How Is Monster Beverage Likely To Grow In the Next 2 Years?

Monster Beverage (NASDAQ:MNST) derives 90% of its revenues from its Monster Energy Drinks segment. While soda sales have been steadily declining, the energy drinks segment is actually increasing. Energy drinks sales in convenience stores in the U.S. totaled $8.4 billion in 2017, with a strong compound annual growth rate (CAGR) of 3.6% expected during the period 2018-2023, according to market research firm Mordor Intelligence. Sports drinks are marketed as thirst quenchers which are substitutes for water. The difference is that these drinks have additional minerals and electrolytes which argue how consumers need more than just “water” to meet their hydration needs. Apart from being thirst quenchers, sports drinks now target the nutritional need of athletes and consumers who are more physically active. These drinks incorporate ingredients which not only encompass salts and sugars used in traditional sports drinks but also perfectly balanced carbohydrate-electrolytes which could replace the key components lost by athletes during exercise. With Monster Energy possessing a strong brand name within the sports beverage industry, the drink’s market share could potentially rise with an increase in overall sports drink consumption.

We have created an interactive dashboard to assess Monster Beverage’s revenue growth over the next two years. You can modify the different revenue drivers to see how it will impact the company’s expected revenues.

Monster derives revenue from three sources – Monster Energy Drinks, Strategic Brands, and Other, and we expect to see revenue growth across the board. One of the company’s key growth strategies is international expansion. In this regard, Monster, as a result of its partnership with Coca-Cola, is in the process of transitioning to the latter’s extensive distribution network, which will give it access to over 200 countries, besides providing economies and efficiencies of scale which will become more valuable over time. The company intends to commence distribution of Monster with Coca-Cola bottlers in a number of countries such as Armenia, Belarus, Tanzania, Argentina, Ecuador, and Uruguay. Moreover, the launches in a number of markets towards the end of 2017 should also help to increase the revenue. The company is also expanding distribution in China, and expects to re-launch the Monster brand in India.

The company has also tied up with Lewis Hamilton, Formula One racer, and as a part of this agreement, it launched the Lewis Hamilton signature Monster Energy drink in 24 markets in EMEA in 2017. MNST expects to launch this product in Australia and New Zealand in the first quarter of 2018. Besides these, Monster expects to introduce different variants of the brand and packaging options in the U.S., and other countries, which should help it to continue its strong performance.

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Research

Like our charts? Explore example interactive dashboards and create your own.