USA — Monster Beverage Corp. saw sales in fiscal 2021 exceed US$5.5 billion for the first time in the company’s history despite significant supply chain challenges that hampered production and distribution of products.  

Net sales were US$5.54 billion, up 21% from US$4.6 billion a year ago with net changes in foreign currency exchange rates having a positive impact of US$61.9 million on sales, according to the company. 

Net income for the fiscal year ended Dec. 31, 2021, was US$1.38 billion, equal to $2.61 per share on the common stock, down 2% from $1.41 billion, or $2.66 per share, in fiscal 2020. 

The fall in income could be attributed to greater costs associated with higher commodity prices that many food producers had to grapple with in 2021. 

Monster Beverages distribution capacity was also limited by freight inefficiencies, shortages of shipping containers, and port of entry congestion. 

Delays in the receipt of certain ingredients and a lack of sufficient co-packing capacity also limited the energy drinks maker’s ability to fully satisfy demand. 

While those pressures could ease in 2022 with two new suppliers coming onstream in the United States, the overall outlook remains uncertain. 

Hilton H. Schlosberg, co-chief executive officer and vice chairman of the board at Monster Beverage Corp., confirmed this uncertainty, particularly in relation to the cost of aluminium cans. 

“There’s been costs across the board,” Mr. Schlosberg said. “Some of these costs are transitory. Some of the costs may stick. Will aluminum stay at this level? I don’t think anyone knows.” 

For the fourth quarter ended Dec. 31, net income at Monster was down 32% to US$321.3 million, equal to 61¢ per share on the common stock. 

Q4 sales however surged 19% to US$1.43 billion from US$1.2 billion mainly driven by the Monster Energy Drinks segment. 

The segment which primarily includes the company’s Monster Energy drinks, Reign Total Body Fuel high performance energy drinks and True North Pure Energy Seltzers, saw sales jump 21% to $1.35 billion from $1.12 billion in the fourth quarter of 2020.  

Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the segment of approximately US$2.7 million. 

Sales for the Strategic Brands segment, which primarily includes energy drink brands acquired from The Coca-Cola Co., as well as the company’s affordable energy brands, decreased 3.5% to $65.6 million from $67.8 million. 

Monster attributed the drop in sales to shortages of flavor concentrates for certain NOS brand energy drinks.  

Sales to customers outside the United States increased 32% to US$508 million in the fourth quarter from US$348.8 million a year ago, accounting for 36% of total net sales.  

Comparative net sales for the fourth quarter were negatively impacted by US$15.2 million related to product returns from customers in Europe and Japan.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE