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Expect price increases soon on your favorite energy drinks

In this article:
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Yahoo Finance’s Brian Sozzi and Julie Hyman break down why the prices of energy drinks are soon going to skyrocket.

Video Transcript

BRIAN SOZZI: From Twitter polls to Red Bull, a topic I know pretty well, Julie. And I posted this story yesterday and it found its way to the yahoo.com home page on a potential looming price increase for Red Bull. And Stifel, the team over at Stifel suggested that Red Bull may be about to raise prices in large part because of inflation. Inflation in aluminum. Aluminum prices have gone through the roof over the past year. Sugar prices, of course, a key ingredient in that Red Bull you're seeing on the screen, if you like the sugar kind. If not, no sugar is an option too for you. Sugar prices have gone up I believe 33% on the year.

Now you have seen, we talked to PepsiCo's CFO Hugh Johnston earlier in the week, they have taken price increases here on their beverages, and also their snacks. So the next shoe to drop here could be price increases on energy drinks. And really, everybody in this industry waits for category leader, Red Bull, to take that price increase. The team over at Stifel suggesting that price increase might happen soon. And then because of it, Monster, which is the second major player in this industry, they might soon follow with a price increase of their own to protect their profit margins.

JULIE HYMAN: This will surprise approximately no one probably who watches this show regularly, but I am not an energy drink consumer, so I'm not personally concerned so much about this one. You, however, this is, I don't know, where are you going to be making cuts to be able to still afford your energy drink habit?

BRIAN SOZZI: Well, I just want to make it very clear. In my advancing age, I have gone away from energy drinks. So I am really, the only caffeine I'm having now today is really 18 ounces of coffee, whether I make it here or I meet our producer, Val, at Starbucks. It's really one of those two. So this is natural high energy Sozz. You know, I don't need those energy drinks anymore to bring you the productivity, Julie.

JULIE HYMAN: That is amazing. And I did not, I didn't fully recognize that. I guess because you do seem so energized to me a lot of the time.