Monster maintains top-line growth despite supply chain constraints.
Monster Beverage Corp. reported robust top-line growth in the second quarter despite its inability to fully meet demand due to ongoing shortages of aluminum cans and delays in obtaining ingredients.
After a 30% increase from $311.4 million, or 59¢ per share, in the same period last year, net income for the second quarter ended June 30 was $403.8 million, or 75¢ per share on the common stock. From $1.09 billion to $1.46 billion in quarterly revenue the previous year, a 34% increase.
Reign Total Body Fuel is a part of the Monster Energy Drinks category, which had a 33% increase in sales to $1.37 billion from $1.03 billion. Sales of energy drink brands acquired from The Coca-Cola Co. increased by 46% to $86.9 million from $59.6 million in the Strategic Brands portfolio.
Despite severe COVID-related disruption in multiple sectors, the corporation produced record-breaking second-quarter results. The US distribution of some SKUs was hindered by the lack of aluminum cans and problems with ingredient procurement, especially for the NOS energy drink brand.
In a conference call with analysts on August 5 to discuss second-quarter results, Monster Beverage Corp. chairman and co-CEO Rodney Cyril Sacks stated, “What we’ve tried to do is basically focus on our faster selling and our larger SKUs.” ”
Distribution in the US was also badly impacted by labor shortages, as many Coca-Cola bottlers found it difficult to keep up in a competitive labor market.
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“Although it’s common to assume that everyone will experience the same issue, I believe that Red Bull, our primary rival, has a specific system in place,” Mr. Sacks stated. Compared to the bigger bottlers with bigger labor pools, they have been able to handle their labor shortages more effectively. That is something that will eventually go away as things start to calm down and return to normal.Despite the can shortages, Mr. Sacks emphasized that the company’s innovation plans—which include the new Reserve brand of Monster Energy drinks—must go on. The line for reserves
will see the firm concentrate its flavor innovation efforts on its flagship full-calorie brand, which makes up around a third of its overall sales, rather than low- and no-calorie rivals like Monster Ultra and Reign overall Body Fuel.
October will see the release of the watermelon and white pineapple flavors of the new Reserve brand of Monster Energy drinks. Additionally, the business will keep introducing its line of pure energy seltzer, which is nonalcoholic, under the True North name.
True North was introduced in May 2021 and is offered in cucumber lime, black cherry, watermelon mist, white peach pear, and mandarin yuzu types.
Mr. Sacks stated, “The new line… contains ingredients for immunity support and an organic plant-based energy blend.” “True North plans to launch fully into mainstream channels in 2022, with a limited customer target in 2021.Meanwhile, a new line of Java Monster energy drinks and cold-brew coffee will not be released until early in 2022.