Major shareholder Russ Savage says Celsius needs new leadership as he raises concerns about the company’s flagship brand.
Rockstar Energy founder Russ Savage has built a stake worth roughly $300 million in Celsius Holdings and is calling for a leadership shake-up, saying the company needs a new chief executive to revive its flagship energy drink brand.
Savage, who owns more than 12 million shares, or about 4.7% of Celsius, said he wants CEO and Chairman John Fieldly, along with the company’s chief operating officer, brand manager, and marketing manager, removed. He has also publicly offered to lead the company himself.
“The CEO has lost credibility with the investment community,” Savage told CNBC. “I’m publicly volunteering to do it.”
From Rockstar Founder to Activist Shareholder
Savage founded Rockstar Energy in 2001 after borrowing $50,000 against his condominium. He built the brand into one of the largest energy drink companies in the United States before selling it to PepsiCo for $3.85 billion in 2020.
Ironically, Rockstar’s U.S. and Canadian business is now managed by Celsius following the companies’ strategic partnership with PepsiCo.
Savage revealed his position after Celsius shares fell 18% following disappointing second-quarter earnings. The stock later rebounded around 13% after news of his investment and leadership demands became public.
Why Savage Wants Change
Although Celsius reported record second-quarter revenue of $817.9 million, up 11% year-on-year, the results fell short of analysts’ expectations.
Net income declined 45% to $55.3 million.
The company’s biggest concern remains its flagship Celsius brand, whose revenue declined 11.7% from a year earlier. Retail sales in the U.S. also fell 2%.
By contrast, Alani Nu, acquired by Celsius in a $1.8 billion deal last year, recorded 55.7% growth in retail sales. Rockstar, meanwhile, posted a 13% decline.
Across all three brands, combined retail sales increased 31%.
Savage believes Celsius has weakened its market position by cutting products and reducing shelf space.
“Once you lose shelf space, you’re dead. The chains will give it to Red Bull or Monster,” he said.
Celsius Defends Its Strategy
Celsius says the reduction in product offerings was intentional.
The company reduced distribution points for the Celsius brand by around 7% as it removed slower-selling products. However, revenue generated from the remaining distribution points increased by approximately 16% between the first and second quarters.
During the company’s earnings call, Fieldly acknowledged that Celsius had “gone too deep” with its product rationalization efforts.
Industry analyst Duane Stanford, editor of Beverage Digest, said the company’s challenge may be less about leadership and more about managing the transition from a single-brand business to a diversified portfolio.
He noted that Celsius must clearly demonstrate how its long-term multi-brand strategy will restore growth while strengthening its flagship brand.
Board Continues to Back Fieldly
Savage said he began buying Celsius shares in March after spending more than a year advising the company on strategy, claiming many of his recommendations were ignored.
Celsius responded by saying its board and management have engaged with Savage multiple times over the past few years and remain open to shareholder ideas that could create value.
When asked whether the board still supports Fieldly as CEO, the company gave a one-word response: “Yes.”
Can Savage Force a Leadership Change?
While Savage’s 4.7% stake is not enough to remove the CEO on its own, governance experts say it gives him significant influence.
April Klein, a professor at NYU Stern School of Business, said activist investors have often succeeded in driving strategic or leadership changes without launching formal proxy battles.
Ryan Nebel, vice chair of shareholder activism practice at Olshan Frome Wolosky, added that investors with even smaller holdings have successfully pushed for boardroom changes.
PepsiCo Could Play a Key Role
One shareholder that could become decisive is PepsiCo, which owns roughly 11% of Celsius on an as-converted basis and has two directors on the company’s board.
Last year, PepsiCo transferred the Rockstar business in the U.S. and Canada to Celsius, expanded its investment in the company, and positioned Celsius as its strategic energy drink partner in the region.
With its significant ownership stake and board representation, Pepsi could play an influential role if shareholder pressure intensifies.
A Familiar Chapter for Celsius
This is not the first time Celsius has faced investor-led leadership changes.
In 2012, major investor Carl DeSantis took control of the struggling company and reshaped its management team. Fieldly joined as chief financial officer before becoming CEO in 2018, leading Celsius through years of rapid growth into one of the world’s largest energy drink companies.
Now, another prominent beverage entrepreneur believes the company needs a fresh reset as competition intensifies and growth in its flagship brand slows.
Source: Inc
Photo: Getty Images
