People Think Costco’s New Energy Drinks Look Very Familiar

The energy drink market now has a new entrant. In late March, Costco launched its own brand of Kirland energy drinks, which has left many wondering about the implications of the play for the wholesale retailer. The move seems designed explicitly to increase competition for Celsius, the purveyors of caffeinated, sparkling energy drinks that have grown in popularity in recent years.

Now that Costco has its own energy drinks, many want to better understand whether there are any differences between its product and Celsius. Here's what we know.

Costco's Kirkland Signature energy drinks come in a pack of 24 and retail for $16.99. The beverages each have 200 mg of caffeine (roughly double the amount in 8 oz of coffee), and they come in three flavors: peach, orange, and tropical. Costco already has an energy shot product, but these Kirkland Signature drinks are the first full-sized energy drinks to come out of the retailer.

As is often the case for Costco products, the main advantage they have is on price. These drinks cost roughly $.70 per can, whereas Celsius drinks cost $1.82 per can. If it holds up to the standards that Celsius and other energy drinks on the market provide, then it's safe to assume that shoppers on a budget will happily take advantage of their Costco memberships in order to save some money on this particular item.

Kirkland Signature has become a major moneymaker for Costco precisely because they're often able to undercut competitors on cost by a substantial margin. Given that these energy drinks are still new, it will take some time to determine whether this move was effective in this space, but given that Costco has launched the drinks, it seems clear that they see this as a space where they can make a play.

As traders are discussing on X (formerly known as Twitter), the rollout of these energy drinks has had a pretty negative impact on Celsius's parent company's stock price. Some analysts, though, don't think that Costco can really take Celsius off the market altogether, even if they can undercut some of the brand's wholesale activity.

"According to JP Morgan, Kirkland Sparkling Energy is priced at a significant discount in Costco ($16.99 for a 24-pack vs. $27.23 for a Celsius 18-pack). While the initial Costco rollout could get ample trial and impact next few quarter sales, we highly doubt the Kirkland Signature product will meaningfully impact long-term CELH valuation," analyst Gary Black explained.

There are, of course, still major questions about whether the taste of the Kirkland product can measure up to what's being offered by Celsius.

Even if Kirkland can undercut some of Celsius's sales, it will only be offered at Costco stores across the country, leaving a pretty large market of non-Costco shoppers who seem likely to stay loyal to Celsius for the foreseeable future.