Celsius entered the Chinese market in September 2017 through a partnership with Qifeng Food Technology. The brand has begun local production and initial distribution of its core products across three Tier-1 cities including Beijing, Gaungzhou, and Shenzhen, as well as 30 other cities in 14 provinces.
China ranks second behind the US in functional drink sales with domestic volume sales expected to hit 15.04bn liters, valued at US$23.7bn by 2020, according to market research firm CCM. Annual per capita consumption of functional beverages in China remains relatively low at less than two liters but is expected to increase as consumer awareness of functional beverages grows.
“The busier lifestyle of China’s growing urban middle class is driving the market for functional beverages because a rising number of workers don’t have the time anymore for a healthy and balanced meal every day," says CCM. "The lacking energy and nutrients are guaranteed nowadays by consuming functional beverages including taurine and vitamins."
Celsius says it wants to make the most of the opportunities for functional beverages in China: “Consumer response has been overwhelmingly positive and signals that our plan for broader product distribution in China, which is scheduled to being in the summer of 2018, is in-line with market opportunities,” the company said.
Celsius will also be accelerating its distribution in Hong Kong through a partnership with A.S. Watson Industries.
Extending portfolio following revenue growth
Celsius was founded in Florida as a diet drink called MetaPlus in 2005 and has since repositioned itself as a fitness drink adding carbonated and non-carbonated flavors packaged in 12-ounce cans to its portfolio. Each of the brand’s drinks contains a “proprietary blend” of taurine, guarana extract, green leaf tea extract, and ginger root extract, according to the company.
In 2017, the company launched a line of “trainer-grade” fitness drinks targeting athletic trainers, body builders, military personnel, and endurance athletes.
“In an industry that was once dominated by only two, massive global brands, we are continuously gaining ground and building momentum,” Celsius CEO John Fieldly said in a letter to shareholders.
The company plans on extending its product portfolio supported by revenue gains in the first nine months of 2017 that surpassed its sales performance for all of 2016.
In its most recent financial quarter, Celsius delivered a 62% increase in gross profit reaching $10.8m in revenue.