Research on finished goods buoys fitness drink Celsius, leading to broad-based distribution in China

24-Jan-2018 - Last updated on 25-Jan-2018 at 15:50 GMT

Research done on finished formulations and a commitment to a positioning as a dietary supplement are the cornerstones of his brand's success, says the head of fast-growing fitness beverage manufacturer Celsius.

Celsius, which is based in Boca Raton, FL, debuted several years ago as the brainchild of some heavy hitters in the dietary supplement arena, said interim president and CEO John Fieldly.

“The original formulation of Celsius is the result of some experienced individuals coming together from the dietary supplement space, one of whom was Greg Horn, former CEO of GNC,” Fieldly told NutraIngredients-USA. “They wanted to create a product that was truly thermogenic and in the form of a dietary supplement that could really disrupt the beverage category.”

“They created a formula with a variety of ingredients in proprietary blend that is proven to burn 100 to 140 calories after consumption,” Fieldly said.

Science based on finished product

The formula includes extracts of green tea, ginger and guarana. Fieldy said that what sets Celsius apart is that the effects of these ingredients are not merely inferred from general ingredient studies. Rather, the company has conducted seven clinical trials on its finished formula to verify its effects. Fieldly said this practice of extrapolation could be seen as a side effect of the structure/function claim regime that was put into place under DSHEA. The envelopes of these claims can be stretched to fit a lot of products, in his view. Whether the strength and composition of the ingredients in those finished products matches what was used in the published studies can sometimes be an open question.

“There are a lot of companies in our space that are making structure/function claims based on the particular ingredients. Our studies are based on the actual finished good. We have seven clinical studies conducted by a well-respected university researcher and published in peer reviewed journals,” Fieldly said.

“Today we have really capitalized on that and our brands are among the best performing fitness products,” he said.

Line extensions

Celsius recently expanded its product line with an ‘all natural’ form of the original formula that uses natural sweeteners and naturally-derived caffeine. In mid 2017, it launched a more aggressive sports brand called Celsius Heat that includes 300 mg of caffeine (more than the original formula) and 2000 mg of the amino acid citrulline.

“Celsius Heat is really our trainer grade beverage,” Fieldly said. “We’ve taken that proven technology in our core line and translated that into something for serious gym goers. We believe it has healthier ingredients than some of the competition. It does have that 300 mg of caffeine, which is quite a bit more than a standard cup of coffee, but its similar to what you would get in a lot of drinks at Starbucks.”

Fieldly said that the message of cleanliness and scientific evidence has proven to be a winner in the sports nutrition space, leading to nationwide distribution including in the convenience store channel.

“The product has only been in the market for about nine months and we’ve already done more than $2 million in retail sales,” Fieldly said.

Distribution in China

The brand’s science backing and commitment to eschew questionable ingredients has attracted investment interest. Among the investors in the brand is billionaire Hong Kong businessman Li Ka-shing, who put $16 million into the company in 2015. Li has been buying into US dietary supplement companies with the idea of bringing those products into distribution in Hong Kong and mainland China.

Celsius is expanding distribution in Hong Kong via a partnership with retail chain store operator A.S.Watson Industries, a Li subsidiary. And since September the brand has been in distribution in mainland China via a partnership with Qifeng Food Technology. According to the company the initial distribution footprint includes megacities Beijing, Guangzhou and Shenzhen as well as more than 30 other cities in 14 provinces.

“China is a very interesting market for us. The economy continues to grow, and more consumers are gaining disposable income. Within the food and beverage category, the energy beverage market is still in its early stages, which is a great opportunity for us. Qifeng Foods has more than 500 distributors under them,” Fieldly said.

“Partnering with Celsius is a great opportunity for us to promote health throughout China. It is a robust product line of great tasting, functional drinks backed by scientific research which gives Celsius a competitive edge," said Madame Wang, one of the founders of Qifeng Food Technology, which concentrates on distribution beverages and snacks.