Monster Beverage Corporation (MNST) develops, markets, sells and distributes alternative beverage, such as non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored and unflavored) with beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. Company markets its products through retail chains, club stores and specialty stores using exclusive distributor network.
Energy drinks and shots represent small portion of non-alcoholic beverage market, this industry has seen tremendous growth since 2008, with total sales in United States close to $13.0 billion dollar presently. This growth has been attained on the backdrop of increased consumer penetration and drop in sales for traditional carbonated soft drinks due to health concerns related with cola products. According to “Energy Drinks and Shots: Market trends in US”, sales for energy drinks & shots is expected grow to $ 21.7 billion dollar supported by improvements in distribution channels and sustained economic growth. Energy drinks market is currently in its infancy and is expected to grow significantly as energy drink usage increases among its target consumers (Source: www.packagedfacts.com). Presently energy drinks account for 78% market share followed by 18% for energy shots and 4% for energy drink mixes.
For the last twelve months, company reported revenues of $2.2 billion, operating income of $552.0 million and net income of $331.0 million or $1.98 earnings per share. Company has realized huge growth in the past 9 years with revenue growth of 12.7%, operating income & net income growth of 16.8% annually, capturing a market share of 35%. Figure 1 highlights y-o-y growth Monster Beverage has realized since 2004.