Why won't the new affordable Kirkland energy drink from Costco undermine Celsius?

Bryan Sozi, Executive Editor-in-Chief

I’ve never been one to endorse publicly traded companies; it’s never been my style.

But regarding the new Korkland energy drink launched this week by warehouse retail giant Costco, we might as well approach it with common sense and rationality.

This product won’t topple the Celsius energy drink empire. On Tuesday, as images of Korkland energy drinks flooded the X platform and Instagram, Celsius’s stock price plummeted nearly 7%, an almost absurd reaction. Korkland energy drinks are sold in 24-can packs for $16.99, roughly $0.70 per can; meanwhile, Costco sells Celsius 18-can packs for about $28.

Here are the most direct reasons Celsius will continue to maintain its growth momentum:

First, Korkland is Costco’s private label brand, which means the new energy drink is only sold at over 900 Costco stores worldwide (and possibly only in U.S. stores, as Costco has not disclosed specific plans). You won’t see it displayed alongside Celsius at Target or Walmart, nor will you find it in Casey’s General Stores’ refrigerated cases.

Even if you want to try this new beverage, you first need to be a Costco member.

Second, Celsius has acquired two major energy drink brands, Alani and Rockstar, and with deep cooperation with PepsiCo, it possesses strong distribution capabilities.

Celsius can quickly launch new flavors and formulations (for example, it will soon introduce Celsius drinks with added protein) and upgrade packaging designs. Costco, on the other hand, simply won’t do that — the reason is straightforward: it’s just creating a private label energy drink for its own stores, not building an F1 team with Korkland to compete on the racetrack against Red Bull.

That’s simply unrealistic!

Perhaps some Costco customers will switch from their usual Celsius to try a box of Korkland to save money, but this does not mean they will become loyal customers. In fact, buying a whole box of a new drink only to find it tastes terrible is the worst consumer experience — a complete waste of money.

Moreover, we cannot ignore the strong fundamentals of the Celsius brand itself.

The company just delivered a milestone annual performance, achieving record sales after integrating brands like Alani and Rockstar; at the same time, with more shelf space gained in convenience store channels, Celsius’s brand has also experienced further growth.