just fits, uh, fits who I, who I want to be, who I aspire to. Be sure, like I'm not the super fitness guy, but like live fit, all right, that fits a little bit better than like a sugary energy drink or something like that. Um, and you know the whole positioning thing that you mentioned there. 

There's a couple things. 

First and foremost, you know, one thing that I found that john said is that the one thing that we really did was try to understand who was drinking Celsius and why. 

And then how do we use that to create a foundation here on the show is that the more you understand who your customer is and how a product makes them feel, the better off you're going to be about attracting more people like that. Because if you understand the demographic really really well, if you understand who that audience of one is or however you want to say it, if you really can relate to who that person is and why they're drinking your product, you're going to be able to focus in your messaging and broadcast that, and all the people that are like that are going to start flocking to you. And I think that's something that Celsius has done really well. And you know you mentioned it before like they're in the gym right next to the protein shakes and stuff like that, whereas convenience stores yeah, they're in the gym right next to the protein shakes and stuff like that, whereas convenience stores, yeah, they're in the energy drink section, but have you bought Celsius from a grocery store at all? All of them. 

0:19:51 - Will
No, I haven't. 

0:19:51 - Brian
Okay, so it depends on the grocery store. Not all of them carry Celsiuselsius right, some of most of them do, in like some cases and things like that. But there are a few grocery store chains that actually have like, um, I don't know the retail term for it, but like celsius delivers them their own, like it's like a refrigerator built into a display. It's like an end cap. 

0:20:20 - Will
Yeah, it's a stand on the end cap. 

0:20:23 - Brian
Right, and it's fully. It's a refrigerator with just a Celsius in it and the banners on the side, and then a top shelf and side shelves with, like you know, they're not chilled or anything, they're just on the shelf. 

0:20:36 - Will
Yeah. 

0:20:37 - Brian
They're not chilled or anything, they're just on the shelf. But that end cap every time I've seen it has been in the pharmacy section or the health food section rather than on the drink section. So every single time they're getting themselves. Next to the health products, you have protein powders. Protein powders, cliff bars, celsius, you know, instead of it being like monster nos, prime celsius, no, you have protein powder really great, you know, for you snacks and things. And then here's your celsius as well, next to the meal replacement shake so it's another brand, virginian salsa, another tab exactly, yeah, exactly. 

If you find you know it's, it's really going to the next level to be able to. To get to that point, actually, the only one that I ever find in the like energy drink section is the essentials. Um, have you had one of the essentials? I'm not ends up, I'm not. They are actually like monster size cans, like they're bigger cans, and they have 270 milligrams of caffeine in them. They are aggressive. It's a great way to start a day, though, if you have like a bunch of stuff, so I will say that, um, they, uh, yeah, so that those they do carry, I get to see those in like a fridge. They, they. Those aren't as um popular either. They're not. 

They're not everywhere yet no, I just know you yeah you, you see him, if you know where to look for him and that kind of stuff it's just a lot of things. 

Literally this year it's filled with like it's like I can't think out when it's got like essential oils yeah, I think it still has the same, has the same, um, like yeah, honestly, I think they just put the slap, the name on being able to do a bigger one with more caffeine and nice, like yeah, so yeah, but that's, that's been the most you know. 

I think if anything in cap encapsulates why Celsius works, in my opinion, is that, like putting you know, whatever their agreement is with retailers and I don't know, you know we'll talk about Pepsi and their involvement a little bit here I don't know if they were able to help them kind of align this with the grocery stores and stuff, but the fact that they're strategically thinking we want to be in the pharmacy section, we want to be next to the health foods, next to the contact solution and deodorant, rather than, you know, in this like so in the soda aisle, because you know, I don't know about you, but I'm you're, you're very, you're very health conscious and so I'm sure, like when you're going through the grocery store, you just skip that aisle, you skip the soda and chips yeah pretty much. 

You know. Yeah, so it's like, exactly, it's a dirty aisle. You don't think that you don't want that, unless you're. You're probably running through real quick to grab your water, lose or whatever you know. But, um, but otherwise you know your skin. You're not looking at the chips, you're not looking at the soda, you're not looking at the nos and the prime and stuff or whatever, because we know they're just like sugary over the top drinks, whereas you're going to be buying protein powder, you're going to be buying, you know, some sort of protein bars or whatever. And so the more you can associate yourself with that, with that, with that vibe that you want to be a part of, or that movement that you want to be a part of, the more you're going to be able to latch on to it and kind of ride the coattails of the other products in the space. And so that's for me, far. 

You know it makes energy drinks clean. You know it takes the dirty out of energy drinks. It makes me feel like, okay, I can drink this every day and it not be detrimental to my health. If anything, it's actually making me healthier because I'm getting more vitamins. I'm getting more vitamins. I'm getting more. You know it's. I'm getting all the stuff that I wouldn't get from a cup of coffee and it doesn't make my you know stomach hurt because coffee can be so acidic and stuff like that sometimes. 

0:24:29 - Will
You know there's all these other benefits yeah, I'm going to get a very good observation. I didn't. I didn't know that because I've never seen them. I mean, I've seen them in retail but not like. I mean I've seen pictures of it but I haven't actually experienced it myself. Yeah, and it's always cool. I mean that's just like, again, a common thing in your city. Successful brands can range across categories. They really can just bring in all sorts of new customers. I don't know if you saw this. I think that the energy market is growing like energy-driven market, but 50%, and the parallel Celsius only has 11% market share and compared to Boston, that's 2080, I think maybe like 35 or 40. But all the growth in that category, over 50% of it, is from actual cell history. Yeah, so it's not surprising at all. There really isn't a lot of new people in it. 

0:25:33 - Brian
Yeah, because they're making it okay to drink an energy drink. They're making it socially acceptable yeah. 

Yeah, cause they're. They're making it okay to drink an energy drink. They're making it socially acceptable. Yeah, there's. You know there's no stigma around Celsius, it's all. It's actually more of a oh, you drink Celsius too, kind of thing, like, oh, I'm addicted to this stuff. You know, it's like it's the, it's the vibe of all the other people I've met that are that also drink celsius. Um, yeah, I mean, it's a, it's good looking, can too they're. They're. 

I think that's another part of it. You know they they spent a lot of time on their branding um, they've said that they want the like c and celsius to kind of like be um as ubiquitous as like starbucks or apple at some point, or, like you know, in in the same category as like the, the claw marks from monster, yeah, and so, yeah, I mean I think that they've. They're putting a lot of product development time into all of the different flavors as well. That's. The other thing is like they all taste great, even the flavors I don't like. 

I sometimes I'm like this is better than any flavor of monster I've ever had or anything like that, and and they're constantly coming out with new ones. You know they have the whole vibe series with the tropical vibe and the oasis vibe, um, astro, cosmic or whatever vibe there's, all you know. There really is kind of a flavor for everyone, um, which you know, as we've seen over and over again, the more you can kind of keep it new, keep it interesting, even as you get people, it's going to keep retention up even more and it's going to bring more people into trying for the first time and testing to maybe, you know, kind of gain that that uh, that uh repeat customer as well afterwards. 

0:27:23 - Will
Yeah, they definitely do a great job of product development, because all still is a types of flavors, you know. 

0:27:30 - Brian
Yeah, yeah. 

0:27:31 - Will
So yeah, well then you want to talk, you want to dive into the marketing here or where where are we marketing? 

0:27:38 - Brian
Yeah, let's, yeah, we we kind of touched on marketing a little bit there already, but let's, let's talk. So they're, they're obviously in retail. They have a lot of convenience store presence, they have a lot of grocery store presence and they don't. They don't sell DTC. Or did you buy DTC? Or did you buy through Amazon? 

0:27:57 - Will
Amazon they don't do D2c. Or did you buy d2c? Or did you buy through amazon? Amazon they don't do these yeah, they don't use it yeah, exactly. 

0:28:03 - Brian
So all the links on their site just take you directly to amazon, um, and you know something that's really interesting about this and you touched on this a little bit before. Uh, was that? You know they? They exploded through covid right and so um prior to covid, 2017 or so was when um was john right yeah, john fieldley took over as ceo. They did 36 million in 2017, so pre-covid and then 2023 was that number you said before of 1.3 billion in revenue that they did last year, and so you know John has come in a couple of interviews and said COVID was huge for us, and a couple portions of that are you know. One is the distributions that they were doing online. Um, so, yeah, we have amazon. They are one of the highest search energy drinks on amazon. It might be the highest search energy drink on amazon, um. 

And then, secondarily, which I found was really interesting, is that they were the first ever brand to sponsor the beverage section of instacart oh yeah, so they were they kind of like partnered with instacart really early um, during that uh, during the pandemic and everything, as instacart exploded and they were continually sponsoring that actual like beverage section where people go, and so they were getting a ton of discovery through instacart as people were moving online to purchase groceries and, you know, also at home, kind of doing their own thing, had more time to think about that kind of stuff they ended up being, they were, they were on the front page every time as people were going through ordering their groceries, so they got. They attribute a lot of their growth to, to that partnership as well. 

0:29:56 - Will
Nice, it definitely ranked number one for energy trade coins. 

0:30:02 - Brian
On Amazon. 

0:30:03 - Will
Yeah, 95,000 reviews compared to Monsters. And you can't hate reviews. Reviews don't always mean sales. But I'm just looking at news organically at the top here, not sales, get in and probably browse. I'm just looking at news organically at the top here, not so much Canadian Pride Brows, and yeah, they're ahead of 12 Packers, they're right ahead of Monster, yeah, and Prime and C4 and Rockstar, ghost Bang Bomb. All these other big players in the States Raze, yeah. But I don't even know. I went through their annual quarter. Amazon is only 7% of the revenue, hmm, yeah, 7% of the revenue for sender in, hmm, yeah, well, sevens to the remedy Uh, 12% actually. Actually, oh, remedy puzzle Tostin, um, which I have not been through. I don't know if I, I don't think I've seen any Tostin. I'll have to go and see where there is issues with Tostin. That'd be interesting. Um, yeah, and then I think 120% comes from their previous distribution. So the random distribution it builds up in Asia and the 7-Eleven and stuff, but over 60% of the revenue comes from this. 

The distribution yeah. 

0:31:43 - Brian
Yeah, and that's a huge partnership for them. We've talked about this before. With liquid death and things like that. That shelf space is very hard to get without some sort of uh you know foundation in it as well. So, being able to have pepsi as an investor I think they own like what? Eight percent or something like that. They invested like 500 million dollars, 50 million, okay, 50 million dollars, uh, so a few years ago, and having that kind of um you know, partner means that now every pepsi truck that's coming to deliver pepsi to grocery stores and stuff like that, is also delivering celsius and is there to help put up that signage and stuff that we were talking about in the in the different sections. 

And um, yeah, and then you're, then you're not kind of beholden to whatever you can scrape out, cause that was something that they mentioned before is that. You know, I can't remember the term for for it, but it's basically the like the warm shelf, I think is what they call it. You know you can get um, because Celsius is not in grocery stores, sold in the 12 packs and stuff like that that you get, that you get on Amazon. They're sold in individual cans every once in a while you might be able to buy like a 12 pack, like pallet but it looks like the pallet that the grocery store gets right and normally they're putting them out individually. And so when you, when you're starting out, they have that kind of warm shelf that we talked about. That's near like the water and the chips and the soda or whatever, and if you walk through there you'll see all the prime and the bang and the monster and they're all just individual cans but they're not cold, they're just sitting on the warm shelf, right. 

And something that they were saying is that early on, when they couldn't get traction is, you know, they had two, two flavors that were coming out right, so they have like two flavors. So that's just two little cans sitting on this entire warm shelf of all of these different cans with all this different branding and stuff going on. That you know, one of the one of the things that really helped them was a releasing all these flavors so that you get more of like a billboard because there's a. If you have five flavors sitting across of each other, you now have a bigger place on the shelf and then, secondarily you are, you get more prime placement if you're being positioned by pepsi, because pepsi owns the spots on the shelves and then essentially leases or distributes them based on their partners and whatever brands they're bringing as well. So you're not competing as a small person fighting against Pepsi. You get to lease some of Pepsi's real estate already on those shelves. 

0:34:30 - Will
Yeah, it was a game changer, you know, wow, and it really catapult to the revenue. Um, yeah and yeah, like not only the distribution in the store but also just that distribution through, through their carriers, or learning one, call their logistics the trucks that literally deliver, fighting for NASA's heart, and yeah, it's really it's. I would say do it and let Pepsi actually sit in the car, you know I don't know nothing about these deals but I was thinking, wow, 60%, that's it. 

Because technically, pepsi's the customer, they literally talk about it and they say, if you go through the risk section, losing Pepsi's the big risk, that would be huge, literally, you were asked at Redman we think about this as a public customer concentration risk. Yeah, there's a big column there. And again you lose that account. You're renting, you go from $3 million to literally $500 million, but it's good that they invested, because now they are literally invested in the brand. So it's due to the invested, because now they are we're really invested in the brand, you know. So it's not like they're just going to swap out celsius but some other, you know energy giant, this is the linda yeah, well, anything else you want to touch on with their marketing you think they're doing right? 

0:36:18 - Brian
uh, we didn't really talk about the events that they're doing. They are sponsoring a lot of sporting events and things like that. I think they have a nascar uh car, I think they have a formula one car or like, yeah, they're doing some sponsoring there. Um, I've seen a lot of like pickleball and like kind of tennis events and things like that on social media from them. 

0:36:42 - Will
Yeah, there's nothing really crazy that jumps out at the marketing. You know it's all. Like half a million visitors a month are coming to their site. Be kidding, Like 60, over 60 million revenue is coming from retail distribution. And they say this a lot with the CPG, the large CPG, the large CG brands. Like eventually, you know they're, they'll add new, they'll reach a scale in TTC and allow for others to do late bridge. 

0:37:11 - Brian
Yeah. 

0:37:14 - Will
So and that makes sense, but I mean nothing crazy. I know they're doing like a big. They do do some celebrity stuff. I know they're doing like a big. They do do some celebrity stuff. I think Charles Leclerc, the F1 driver, is in spots of Biden right now. I saw some stuff. It's interesting. Over 75 hours in the traffic is okay, so they're not doing a lot of big stuff. 

0:37:36 - Brian
Which is about looking at the weather, which makes sense. Yeah, it couldn't just be Celsius stuff. Which? 

0:37:39 - Will
is about looking at the weather, which is, yeah, it could just be Celsius. Yeah, or it could be a crypto thing. They would bankrupt. I don't know if you saw that. We've tried to investigate it, but I totally forgot about Celsius crypto. 

0:37:54 - Brian
Until I looked into it. Yeah, All the. 

0:37:56 - Will
Ponzi's. But yeah, I think that another interesting thing too is a lot of their social traffic comes from YouTube, but I can't really find any real driver traffic there. They only have one YouTube video, yeah. 

0:38:17 - Brian
I see them doing a lot of YouTube advertising. Yeah, I see them doing a lot of YouTube advertising. The reality is and we'll kind of use this as a segue into top reasons we think that are why this brand works a lot of over this season, um, of brands where the reason that the brand works is because of a celebrity or because of a viral marketing tactic or because of a um, you know just the sheer amount of content that gets created around like a certain brand or something like that. But I think celsius is a reminder for all brands and all operators and marketers that if you have a really good product, and you focus, really, really focus on product market fit and the positioning of the product with that good product. 

That is a recipe for winning. It might take 20 years. You really have to believe in it. You really have to kind of find that niche and listen to your customers and figure out who's drinking it or, you know, interacting with your product. But if you can find those people and you can really try to replicate the messaging that works with them and why they drink, drink it or interact with it, then you're going to be able to find success with a product. It might not be on the 1.5, 1.whatever billion dollar scale, but you can find success without a viral tactic, without an influencer, without some sort of you know endless content stream or whatever, if your product really is differentiated enough and positioned well yeah, okay. 

0:40:10 - Will
Well, let's, let's jump in. What are your three reasons? I guess the first one's positioning positioning. 

0:40:16 - Brian
Yeah, first one is positioning, um. I think the second is just uh, is taste? I think the product is great itself, um. And then third is like the habitual nature of it as well, like it has become, I don't drink coffee anymore, really yeah like my. 

I used to have like an afternoon coffee pretty regularly in my life. Now I have an afternoon Celsius. It's more convenient, it's more you know it's, it's it's. It feels a little bit more refreshing than drinking like an I don't know an iced coffee or whatever. This kind of feels like having a soda even though there's only 10 calories in it. So I think that ability to make it a part of my, my ritual, my routine is um, um is a big thing, and they aimed to do that, and so I think that's another reason. So positioning quality of the product and focusing on routine are why it works for me, yeah, I think. 

0:41:09 - Will
For me it's, um, I think it has to be district or it has to be positioning too, and not that I'm just like trying to rip that off from you. It's just that they literally put so much energy into that, like they literally had to re-brand and they brought in the whole new membership team to reprise the new brand and like how they, how they are positioned in the category where it's more, it's more about lifestyle living, fit, instead of like whenever, like you said, monster energy and salty. That is like really, really, really key yeah, I mean, let's just be real. 

0:41:54 - Brian
It doesn't matter what other things we say. Like that is why this brand works. Like that is straight up, non-disputable, that is why the brand works. It's their position. 

0:42:03 - Will
Yeah so I think that that is like the 80 20 here. Uh, let me notice, right, it's some other things that have been really wide and been enabled to have success that are why they're working right. Has this opposite distribution, you know, and I think I think even just going back to kind of when you you go back to when they they were hired to buy business, they fired the truth founder, they brought in the student leadership team. He was very intentional about the distribution, the single problem distribution. As you said, the 35,000, the Truth Fans. They signed this deal in Asia. It still accounts for 5 or 6% of their revenue, I think they signed a. They have had an initial distribution with 7-Eleven, so they got a profitable distribution and then I think they ramped up with the investment. What you got there, it took maybe 6% of their distribution and then I think they ramped up with investment. Which about that, they took baby steps for distribution. It wasn't like they just signed half a billion dollar yield test, you know. So I think they were very strategic in how they ramped up their distribution. So maybe sort of like strategic ramp up distribution would be my second one, and yeah, it's tough to think about the third one. 

I would say, like you know, I would come back to the comic game around like linking categories or being just sort of bridged between categories. You talked it's a sort of bridge between categories. You talked about in the skins how you were able to bridge, like the shapewear and now meanswear. It's all been a great sort of stuff. You talked about Jolie. 

Jolie is probably one of the best ones where it's like their hardware. They're, you know, really like a lifestyle hardware. The range of themselves is to beauty. You know, really like a lifestyle hardware company is deriving themselves into beauty, you know, and it's exposed them to this whole art. And I think that you know what's key here is how Celsius is an energy-driven company that is positioned as the Hulk. They're doing that with their mission around the fit. They're doing that with being, like you said, where they're on in caps, in the aisle, you know, next to supplements, as opposed to in the in the, you know the aisle, or the energy drink aisle, like being able to put your brain in the frost category. It just allows you to bring in this whole other market or this whole other human rapidity to your man. I think it can really grow the best. Wow, if they're just another example of some types of teeth. 

0:44:51 - Brian
100 yeah, and you know, there's actually one thing that we didn't touch on that, um, I think overarchingly is also also really a huge reason why they've been able to recover the way that they have is that John Fieldley is a CPA that's his background. When what was the other, uh, jerry david, when jerry david was eo, he was the cfo and then got promoted to ceo and that's really where they found their footing is. Is that, you know, I think jerry, jerry did a lot to kind of recover them. Um, but obviously they they worked together to let the numbers be the guide. 

Um, they've, they've really lived that kind of like KPI incremental growth, being strategic about the numbers and how they're growing the business, which you know, that's another common theme right now that if you are pursuing product market fit positioning and a quality product rather than having an explosive you know, you know hockey stick of subscribers and followers or whatever to lean, lean on if you're Mr Beast or Skims or whatever, if you don't have that, it requires being extremely detailed with your numbers, knowing what your profitability is, finding ways to make the right deals that allow you to kind of balance scale as you try to move through that process, and so that's another thing that we could have spent probably a whole section on. 

They really kind of let the numbers be the guide mantra, which is cool to see and a very good lesson for anyone that's trying to find their own product market fit or their own positioning. That will allow them to do it. You have to reserve capital. They've been through the ringer, they know what it feels like to be D-listed and they probably never want that to happen again, and so that means being really, really protective of your capital and really smart how you deploy it. 

0:46:54 - Will
But it's awful. I think it's like a 70% profit margin. I think that's about it. In that $1.2 billion, there's totally $2.3 million to be profitable. They say that early with death, but death is actually not profitable. A similar company that's very fast-growing right now is also valued at around $1.4 billion. I won't be trading, so you don't know the numbers, but river assets are not profitable. So I think, yeah, that's a really good point. 

They really were just like really ran it like a bootstrap and sure is this, you know, and then it's just like they just hit it. You know COVID, they hit that trend and so it was profitable all the way through. You know, yeah, hindight Trend and it was profitable all the way through. You know, yeah, and yeah, just to show you you don't need to like run this, you know Silicon Valley label. You know a lot of brands were doing, certainly up until the past two years, a lot of the DTC brands. You know we talk about this whole DTC follow-up. Pop around brands, just pretty companies that talk about this whole. You just see all the pop around brands, just pretty homeless companies that have like real hard inventory like a salt. Yeah, it just doesn't work. Uh, on the cat it's true. 

0:48:11 - Brian
Yeah Well, cool, good stuff. Uh, great episode, and actually everybody. This was the last episode of season one. We kind of decided just last minute that this is going to be a seasonal thing. This is the end of the season. 

We have decided to do so because we're going to go back to the drawing board, figure out how to make Wyverns work even better. We'll have some new stuff coming out for you guys in the next couple of months. We don't know exactly what the timeline is yet, but just know that we are just looking to make it better, looking to make it more interesting, more engaging, more valuable to you, more tactical, and so keep an eye out. If you're not following Will and I, the best place to do so would probably be LinkedIn. We'll have lots of updates for you there and, of course, we'd love to hear from you. If you have suggestions, as we're building stuff out and going back to the drawing board to figure it out. Please let us know, because you're the reason we're doing this. So if you have something you want to see, we'll definitely try to figure out how to incorporate it. Um, so thanks already for listening and we'll see you next season. Thank you, guys. 

Transcribed by https://podium.page