Why Celsius is betting big on influencers

Celsius Holdings (CELH) is one of the companies betting big on influencer marketing, recently announcing a brand deal with social media sensation Jake Paul. In an interview with Yahoo Finance Live, CEO John Fieldly explains the company's influencer strategy, noting "when we look at influencers, one thing we're big on is that it has to be authentic." Fieldly explains why Jake Paul's personal consumption of Celsius drinks and relevancy within the fitness space makes him an ideal influencer for the brand, saying "we're really rooted in fitness, so that's where our DNA is."

Video transcript

- Companies are doubling down on influencer marketing. A new study from Creator IQ found that 67% of companies increased their marketing spending on influencers in the last year. Energy drink brand, Celsius is one company investing in the trend, recently announcing a partnership with Jake Paul among others. John Fielder, Celsius Holdings CEO joins us now. Great to have you here with us this morning.

JOHN FIELDLY: Glad to be here. Thank you.

- OK you've seen this intersection right now where the company has been able to kind of meet some of the trends of the new energy drink consumption with that other side of the intersection of influencer marketing. What really powered that decision, that strategy from the brand perspective?

JOHN FIELDLY: Yeah. The company's been around. I've been with the company 12 years and we're really rooted in fitness. So that's where our DNA is. Really started off as a pre-workout. Those for individuals looking to prove their workouts, live better and live healthier and we've capitalized on that with overall health and wellness trends with those growing making us more mainstream.

And then today, you mentioned Jake Paul with some of the influencers, Shaun White. We have many others. We're gaining more broader appeal, broader distribution. And if you think about just 10 years ago where fitness was, it's mainstream today if you look at all the number of gyms, the boutique gyms, the specialty gyms that are out there. Fitness is in each and every one of our lives today more than before. COVID has brought it out as well. Health and fitness is key to living and that's what Celsius is about. It's all about living fit

- I am curious how you guys decide which influencers to partner with because Jake Paul, OK, he's not the first guy I necessarily think of when I think of fitness and he's not unproblematic entirely, right? So do you sort of take risks deliberately because that then gets the name out there? How do you think through all of that?

JOHN FIELDLY: Well, when we look at influencers, one thing we're big on, it has to be authentic. So we realy need you to be like the product. That's really critical and Jake is being-- as an example, Jake Paul, we partnered with him this year, but he's been consuming the product over the years so he's very familiar with it. Actually ran into him at a restaurant, that's how it all came together. We got talking about Celsius, his favorite flavor. Started off drinking our great tasting orange.

What's interesting about Jake is that he-- yes, they call him the problem child that came from social media. A big influence influencer and he's also into fitness. He's moving into boxing and really about fighter and advocate of fighter pay as well.

So really changing what he's doing for fitness and sports in general. But when we look at influencers, we have a variety of different influencers in all categories. Shaun White, great snowboarder, athlete, Olympian. And then we have a variety of different verticals that we target but most importantly, they have to be authentic to the brand. I think consumers today see through that and that's really critical for us.

- Yeah. Shawn White is the name that I shout out when I go off of any jump coming down a mountain.

JOHN FIELDLY: Absolutely. Absolutely.

- Whether begrudgingly or out of excitement. At the same time here, when we think about the growth for your company in Celsius, we were taking a look at the stock chart even coming into this, it's absolutely done amazing even in kind of this interesting consumer environment where consumers are more picky.

They are more choosy and perhaps this is a little luxury that they've tapped into. So how have you gone about the pricing mechanism, the strategy there and making sure that you're not a part of the trade down or the trade out rather part of that basket for consumers?

JOHN FIELDLY: No, that's a great point. Our position, we want to be premium in the category. Celsius is a premium product. We have over seven essential vitamins in it. We have green tea, ginger, guarana, biotin. Also thermogenic properties help you live that healthy active lifestyle. So we are a premium position. We're working on maintaining our pricing architecture, our promotional strategies to maintain that.

We're watching consumers if they're trading down. One thing that's unique with the energy category is that consumers are extremely loyal. We're seeing strong loyalty within the category, kind of like when the coffee category, we look like Starbucks and Dunkin' Donuts.

So we feel we're pretty much-- not insulated totally, but somewhat protected as we grow in scale and we also feel if consumers are going to pull back, they're going to pull back in other areas. Maybe that travel, maybe that extra dessert at dinner or where they're going to dinner or cutting a meal out versus cutting their energy drink.

It's really part of a daily lifestyle and daily routine. And when you think about the DNA of Celsius with our fitness, that's part of that lifestyle that we live for and what Celsius is about. We're in Barry's Bootcamp, we're in just partnered with Dogpound. We're with some of the largest Gold's Gym, 24 hour, some of the largest institutional gyms and BOJ gyms in the US.

- When we talk about fitness and authenticity and social media and all of them coming together, apparently, there's been a trend on social media where people say there is Wegovy in Celsius and the other new classes of diabetes drugs that also happen to cause weight loss. How do you communicate the benefits of Celsius without there being just like flat out false information being spread out there? Is that good for you guys that people are doing that?

JOHN FIELDLY: I don't think so. There's a lot of false information on social media, right? It's all over. You see that on all platforms. We respond. It doesn't have that. We have look at the ingredient lists. There's a lot of false advertising that's out there just in general. It's something that every CPG brand or every brand or every company has to deal with these days.

We have a great social media team that stays active. If we see something really false, we'll make a complaint through that platform. You just have to be proactive these days because the false advertising that's out there or false comments, it's not good. You need to stay on it.

- Speaking of pricing, it would be a lot more expensive if it had those drugs in the cans, I think.

- So what goes in then when you think about not just the nutrition, but when you think about the makeup of what differentiates Celsius in its own kind of ingredients in its own, if you will, formula that goes into it. What is that differentiation?

JOHN FIELDLY: Well, we have a proprietary blend with over seven essential vitamins. We have natural flavors. Most importantly, what we hear is our refreshing flavors. We have one of the most refreshing energy drinks on the market and we just evolved into expanding our vibe line.

We talked about pre-show, the tropical vibe, which was a great addition. We just launched cosmic vibe. Taking the vibe line into Galactic. You can get it at Circle K and we have other great flavors that are expanding as well. So flavor innovation is really key for consumers these days.

We just partnered with Pepsi over-- coming up on our one year anniversary so really excited bringing Celsius to more consumers. We're in about 95% of reported stores through RIR right now. And it's been great. You mentioned the stock price. The team has been working really hard. We just put up revenue of $326 million in the second quarter. That is more than what we did in all of 2021 so we've been working really hard and really busy.

- We were just showing the caffeine content, which is part of the reason that people buy Celsius, they want that boost from that and the other ingredients that you talked about. There's been a little bit of Chuck Schumer, I think of him because he brought up some of the caffeine content in drinks like yours and others being-- not that the caffeine in it of itself is an issue, but being marketed to children or younger people in particular. How do you respond to those kinds of concerns?

JOHN FIELDLY: Well, we don't market to children at all. If you go back to even where the brand was born in the fitness community and the gyms, what's interesting our demographic has historically been an older demographic and it could be because of the seven essential vitamins, the way the brand was built through Vitamin Shoppe and GNC and health and fitness. So actually, our demographics skew at an older demographic than your traditional 18 to 24.

- Even with the influencer marketing, because the influencers are sort of that audience skews quite young, doesn't it?

JOHN FIELDLY: Not in general. You're looking always 18 to 24. We don't partner with any influencer that's under 18. So we're really cognizant of that. We don't market to anyone under 18. We actually are 18 to about 44 plus. We have a lot of individuals actually that are 70 years old that call into the office and want free swag for their clubs and everything else. It's quite interesting, the broad demographic within Celsius.

And I think that's what kind of separates us. So we're not really concerned. We don't market to anyone under 18 and caffeine content, we feel we have the right amount of caffeine. It's about 200mg of caffeine. So if you look at your average coffee house, you're looking at a 12 ounce coffee that is a lot more than 200mg of caffeine that's out there on the corner outside.

So we think it's the right amount. We don't have any sugar. That's another thing we don't have. So a lot of these other energy drinks are combining an awful lot of sugar with caffeine so you get this spike because of the sugar rush. And some of them have over 26 grams of sugar in them. So that fills up like a Ziploc bag, which is crazy.

- You have a recent partnership with the MLS as well, which is like a lot of energizer bunnies running around on the field for a long time and perhaps that's exactly why Celsius wanted to partner there. You think about the next sporting deal that you would like to see come through. What sport makes sense next? Where are talks are moving forward?

JOHN FIELDLY: Yeah, well, we just announced the MLS deal yesterday so we're really excited about that. And talked about 90 minutes of really great cardio workout within soccer and it's a growing demographic as well.

- Petrifying to me but yes.

JOHN FIELDLY: What's interesting with that partnership, we actually partnered with Inter Miami in February and then Messi shows up three months later so that was quite interesting. Great timing on that. Some things happen and you've got to maximize the moment but we partnered with Inter Miami prior and then we just worked with the National League with our national distribution at 7-eleven and our expanded opportunities now.

This is our first national partnership. We actually have the extended time sponsor so we're providing that essential energy for that extended time past the 90 minutes. And as we look at where we go from now, we have a partnership with F1, with Ferrari so you'll find us in the upcoming races. Big race coming up in Vegas as well as Austin.

You'll see us in snowboarding downhill skiing. We're working on opportunities there. So really anything that's evolved, we're looking at opportunities where we can connect with consumers in this fitness lifestyle, bring Celsius to more consumers that want to live fit, live life to the fullest. That's in our DNA that's what we're about.

- Do these partnerships add up to acquisition target?

JOHN FIELDLY: Nothing's out of the question.

- OK. All right. We've got to leave things there.

- Full of energy, John. Love it.

- You've had two of these already today. Two Celsius. All right, we'll see where you're at by 11:00 AM. John Fieldly Celsius Holdings CEO. Thanks so much for joining us on set.

JOHN FIELDLY: Thank you