By Jennifer Williams

People on the go have long reached for energy drinks for that extra boost to get them through a physically demanding day on the job, a tough workout or even just a sleepy afternoon at the office, but value was never part of the appeal. Lately, that has been changing.

Beverage companies raised prices on tea, soda and coffee in recent years to help offset their own higher costs. In the energy drink aisle, meanwhile, price increases have come at a slower rate, in part because the caffeine-infused cans have historically been priced at a premium compared with other beverage options, meaning there wasn't as much need, or room, to raise prices, analysts said.

Celsius Holdings is getting a boost of its own as wallet-conscious customers looking for a caffeine fix are seeing the more relative value in its energy drinks compared with other beverages.

The company's sales soared in the second quarter thanks to the acquisition of social-media darling Alani Nu, recent efforts to reach beyond its core audience of gym-goers and athletes, and new fruity flavors including two fizz-free options: pink lemonade and dragonfruit lime. Consumers are also sipping the brand's energy drinks because of the comparative value, said Celsius Chief Financial Officer Jarrod Langhans.

"The price point is helping energy, because if you think about the price increases that have gone through across most of beverage, they've been much higher than what energy has pushed through," he said. "So the price gaps are much tighter."

Energy drink unit sales in the U.S. have been climbing, up 6.3% in the 52-week period through mid-July compared with the same period last year, according to market research firm Circana. Unit sales of ready-to-drink tea and coffee beverages, offerings that can be purchased at room temperature, in the same period dropped 4.8% while refrigerated coffee and tea unit sales rose 1.2%, Circana said.

Unit sales of soda, which tend to have much less caffeine than energy drinks, were down 0.7% last year, according to industry tracker Beverage Digest.

Women and young consumers are driving the growth in energy beverages, analysts said, as are shoppers looking for a healthy energy kick -- both Celsius and Alani Nu have pitched themselves as fitness aids. At the same time, consumers' interest in cold caffeine drinks amid rising prices for many of them, such as iced coffee, is giving energy drink sellers an advantage, said Jim Salera, an analyst covering packaged food and beverages at financial services firm Stephens.

"One of the things that's been driving energy is this substitution effect," he said. "When you switch the format from hot to cold, it widens the range of acceptable substitutes."

While shoppers switch up their caffeine consumption habits, they are also looking closely at their grocery bills. Beverage makers in recent years have pushed through higher prices as rising costs for transportation, packaging and commodities hurt their profits. Now, as coffee prices have soared, shoppers are hunting for ways to limit the impact when purchasing beverages in store aisles. This is good for energy drink sellers.

In the past several years, year-over-year price increases for energy drinks peaked in 2022 at 6.2%, compared with around 12% and 11% for ready-to-consume coffee and tea and chilled coffee and tea options, respectively, according to Circana. In the 52-week period through mid-July, energy drink prices were up 2.4% from the year-ago period, Circana said. Refrigerated tea and coffee prices were up 3.6% in the same period while ready-to-drink tea and coffee prices were up 2.2%, the data show.

On average, an energy drink now costs around $3.45 while ready-to-drink tea and coffee options sell for $3.39 each and refrigerated options are $3.84, according to Circana.

"If somebody walks into the store, the cost of a soda versus an energy drink or a [ready-to-drink] coffee or cold coffee has gotten a lot tighter," said Celsius's Langhans. "So if you look at what's priced below energy...that's actually come closer to the price of energy."

The pricing dynamic is helping Celsius attract and keep shoppers, the CFO said. Celsius's revenue for the three months ended June 30 was nearly $740 million, an 84% increase compared with a year earlier. The boost was largely driven by roughly $300 million in revenue from Alani Nu, which became part of the company in April. Retail sales for the period for Alani Nu- and Celsius-branded drinks were up 129% and 3%, respectively. The company's overall retail sales grew 29% and volume increased 31%.

On a volume basis, the Celsius brand was the third-largest energy drink option across U.S. supermarkets, convenience stores, club locations and other shopping channels in the first half of the year, behind Monster Energy and Red Bull, according to Beverage Digest. Alani Nu was fourth.

Celsius typically aims to keep prices for its canned drinks on a per-ounce basis between what shoppers pay for Monster Beverage and Red Bull offerings, Langhans said. Monster Beverage, the company behind brands including Monster Energy and NOS energy drinks, plans "selective price adjustments" at the end of the year, executives said this month. Celsius, which lifted prices in the mid-single-digit range last year, has not publicly shared plans for another price increase, according to the CFO.

"Our focus will be more toward driving leverage and driving costs out of the system before we chase another price increase," Langhans said. "But it's something, if we need to, we can always look at."

Price hikes now, as consumers look for ways to cut their food and beverage costs, should be done carefully, analysts said. Still, energy drink sellers have room for some increases, said Gerald Pascarelli, a senior analyst covering beverages and consumer products at Needham & Co.

"Energy drinks never got ahead of pricing through inflation in the category," he said. "That gives them some dry powder to take modest incremental price increases today because their relative price gaps to other nonalcoholic beverage categories have become more favorable."

Write to Jennifer Williams at jennifer.williams@wsj.com

(END) Dow Jones Newswires

August 22, 2025 05:30 ET (09:30 GMT)

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