Hi Everyone,
Celsius Holdings has taken a 13.8% haircut as I write this. It’s dropping because Neilsen reported that Celsius’ market share dipped due to market share coming in at 10.5% opposed to 10.8% the week before. Market share variations like this could be the result of promotional activity by competitors tired of Celsius chipping away at their market share. The recent shelf space gains the Celsius has received will no doubt concern them, so promotional activity would be a normal response. My point is that we should give this a month or a quarter to see how things go. Consumer products will always be fraught with market share battles. Weeks like this shouldn’t be a surprise, and I, for one, will sit tight and see how things go before I sell any shares. On the other hand, I wouldn’t back up the truck either.
They ended the quarter at 11.5% share, and in their Goldman Sachs conference said that the two weeks after earnings it went to 11.8% and then 12.1% on their two best weeks ever. That conference was on May 14 though, and the story says the data is from the period that ended on May 18.
The Seeking Alpha story also says their share dipped to 10.5% from 10.8%. I’m not sure if that means it went from 11.5 → 11.8 → 12.1 → 10.8 → 10.5?
It seems like one of the two places may have bad data, or I’m trying to understand how the timeline works for these numbers.
Doesn’t the Neilsen data only cover a portion of their channels? I’m not saying a downward trend is not relevant or a potential concern, but I was under the impression the Neilsen numbers themselves weren’t a proxy for total market share.
bnh91,
Thanks for the information. I tend to be skeptical of stories like this. Food ingredients would need to be GRAS (generally regarded as safe) by the FDA. With the millions of people drinking Celsius, some of them will have health problems, and some, may, ascribe an illness or injury to Celsius. Establishing causation would be a concern or a large number of consumers reporting a problem would be a concern.
Not sure how much weight to put against a story like this.
I just have to say, that a 13% drop in share price based on ONE WEEK’S polling of the part of their market that Nielson covers is insane. And we are talking about a "HUGE’’ drop from 10.8 to 10.5 which, as a weekly variation, is small enough to be a smudge of someone’s pencil. What nonsense!
Saul
I did a web search on the string, “Celsius drink can warning” and found many stories dating back over the previous year about too much caffeine and such. The stories have been there for a year but the stock fell apart today.
FWIW, I did a little bit of research on liver damage due to green tea extract (GTE). From what I found, too much catechin which is found in green tea and several other commonly consumed products will cause liver problems for just about anyone.
But in order to suffer severe liver damage from two or three cans of Celsius like the guy in the video you have to be genetically predisposed with a hypersensitivity to catechin. don’t know what percentage of the population might have this condition, but apparently it’s enough for some of the folks with this genetic make up to also drink the Celsius flavors with high GTE levels.
I am skeptical of the Green Tea Extract being the issue for that person in the video because I’ve found this,
Clinical studies and case reports have shown that daily doses exceeding 800 mg of green tea extract, especially when taken over extended periods, have been associated with liver damage in some individuals.
And the average can of Celsius is 50mg of green tea extract. Digging in a bit more I found that,
50 mg of green tea extract is roughly equivalent to drinking about one-third to one-half of a cup of brewed green tea.
My guess is that person was doing something else to cause liver damage and wanted to cover up what the real reason is.
The only energy drinks I can recall being taken off the market were ones that had upwards of 1000-2000mg of caffeine - or 10 to 20+ cups of coffee where a single drink of those could seriously harm someone.
I think we’ve strayed a bit off topic. I think the most important issue is the small drop in market share affecting the stock price. That’s my concern and that’s Morgan Stanley’s concern too.