From Humble Beginnings, To One of the Best Performing Stocks Of The Last Century
Editorial Feature | April 26, 2023 | Health
One of the thought leaders behind Monster Energy, SoBe, NOS Energy, and Fuze is bringing innovation to the energy drink market again… with the launch of a healthy, plant-based alternative.
A rapidly-growing, plant-based beverage company is starting to draw attention, and for good reason.
You see, the company’s CEO, Todd Gibson was one of the people responsible for the very first energy drink sold in the US market, under the brand Hansen Natural.
A gamechanger to the beverage industry, Hansen’s energy drink quickly grew in popularity.
What started from humble beginnings, ultimately spawned a new multi-billion-dollar market sector.
Since that time, the global energy drink market has shot from $3.8 billion in 1999, to a $58.48 billion business last year, growing at a CAGR of 7.5%.1
That’s more than a 1,438% jump. And leading that charge was Hansen Natural.
Their novel drink was an immediate hit, dwarfing the company’s existing soft drink line, and leading them to seek a name change more in line with the new flagship product.
In 2012, the company was rebranded under Monster Beverage.
Now, the energy drink industry has seen some epic success stories in the past few decades, but none more so than Monster.2
Since the company’s initial public offering, shares of Monster have increased by +60,000%.
The California-based company launched their IPO in 2003, with shares trading at $0.10 and a market cap of under $1 million its share price has since surged to $52, lifting its market value to more than $54 billion.
That’s a startling fact…
It means Monster Energy has outpaced IT behemoths like Apple3, Amazon, and Nvidia to take the top spot on the list of the S&P 500’s best-performing stocks during the past 30 years.
Mr. Gibson has since applied that experience to brands like SoBe, Fuze Beverages, and NOS Energy…
And every one of these brands was acquired by Coca-Cola or Pepsi Cola during his tenure.
But a few years back, Mr. Gibson saw a new trend developing, and knew the industry was ready for a change.
In 2017, with the help of his equally accomplished wife Karrie, Todd Gibson moved forward with the launch a breakthrough new plant-based energy drink with the yerba maté at its core:
Yerbaé Brands Corp. (TSXV:YERB.U)(TSXV:YERB.U)
A $58 Billion Market Ripe for Disruption
While companies like Monster have dominated the industry for decades, health concerns and a shift towards healthier, natural alternatives have left room for new players to enter the market.
Consumers are increasingly looking for energy drinks that don’t come with the negative side effects often associated with traditional options.
That’s understandable given the health warnings about the safety of particular energy drinks.
This comes as no surprise given that the CDC estimates that one in three adults in the US have prediabetes, putting an astounding 96 million Americans at risk of acquiring diabetes4.
It is sustainably sourced and environmentally friendly, making it a guilt-free choice for those looking to boost their energy levels.
And because Yerbaé is Non-GMO verified, OU Kosher, vegan and gluten-free, it is suitable for a variety of dietary needs. That’s made it especially appealing to high-performance athletes and fitness experts.5
The Perfect ‘Clean Energy’ Plant
When it comes to optimal ingredients, Yerbaé Brands Corp. (TSXV:YERB.U)(TSXV:YERB.U) chose correctly with yerba maté.
Yerba maté is a natural herb known to be rich in antioxidants, minerals & vitamins, and can boost energy and improve mental focus.6
It contains naturally occurring caffeine, making it a popular choice for those looking for a boost of energy without the jitters and crashes associated with traditional caffeine sources.
The South American herb has been gaining a lot of attention lately…
After the recent conclusion of the 2022 FIFA World Cup of Football, the success of the Champion Argentinian squad has already been somewhat attributed to the team’s consumption of yerba mate.7,8,9
How fervently does Lionel Messi love yerba mate?
So much that, according to the Gulf Today Report, the Argentine winning team carried 500 kg or so of this energizing beverage to the World Cup.
Furthermore, Messi even posted a photo to Instagram of himself lounging in bed with two great cups:
The magnificent World Cup trophy and what appears to be a cup of yerba mate10.
That’s not the only celebrity athletes who are touting the benefits of Yerba Mate as an alternative to traditional caffeine sources.
Yerbae Brands has also become a staple in the Crossfit community, with two-time CrossFit Games champion, Annie Thorisdottir investing in the company.
Word is continuing to spread amongst the athletic community. The company has since added a myriad of Crossfit champions as brand ambassadors.
And was recently featured in a Fox and Friends special, who highlighted the product’s exceptional flavor, nutritional profile, and impact on energy levels, focus, and clarity.
Strong Financials And A Tight Cap Structure
It’s no wonder Yerbaé Brands Corp. (TSXV:YERB.U)(TSXV:YERB.U) went on a roll in 2022, generating revenue of $7.2 million. Given the still-early stage of the story, this was a huge achievement and a sign of the company’s growing success.
Gross margin is an important measure of a company’s financial health, and Yerbaé has a strong one, bringing in 53% with freight and 67% without.
In terms of organic growth, the company saw its e-commerce sales take off with a 50% increase from the previous year. More and more customers are choosing to shop online, and Yerbaé is meeting that demand.
So far customer feedback has been excellent, with 79% of buyers returning to Amazon to purchase more.
Since 2017, the company has generated $25.5 million in sales, sold 24 million cans, and their products are now in 10,000 retail locations, including Safeway, Albertsons, and Costco.
As well as opened new distribution in roughly 10,000 Compass locations across the country.
In the April 13 press release, Todd Gibson stated,
“This is an incredible opportunity for the company to increase brand awareness across 18 states and we couldn’t be more excited for what the future holds for our brand and consumers.”
Yerbaé is also growing its financial strength.
The company raised nearly $6 million in its first three years and when combined with the company’s minimal debt (less than $700k at the time of the most
recent financing), high margins, and yearly sales growth, Yerbaé Brands Corp. (TSXV:YERB.U)(TSXV:YERB.U) will have greater resources to maintain its growth trajectory.11
All the while, Yerbaé has kept its share structure tight and maintained a high amount of insider ownership, showing management is willing to put their own skin in the game.
Between the two co-founders heading into its go-public transaciton with Kona Bay Technologies Inc., Todd and Karrie Gibson each owned approximately 31.01% of the company.
With figures like these, it’s no wonder its beginning to capture market attention following its public launch. Especially as the energy drink market continues to soar, even in spite of overall market conditions.
The Global Energy Drink Market Continues To Dominate
In recent months, it’s become clear in the industry that Energy Drink Stocks were defying an overall general market slump.
For example, even with dividends, an investor who invested in the S&P 500 12 months ago would have lost about 14% of their capital. If they had chosen the NASDAQ 100, which is heavily weighted toward “Big Tech” names, the investor would be down 26%. However, if an investor had put their money into Monster Beverage, they would have made a 13% profit.12
And it’s also important to note that a $10,000 investment in Monster Beverage when it was a penny stock 20 years ago would have turned into roughly $14 million today.13
Even the shorter term has seen huge gains, as evidenced by a 4-stock basket that included Celsius Holdings, Monster Beverage, National Beverage, and REEDS turned a $10,000 investment into $51,057 for a return of 410.57%, and an annualized return of 38.55%!14
7 Reasons Supporting Growth Of Yerbaé Brands Corp. (TSXV:YERB.U)(TSXV:YERB.U)
- Fast Growing Passionate and Loyal Customer Base: To date, Yerbaé has racked up impressive sales statistics with over $25.5 million in lifetime sales, presence in over 10,000 retail locations, over 24 million cans sold, and a 79% customer retention rate on Amazon.
- Disruptive Innovation Pipeline: Because of the formulation of Yerbaé’s products, the company has built a disruptive innovation pipeline, capable of quickly developing new products and flavors, and directly marketing them to a faithful group of loyal customers.
- Efficient and Scalable Supply Chain: Given the contacts and experience of the management team, Yerbaé has been strategically built to allow for efficient and scalable growth along its supply chain. As the demand grows, the company is built to succeed and grow with it.
- Omni-Channel Distribution for Nationwide Expansion: Today Yerbaé products are already available to customers in a multitude of places, including conveniences stores, shopping clubs, grocery store chains, pharmacy chains, food services at entertainment venues, natural foods markets, massive big box stores, and direct to consumers via online sales.
- Dynamic Leadership Team and Board with Proven Track Record: Co-Founders Todd and Karie Gibson bring to the company multiple strengths in distribution and innovation, as well as a proven track record of success. Todd and Karrie Gibson together own approximately 31.00% of the company. The type cap structure and its dynamic Board of Directors with experience in accelerating growth makes a solid team.
- Booming Energy Drink Market, Ripe for Disruption: Not wanting to lose out on the Monster Energy Drink phenomena, big drink companies have staked huge investments into the energy drink space, including PepsiCo, Gatorade, Starbucks, and Keurig Dr Pepper. However, with many relying on high sugar content and high caffeine/taurine additives to work, the desire for cleaner energy drinks has yet to be fully addressed… until now.
- Yerba Mate is a Clean Plant Source for Energy: Used for centuries in South America, the herb has a long history of energizing and revitalizing properties, while also containing naturally occurring caffeine and being packed with nutrients, including vitamins, minerals, and antioxidants. It’s been shown to boost energy, improve mental clarity and focus, and even support weight loss efforts. It’s also a market that’s growing, as the Global Yerba Mate Market is expected to grow by $290.24 through to 202615.
Yerbaé Brands (TSXV:YERB.U)(TSXV:YERB.U) is proving to be a company with a strong financial performance, solid growth potential, and a loyal customer base.
As the company releases more positive developments, this innovative company has the opportunity to expand its market share.
11 https://www.researchandmarkets.com/reports/5744354/energy-drinks-global-market-report
2 https://markets.businessinsider.com/news/stocks/this-centurys-best-performing-us-stock-sells-energy-drinks-not-iphones-2019-4-1028114374
3 https://mybroadband.co.za/news/investing/460946-company-started-by-two-wits-graduates-outperforms-apple-and-amazon.html
4 https://www.cdc.gov/diabetes/prevention/about-prediabetes.html#:~:text=There%20are%2096%20million%20American,2%20diabetes%20within%205%20years.
5 https://www.boxrox.com/mal-obrien-katrin-davidsdottir-and-annie-thorisdottir-team-up-for-wodapalooza/
6 https://www.healthline.com/nutrition/8-benefits-of-yerba-mate#TOC_TITLE_HDR_4
7 https://www.nytimes.com/2022/12/13/sports/soccer/argentina-yerba-mate.html
8 https://www.tastingtable.com/1139479/yerba-mate-may-be-key-to-argentinas-world-cup-success/
9 https://www.rollingstone.com/culture/culture-commentary/world-cup-argentina-yerba-mate-coca-1234649135/
10 https://www.eatthis.com/yerba-mate-benefits-lionel-messi-favorite-drink/
11 https://www.sec.gov/Archives/edgar/data/1823354/000166516022001804/offeringmemoformc.pdf
12 https://foodinstitute.com/focus/how-energy-drink-stocks-are-defying-the-market-slump/
13 https://foodinstitute.com/focus/how-energy-drink-stocks-are-defying-the-market-slump/
14 https://www.buyupside.com/sample_portfolios/energydrinks.php
15 https://www.globenewswire.com/news-release/2022/06/10/2460357/0/en/The-Global-Yerba-Mate-Market-is-expected-to-grow-by-290-24-mn-during-2022-2026-accelerating-at-a-CAGR-of-3-97-during-the-forecast-period.html
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