When people think of historically top-performing stocks, they often think of tech giants such as Apple, Amazon, Netflix, and Tesla.

However, there's a food and beverage company that has seen tremendous growth, and that's Monster Beverage Corporation.

From early 2000 to October 22, 2019, the company's stock price surged by 624 times, making it the highest-returning US stock of the past 20 years. This means that if you invested US$100 in Monster Beverage stock in 2000, your shares would be worth US$62,444 at the end of 2019.

This article explores what makes this energy drink company stand out.

01 Company Introduction

Company history: Monster Beverage is an energy drink company.

●In 1935, its predecessor, Hansen, was established and primarily sold juice products.

●In 1998, Hansen went bankrupt and was acquired by California CoPackers, then renamed Hansen Natural.

●In 2012, energy drinks became the company's largest source of revenue and shareholders agreed to rename it Monster Beverage.

●In 2015, Coca-Cola bought 16.7% of Monster Beverage for US$2.15 billion and the two companies integrated parts of their business. Monster Beverage gave its non-energy drink business (including tea and carbonated drinks) to Coca-Cola, while Coca-Cola gave its energy drink products to Monster Beverage.

●In 2022, the company announced a US$330 million acquisition of craft beer and hard seltzer producer Canarchy Craft Brewery Collective.

Culture: The success of Monster Beverage Company lies in its unique brand positioning and promotion of extreme sports. The company targets a young, adventurous, and energetic audience and showcases this positioning in its product packaging.

For instance, the claw logo on the black beverage can represent fashion, excitement, and individuality. The company has incorporated these ideas into its corporate values, constantly innovating to meet consumer demands.

02 Business Model

Product: Monster Beverage offers 32 different drink brands with a total of 178 products. Their most popular product is Monster Energy Drink, but they also make drinks for other brands, soda water, and alcoholic drinks.

They sell their products in over 157 countries through a large distribution network.

Marketing: To attract customers, the company uses a low-price strategy by selling 16-ounce cans of their energy drinks for the same price as an 8.3-ounce can of Red Bull. They don't advertise on TV, but instead focus on sponsoring extreme sports events like motocross, surfing, and skateboarding.

Business segment: Monster Beverage Company made US$6.311 billion in revenue in 2022 and earned US$1.192 billion in profit. Most of their revenue, 92.43%, came from selling Monster Energy Drink, which made US$5.83 billion. The biggest market for their products was the United States and Canada, which contributed US$4.12 billion or 65.21% of their total revenue.

03 Financials

Revenue: Monster Beverage Company's sales have been increasing steadily over the past few years, with a 13.89% growth rate in 2022.

Gross margin: The company's gross profit margin was 50.3% in 2022, which is lower than the 56.1% recorded in 2021. This is because the cost of aluminum metal packaging materials has increased.

Net profit: The company's profit growth has slowed down, and it has even decreased since 2021. This is mainly due to increased costs related to the company's operations, including production and sales.

04 Industry Trends

Market size: The global energy drink market, where Monster Beverage Company operates, was worth US$45.8 billion in 2020. It is expected to grow at a compound annual rate of 8.2% and reach US$104 billion by 2031, according to Polaris Market Research.

Industry Comparison: Monster Beverage Company is part of the non-alcoholic beverage industry. The industry's top four companies, based on market value, are Coca-Cola, PepsiCo, Monster Beverage Company, and Keurig Dr Pepper Inc. Among these companies, Monster Beverage Company ranks third.

05 Shareholder Holdings

Monster Beverage Company's equity structure is relatively clear, with the largest shareholder being Coca-Cola, holding approximately 19.51% of the shares. The second-largest shareholder is Vanguard Group, holding approximately 5.96%.

The largest individual shareholder is the company's co-CEOs, Hilton Schlosberg and Rodney Sacks, holding 0.14% respectively.

06 Risks and Challenges

1. The price increase of aluminum can raw materials may affect the company's profitability.

2. The company's major source of revenue comes from Monster Energy Drink, and the company may be affected by increased industry competition.