Energy drinks continue to be the top seller at convenience stores again this year with soft drink makers like Celsius (CELH), Monster (MNST), and Red Bull all working to differentiate themselves through packaging, new flavors, and an increased focus on female consumers.
At the National Association of Convenience Stores conference (NACS) in Chicago this week, Goldman Sachs’ Bonnie Herzog identified several trends within the space that underscore the strength of the category and corporate strategies to entice consumers.
“It’s all about energy drinks again this year with Monster, Celsius, Red Bull, and several others stepping up their game,” Herzog said, adding that demand remains “robust with retailers expected to add incremental space next year.”
Celsius (CELH)
Representing a third of the growth in the energy drink category, the zero-sugar trend gives Celsius (CELH) a long runway of distribution upside.
“More shelf space is warranted for CELH’s portfolio of brands,” Herzog writes, as the name is growing twice as fast as peers in convenience stores with even faster growth recognized for Alani Nu.
In addition, “category strength and compressing price gaps warrant price increases,” she adds.
As for Herzog’s outlook for the stock, despite a 144% rally this year, the market is underappreciating Celsius’ (CELH) upside from further share gains and margin expansion over the next several years.
Goldman rates Celsius (CELH) as a Buy with a $72 price target, representing 12% upside from Thursday’s close.
Monster (MNST)
Monster (MNST) had one, if not the best, attended booth at NACS this year, Hertzog noted, underscoring its continued standing as one of the top names in the energy drink category.
It helps that Monster (MNST) has one of the most “robust” innovation pipelines in the space as the company leans aggressively into flavor innovation, zero sugar offerings, and packaging innovation. The brand is also targeting female consumers early next year with a light, easy-drinking option called FLRT.
Monster (MNST) also plans to launch Ultra Wild Passion next month, Ultra Punk Punch next spring, and just in time for summer 2026, Ultra Red, White & Blue Razz which the company says tastes just like a melted rocket pop.
New flavors presented at NACS include the Monster Orange Dreamsicle, Monster Green Strawberry Shot (which includes a zero sugar variant), and melon-flavored Londo Norris Monster Zero Sugar.
“Monster remains one of our top stock picks as we continue to believe it’s one of the most attractive volume-driven growth stories,” Herzog says, adding that there is a clear path for Monster to generate outsized gross profit dollar growth over the next several years given its multiple layers of growth.
Herzog rates the stock as a Buy with a $77 price target representing 10% upside from Thursday’s closing price.
Monster (MNST) shares set a new record high on Friday.
Red Bull (Private)
Privately-owned Red Bull has seen category strength this year fueled by increasing household penetration, as well as “impressive” levels of innovation.
But similar to past years at NACS, traffic at the Red Bull booth was lighter than at Monster (MNST), as executives acknowledged that competition in the energy drink space is intense.
“It appears Red Bull is continuing to run the same playbook it has for years despite significant traction gained by smaller disruptors.” Herzog says, acknowledging however, that Red Bull’s strong brand loyalty and underlying segment strength will continue to drive solid growth in the future.