Telltales: Celsius Holdings
From weight loss aid to fitness fuel: How one company redefined the energy drink market
The following document was written by Holly Miller, and is intended for research purposes only. It does not constitute research advice. 
Just after retiring from his seventeen year tenure at the software company Pivot Point, Steve Haley entered the beverage business, initially as an investor. After researching the industry, he soon saw that “the company that owns the category wins. So instead of creating the 100th energy drink or the eighth vitamin water, let’s create new categories.”1 It was through the founding of their company Celsius Holdings that this “new category” was created. Along with his wife Janice Haley, Steve Haley launched their product, Celsius, in 2004 as a weight loss drink. They claimed that the product was “calorie-burning” and could boost the metabolism because of its thermogenic properties, thus why they named it after a unit of temperature measurement. With the additional benefit of no added sugar, the product catered to a growing population of customers who wanted to enjoy a healthier soft drink that could even aid in their weight loss. It was this health–focused lifestyle that would define the company’s brand marketing for the next two decades.
Although the Haley’s gave their product a solid start, it would take businessman Carl DeSantis to really solidify their company’s position as a leader in the energy drink industry. Founder of Rexall Sundown, Carl DeSantis was one of the earliest supporters of Celsius, and one of the major forces behind the company’s eventual success. A couple of years after the product launched, DeSantis tasted Celsius for the first time, and was immediately convinced he had stumbled upon a hidden gem. When Celsius Holdings first went public in 2008, DeSantis was the largest investor2. The drink received significant media coverage and expanded rapidly. DeSantis had high hopes for the company, extending Celsius a $3 million line of credit to jumpstart a new advertising campaign in 2010. Despite his efforts, after three years of financial losses partially due to their rapid retail expansion, the company was delisted from the Nasdaq3.
DeSantis was not deterred from these losses. After the company was delisted, DeSantis recruited a new CEO, Gerry David, and a new management team, including CFO John Fieldly. After meeting with a marketing team, Celsius executives and investors emerged with a new angle, pivoting their focus away from weight loss and towards a healthier, sugar free energy drink for fitness and exercise4. They adopted the slogan they still use today “Live Fit,” which markets the product as a healthier energy drink for the physically active consumer. The company claims that the guarana seed extract, green tea leaf extract, and ginger root in their product activate thermogenesis, which is a bodily process that can boost one’s metabolic rate, potentially leading to increased weight loss. The key distinction between their new marketing and their initial one is that the emphasis on Celsius as a pre-exercise drink as opposed to one that claims to promote weight loss independent of exercise5. The marketing switch worked, as in June 2017, Celsius was re-listed on the Nasdaq, and ended the year with revenue of nearly $36 million6.
Health-focused marketing was central to the company’s brand from the beginning, but as health concerns are raised around all energy drinks, Celsius has faced some public scrutiny surrounding their high caffeine levels and use of preservatives. In a 2022 class action lawsuit, Celsius Holdings was accused of having preservatives in their product. Part of the brand’s better-for-you marketing included the product’s lack of preservatives, but concerns were raised about their use of citric acid. The company claimed that citric acid was only added as a flavor, not as a preservative, but ultimately agreed to settle outside of court7. Although the settlement did not affect their growth, it does raise questions about the level of transparency necessary for a company to market themselves as a health product.
Energy drinks of all kinds have been criticized in the wake of recent high-profile medical incidents related to high caffeine levels. In the fall of 2023, two deaths were reported that were linked to the consumption of Panera Bread’s highly caffeinated Charged Lemonade, a product that has since been discontinued8. Celsius’ most highly caffeinated beverage is their Celsius Heat. With 300 mg of caffeine in a 12 oz can, this product has about two to three times as much caffeine as a 12 oz cup of coffee. According to the FDA, 400 mg of caffeine is a healthy amount for the average adult, so having just two cans of Celsius Heat would put an individual well over their daily limit9. Although Celsius and other energy drinks are safe for most people, many people still have more mild side effects such as sleeplessness, jitteriness, and nausea. For those who are at high-risk for heart conditions, the products could be detrimental10.
As the standard for health changes and new research is conducted, it becomes harder for Celsius and companies like it to stay true to their initial mission of being a healthy product. Celsius is still as popular as ever, but they may face future challenges in balancing their transparency with their desire to maintain their product’s reputation as a healthy product.