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Monster Energy Stock (MNST) Introduction
Successfully marketing and growing a beverage is a challenging and demanding task. Many beverages fail to catch consumers’ eyes online and in retail stores. It is a very challenging and competitive space, and very few succeed, regardless of the tools at their disposal. Today’s topic is about one of the most successful beverages,
Monster. It has always been an independent company and succeeded thanks to its appealing look, successful marketing, and strategic partnerships. After nearly going bankrupt and being acquired,
Monster went public with an IPO in 1990, and its stock has consistently performed well. Here is everything you need to know about Monster Energy stock.
Monster Energy Stock History
Let’s start with a very quick history of the company. Monster Beverage Corporation was originally founded as Hansen’s in 1935 in Southern California. It all started with Hubert Hansen and his three sons, initially focusing on selling fresh fruit juices to film studios and retailers. Over the years, the company expanded its product line to include a variety of sodas and juices.
Fast-forward to 1988, when the company faced financial difficulties and filed for bankruptcy. That same year, it was acquired by California CoPackers Corporation and renamed Hansen Natural Company. In 1990, Hansen’s went public with an IPO, setting the stage for future growth.
Energy Drink Market
A pivotal moment in the company’s history came in 1997 when it launched its first energy drink, Hansen’s Energy. However, it wasn’t until 2002 that the company made its mark by introducing Monster Energy.
It quickly gained popularity thanks to its attractive design and caffeine content. Monster Energy quickly became a significant revenue driver for the company.
In 2012, Hansen rebranded as Monster Beverage Corp due to the global success of its energy drink. The company’s ticker symbol changed to what we know today: $MNST.
Monster Beverage Corp Today
Today, Monster Beverage Corp has strengthened its position in the energy beverage market (worth approximately $100B and growing over 12% yearly) thanks to incredible branding and strategic partnerships.
Its market share (approximately 39%) is second to the market leader, Red Bull (approximately 43%). In 2022, the company acquired CANarchy Craft Brewery Collective for $330M, marking its entry into the craft beer market.
Here are all the Monster energy drinks and related products that can be found today:
- Monster Energy: The flagship product line is known for its bold flavors and high caffeine content.
- Monster Energy Ultra: A low-calorie version of the original Monster Energy, available in various flavors.
- Monster MAXX: A line of energy drinks with maximum energy boost.
- Reign Total Body Fuel: A performance energy drink targeting fitness enthusiasts, with ingredients like BCAAs and electrolytes.
- NOS: Known for its high-performance energy boost, it is popular among car enthusiasts.
- Full Throttle: A brand focusing on a bold energy experience with intense flavors.
- Burn: An energy drink brand with a strong presence in international markets.
- Relentless: A brand that offers a variety of flavors, marketed primarily in Europe.
- Mother: An energy drink brand popular in Australia and New Zealand.
- Predator: Positioned as an affordable energy drink option in emerging markets.
- Live+: A brand offering energy drinks with a unique taste profile.
- True North: A line of energy drinks emphasizing natural ingredients and flavors.
Monster Energy Stock Partnerships
Monster has formed several strategic partnerships that have significantly contributed to its growth and market position. Here are some of the most notable partnerships.
1. Coca-Cola
In 2014, Monster and Coca-Cola announced a strategic partnership. At that time, Coca-Cola acquired a 16.7% equity stake in Monster for $2.15B. This deal was a financial investment and a business segment exchange.
Coca-Cola transferred its energy drink brands, including NOS and Full Throttle, to Monster, while Monster transferred its non-energy drink brands, such as Hansen’s Natural Sodas and Peace Tea.
This partnership positioned Coca-Cola as Monster’s preferred global distribution partner, significantly expanding Monster’s distribution capabilities. It allowed Monster to leverage Coca-Cola’s extensive global bottling system, upgrading its reach and operational efficiency.
2. Extreme Sports
In recent decades, Monster Energy has strategically aligned itself with extreme sports and high-energy activities. They resonate very well with its target demographic.
The company sponsors events like the X Games, motocross competitions, and snowboarding championships. These sponsorships expose Monster to a wider audience and reinforce its brand image as a lifestyle choice for those seeking excitement and thrills.
3. UFC (NYSE: EDR)
Since 2015, Monster Energy has maintained a strategic partnership with the UFC. The logo is in the center of every ring, and you can see fighters holding and sipping a Monster water bottle (Monster doesn’t even sell water!) before and after their fights.
The brand is also featured on the UFC Fight Night kit collection apparel worn by sponsored athletes. As a result, this helps Monster Energy stock price.
Monster Energy Stock Financial Performance
Monster Energy stock has been performing relatively well since 2010. The company’s revenue has increased yearly, even during the pandemic (from 1.3B in 2010 to $7.1B in 2023), and has maintained double-digit percentage growth in the last four years.
It has also been profitable, with a record net income established in 2023 ($1.6B). In March 2024, Monster’s stock price hit its all-time high at $60.85.
Despite all this positivity, the company’s stock price is down nearly 25% since and lost 11% in a single day of trading after it released its latest quarterly earnings in August 2024. What happened? Monster reported an EPS of $0.41 Q2 2024, which fell short of the analyst consensus estimate of $0.45. It also reported net sales of $1.90B, 5.89% below the analyst estimate of $2.02B.
Less traffic in convenience stores and tighter consumer spending can explain these critical misses. The company is concerned about its growth sustainability, which scared some investors. The global economy remains uncertain, and many companies have missed expectations recently.
Monster Energy Stock Competitors
Monster competes with several publicly traded companies in the US energy drink and broader beverage market. Here are some of the Monster Energy stock competitors.
1. Coca-Cola (NYSE: KO)
We begin with one of the giants in the beverage industry, Coca-Cola. Despite its strategic partnership due to its energy drink products, Coca-Cola is one of Monster’s main competitors.
In 2019, Coca-Cola launched Coca-Cola Energy as part of its diversification strategy to create healthier alternatives to traditional sodas.
As a result, this led to a legal dispute with Monster Beverage, which argued it violated the terms of their 2015 agreement. However, an arbitration tribunal ruled in favor of Coca-Cola.
2. PepsiCo (NYSE: PEP)
We continue with PepsiCo. It is a significant competitor primarily through its ownership of the Rockstar brand (acquired in 2020 for $3.85B) and other energy drinks.
PepsiCo has also introduced energy-infused variants of its popular Mountain Dew brand (Mountain Dew Kickstart and Mountain Dew Game Fuel).
These products are marketed as part beverages and part energy drinks, targeting younger demographics and gamers.
3. Keurig Dr Pepper (NASDAQ: KDP)
Next on the list is Keurig Dr Pepper. The company has been investing in various energy beverages, such as Nutrabolt and its C4 energy drinks, which appeal to fitness enthusiasts.
They can tap into the growing demand for energy drinks and compete with Monster Energy stock.
4. Celsius Holdings (NASDA: CELH)
Last on this list is a much lesser-known brand, Celsius, often called “Baby Monster. It is a much smaller but growing rival.
In recent quarters, Celsius has been gaining market share in the energy drink market and posted higher-than-expected profits, with a significant increase in revenue.
It could be due to its strategic partnership with PepsiCo, established in 2022 and worth $550M for an 8.5% ownership. This partnership includes a long-term distribution agreement, a key factor in Celsius’s market growth and expansion efforts.
Health Concerns
Before we conclude this article by breaking down Monster Energy stock, we will discuss how many companies listed may be detrimental to your health due to their high caffeine content and other ingredients.
These energy drinks are particularly concerning for teenagers and young adults, two of the main demographics targeted by these companies.
Several energy drink brands have been recalled in Canada, the US, and Europe due to caffeine, sugar, and taurine content exceeding the legal limit. The combination of these ingredients can lead to some health issues. That’s it for the health parenthesis.
Final Thoughts: Monster Energy Stock
To conclude, Monster Beverage Corp is one of the market leaders in energy drinks (second to Red Bull). Over the years, it has become very popular thanks to the brand’s image and association with extreme sports.
The company’s products are present globally under different brands and main competitors. Overall, Monster Energy stock has done very well financially on the stock market (NASDAQ: MNST). There may be a few hiccups coming its way due to economic uncertainty, but nothing it can’t overcome.
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Frequently Asked Questions
Monster Beverage Corp is traded in the US on the NASDAQ stock exchange under the ticker $MNST.
Coca-Cola bought a 16.7% stake in 2015 worth over $2B.
Monster’s main stock market competitors are Coca-Cola, PepsiCo, Keurig Dr Pepper and Celsius Holdings.
