Celsius CEO says one of the scariest times for the energy drink brand was getting 'pink slipped' by Costco

• Celsius got its start back in 2004 as the first "negative calorie" soft drink.
• The company lost half of its revenue when Costco stopped selling it in 2012, its CEO said.

Long before Celsius became the beverage of choice for athletes like US Olympic sprinter Noah Lyles, the product hit the market in 2004 as the first "negative calorie" soft drink.

In spite of its popularity among the weight-loss community, the brand struggled to get mainstream traction.

Declining sales volumes led to a falling stock price, leading the company to be delisted from the Nasdaq exchange, which disallows any stock trading below $1 for extended periods.

Arguably the bigger hit came in 2012 when Costco quit carrying the product, costing Celsius over half of its revenue in one go, CEO John Fieldly recalled during a recent interview.

"We got our pink slip from Costco," Fieldly told Logan Bartlett on Bartlett's podcast. "That was a really scary time."

"Then we got delisted out of Walgreens and CVS within the next 30 days," he added. "It was difficult."

That all happened within a few months of Fieldly joining Celsius as CFO, and he has spent the subsequent years rebuilding the company from the studs. He would eventually be named CEO in 2018.

On the podcast, Fieldly credited southern grocery chains Publix and HEB with sticking with Celsius through that challenging patch when other retailers were walking away.

He also said that the decision to sell on Amazon helped propel the brand into a close rivalry with Monster at the top spot for energy drinks on the e-commerce site, as well as helping establish a consumer purchasing pattern that was unusual for the category.

"An energy drink is normally an impulse purchase," he said. Instead, customers were spending $25 on cases to stock their fridges, making Celsius "part of a daily lifestyle and a daily routine. That's really difficult to do, so we knew we had something special."

Bit by bit, the market shifted and the appetite for so-called "better for you" foods and beverages grew.

First with direct partnerships with retailers, then through a distribution agreement with AB InBev, Celsius grew from its niche in the health and beauty section and onto the beverage shelves to compete with juggernauts like Red Bull and Monster.

In 2022, the company struck a deal with PepsiCo for an 8.5% stake in Celsius and distribution support, which led revenue to double.

Now, Celsius is the third largest energy drink brand behind Red Bull and Monster, representing one-tenth of the sales in the segment, thanks in large part to the Pepsi partnership, a spokesperson told Business Insider.

"If you took Celsius out of the energy drink category, it's flat to down so we're driving the incremental growth within the category, which is really great to see," he said.

It's also carried by most US grocery retailers — including Costco.