What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-28 compared with 2021-03-01 · 121 added, 99 removed, 325 unchanged (40% of the section changed)

6 unchanged sentences

● Monster Rehab®

● Monster MAXX®

● Monster Energy®Nitro

● Java Monster®

14 unchanged sentences

● Relentless®

● True North®

Industry Overview

4 unchanged sentences

Reportable Segments

We have three operating and reportable segments, (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of our Monster Energy® drinks and Reign Total Body Fuel® high performance energy drinks, (ii) Strategic Brands segment (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as our affordable energy brands, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary, to independent third-party customers (the “AFF Third-Party Products”).

We have three operating and reportable segments, (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of our Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks and True North® Pure Energy Seltzers, (ii) Strategic Brands segment (“Strategic Brands”), which is comprised primarily of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as our affordable energy brands, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors LLC (“AFF”), a wholly-owned subsidiary of the Company, to independent third-party customers (the “AFF Third-Party Products”).

Our Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage distributors.

16 unchanged sentences

In 2016, we completed our acquisition of flavor supplier and long-time business partner AFF.

CANarchy Acquisition

On February 17, 2022, we completed our acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”), a craft beer and hard seltzer company, for $330.0 million in cash, subject to adjustments.

The transaction allows us to enter the alcohol beverage sector and brings the Cigar City family of brands including Jai Alai IPA and Florida Man IPA, the Oskar Blues family of brands including Dale’s Pale Ale and Wild Basin Hard Seltzers, the Deep Ellum family of brands including Dallas Blonde and Deep Ellum IPA, the Perrin Brewing family of brands including Black Ale, the Squatters family of brands including Hop Rising Double IPA and Juicy IPA and the Wasatch family of brands including Apricot Hefeweizen to our beverage portfolio.

The transaction does not include CANarchy’s stand-alone restaurants.

Our organizational structure for our existing energy beverage business will remain unchanged.

CANarchy will function independently, retaining its own organizational structure and team.

2021 Product Introductions

During 2021, we continued to expand our existing energy drink portfolio by adding additional products to our portfolio in a number of countries and further developed our distribution markets.

During 2020, we sold the following new products to our bottlers/distributors:

● Monster Energy® Dragon Ice Tea TM Lemon (Brazil)

● Monster Energy® Dragon Tea TM (China)

● Monster Energy Ultra Fiesta®

● Monster Energy Ultra Rosa®

● Monster Energy Ultra® Watermelon

● Monster Hydro® Super Sport Blue Streak

● Monster Hydro® Super Sport Red Dawg

● Juice Monster® Khaotic® Energy + Juice

● Juice Monster® Papillon TM Energy + Juice

● Java Monster® 300 French Vanilla

● Java Monster® 300 Mocha

● Reign Total Body Fuel® Lilikoi Lychee

● Reign Inferno® Thermogenic Fuel Jalapeno Strawberry

● Reign Inferno® Thermogenic Fuel Red Dragon

● Reign Inferno® Thermogenic Fuel True BLU

● Burn® Dark Energy

● Burn® Peach

● Burn® Zero Raspberry

● Nalu® Black Tea & Passion Fruit

● Nalu® Green Tea & Ginger

● Fury® Gold Strike

● Ultra Energy® Peach Mango

● Ultra Energy® Zero Raspberry

● Monster Energy® Dragon’s Gold (China)

During 2021, we sold the following new products to our customers:

• Fury® Mean Green

• Monster® (stylized) Reserve Watermelon

• Monster® (stylized) Reserve White Pineapple

• Monster Energy® Super Cola® (Japan)

• Monster Energy® Ultra Gold®

• Monster Hydro® Energy Water Watermelon

• Monster Hydro® Super Sport TM Killer Kiwi TM

• Monster Hydro® Super Sport TM Macho Mango TM

• Rehab® Monster® Strawberry Lemonade

• Mother® Zero Sugar Razzle Berry

• Nalu® Hibiscus Rooibos

• Play® Zero Raspberry

• Predator® Malt Smash

• Predator® Mango Mayhem

• Predator® Spicy Ginger

• Predator® Tropical

• Reign Inferno® Thermogenic Fuel Watermelon Warlord

• Reign Total Body Fuel® Cherry Limeade

• Reign Total Body Fuel® White Gummy Bear

• True North® Pure Energy Seltzer Black Cherry

• True North® Pure Energy Seltzer Cucumber Lime

• True North® Pure Energy Seltzer Grapefruit Lemonade

• True North® Pure Energy Seltzer Mandarin Yuzu

• True North® Pure Energy Seltzer Watermelon Mist

• True North® Pure Energy Seltzer White Peach Pear

In the normal course of business, we discontinue certain products and/or product lines.

4 unchanged sentences

We offer the following energy drinks under the Monster Energy® drink product line:

Monster Energy®, Lo-Carb Monster Energy®, Monster Assault®, Monster Energy® Fury®, Juice Monster® Khaos®, Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® Papillon TM , Juice Monster® Pipeline Punch®, Juice Monster® Ripper®, Monster® Mango Loco, Monster Energy® Absolutely Zero, Monster Energy® Import, Monster Energy® Export, M3(stylized)®, Monster Energy® Super Concentrate, Monster Mule®, Monster Cuba Libre®, Monster Energy Zero Ultra®, Monster Energy Ultra Black®, Monster Energy Ultra Blue®, Monster Energy Ultra Citron®, Monster Energy Ultra Fiesta®, Monster Energy Ultra Gold®, Monster Energy Ultra Paradise®, Monster Energy Ultra Red®, Monster Energy Ultra Rosa®, Monster Energy Ultra Sunrise®, Monster Energy Ultra Violet®, Monster Energy Ultra® Watermelon, Monster Energy® Mixxd Punch, Monster Energy® Gronk, Monster Energy® Valentino Rossi and Monster Energy® Lewis Hamilton 44.

Monster Energy®, Lo-Carb Monster Energy®, Monster Assault®, Monster Energy® Fury®, Juice Monster® Aussie Style Lemonade TM , Juice Monster® Khaos®, Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® Papillon TM , Juice Monster® Pipeline Punch®, Juice Monster® Ripper®, Monster® Mango Loco, Monster Energy® Zero Sugar, Monster Energy® Import, Monster Energy® Export, M3(stylized)®, Monster Energy® Super Concentrate, Monster Mule®, Monster Cuba Libre®, Monster Energy Zero Ultra®, Monster Energy Ultra Black®, Monster Energy Ultra Blue®, Monster Energy Ultra Citron®, Monster Energy Ultra Fiesta® Mango, Monster Energy® Ultra Gold®, Monster Energy Ultra Paradise®, Monster Energy® Ultra Peachy Keen®, Monster Energy Ultra Red®, Monster Energy Ultra Rosa®, Monster Energy Ultra Sunrise®, Monster Energy Ultra Violet®, Monster Energy Ultra® Watermelon, Monster Energy® Mixxd Punch, Monster Energy® Valentino Rossi, Monster Energy® Lewis Hamilton 44, Monster Energy® Super Cola® (Japan), Monster® (stylized) Reserve Watermelon and Monster® (stylized) Reserve White Pineapple.

Espresso Monster® Espresso + Energy Drinks – a line of non-carbonated dairy based espresso + energy drinks.

3 unchanged sentences

We offer the following coffee + energy drinks under the Java Monster® product line:

Java Monster® 300 French Vanilla, Java Monster® 300 Mocha, Java Monster® Farmer’s Oats, Java Monster® Irish Blend®, Java Monster® Kona Blend, Java Monster® Loca Moca®, Java Monster® Mean Bean®, Java Monster® Salted Caramel, Java Monster® Swiss Chocolate and Java Monster® Vanilla Light.

Monster Energy® Dragon Iced Tea TM Energy Teas – a line of non-carbonated energy teas.

We offer the following energy teas under the Monster Energy ® Dragon Iced Tea TM product line in different countries:

Green Tea, White Tea and Lemon Ice Tea.

Green Tea, Peach Tea, Raspberry Tea and Lemon Tea.

Monster Hydro® includes two product lines:

1 unchanged sentence

Monster Hydro® Energy Water is a line of non-carbonated, lightly sweetened refreshment + energy drinks.

We offer the following refreshment + energy drinks

under the Monster Hydro® Energy Water product line:

We offer the following refreshment + energy drinks under the Monster Hydro® Energy Water product line:

Blue Ice®, Watermelon®, Purple Passion®, Tropical Thunder® and Zero Sugar.

1 unchanged sentence

We offer the following refreshment + energy drinks under the Monster Hydro® Super Sport product line:

Blue Streak and Red Dawg.

Monster HydroSport Super Fuel® Hydration + Energy Drinks – a zero sugar line of non-carbonated, advanced hydration + energy drinks with BCAA’s.

Blue Streak, Killer Kiwi, Macho Mango and Red Dawg.

Monster HydroSport Super Fuel® Hydration + Energy Drinks – a line of non-carbonated, advanced hydration + energy drinks with BCAA’s.

We offer the following advanced hydration + energy drinks under the Monster HydroSport Super Fuel® product line:

Charge, Hang Time and Striker.

Monster MAXX® Energy Drinks – a line of carbonated energy drinks containing nitrous oxide.

We offer the following energy drinks under the Monster MAXX® product line:

Eclipse, Mango Matic, Rad Red, Solaris and Super Dry.

Monster Rehab® Energy Drinks – a line of non-carbonated energy drinks with electrolytes.

We offer the following energy drinks under the Monster Rehab® drink line:

Monster Rehab® Tea + Lemonade + Energy, Monster Rehab® Tea + Orangeade + Energy, Monster Rehab® Peach Tea + Energy, Monster Rehab® Raspberry Tea + Energy and Monster Rehab® Strawberry Lemonade + Energy.

Blue Streak, Charge, Hang Time and Striker.

Monster Energy® Nitro – a line of carbonated energy drinks containing nitrous oxide.

We offer the following energy drink under the Monster Energy® Nitro product line:

Rehab® Monster® Energy Drinks – a line of non-carbonated energy drinks with electrolytes.

We offer the following energy drinks under the Rehab® Monster® product line:

Orangeade, Peach Tea, Raspberry Tea, Strawberry Lemonade, Tea + Lemonade and Watermelon.

Muscle Monster ® Energy Shakes – a line of non-carbonated energy shakes containing 27-grams of protein.

3 unchanged sentences

We offer the following high performance energy drinks under the Reign Total Body Fuel® product line:

Carnival Candy, Cherry Limeade, Lemon Hdz, Lilikoi Lychee, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry, Sour Apple, Strawberry Sublime and White Gummy Bear.

Carnival Candy, Cherry Limeade, Lemon Hdz, Lilikoi Lychee, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry,Reignbow Sherbet, Sour Apple, Strawberry Sublime and White Gummy Bear.

Reign Inferno ® Thermogenic Fuel High Performance Energy Drinks – a line of high performance energy drinks with a thermogenic performance blend in addition to BCAA’s, B vitamins, electrolytes, and CoQ10 with zero sugar.

1 unchanged sentence

Jalapeno Strawberry, Red Dragon, True BLU and Watermelon Warlord.

True North ® Pure Energy Seltzers – a line of natural, plant-based energy drinks with an immunity boost, containing zero sugar, sweeteners, artificial flavors or colors.

We offer the following energy seltzers under the True North® product line:

Black Cherry, Cucumber Lime, Grapefruit Lemonade, Mandarin Yuzu, Watermelon Mist and White Peach Pear.

Products – Strategic Brands Segment

1 unchanged sentence

We offer the following energy drinks under the BPM® product line:

Focus Berry Red, Hydrate Citrus Green, Sour Twist and Zero Orange.

Focus Berry Red, Hydrate Citrus Green,Mango, Sour Twist and Zero Orange.

BU® – a line of carbonated energy drinks.

6 unchanged sentences

We offer the following energy drinks under the Full Throttle® product line:

Blue Agave and Original (Citrus).

Original (Citrus) and True Blue.

Fury® – a line of affordable carbonated energy drinks.

We offer the following energy drink under the Fury ® product line:

We offer the following energy drinks under the Fury ® product line:

Gold Strike and Mean Green.

Gladiator® – a line of carbonated energy drinks.

5 unchanged sentences

We offer the following energy drinks under the Mother ® product line:

Epic Swell, Frosty Berry, Kicked Apple ®, Original, Passion, Sugar Free and Tropical Blast TM .

Epic Swell, Frosty Berry, Kicked Apple ®, Original, Passion, Sugar Free, Tropical Blast TM and Zero Sugar Razzle Berry.

Nalu® – a line of carbonated energy drinks.

We offer the following energy drinks under the Nalu ® product line:

Black Tea & Passion Fruit, Exotic, Frost, Green Tea & Ginger, Original, Passion and Refresh.

Black Tea & Passion Fruit, Exotic, Frost, Green Tea & Ginger,Hibiscus Rooibos, Original, Passion and Refresh.

NOS® – a line of carbonated energy drinks.

3 unchanged sentences

We offer the following energy drinks under the Play ® and Power Play® (stylized) product line:

Apple Kiwi, Mango, Passion Fruit, Original and Sugar Free.

Apple Kiwi, Mango, Passion Fruit, Original, Sugar Free and Zero Raspberry.

Predator® – a line of affordable carbonated energy drinks.

We offer the following energy drinks under the Predator ® product line:

Gold Strike, Mean Green, Purple Rain and Red Dawn.

Gold Strike, Malt Smash, Mango Mayhem, Mean Green, Purple Rain, Red Dawn, Spicy Ginger and Tropical.

Relentless® – a line of carbonated energy drinks.

12 unchanged sentences

We may also evaluate, and where considered appropriate, introduce additional types of consumer products we consider to be complementary to our existing products and/or to which our brand names are able to add value.

The Company also sells and/or enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, backpacks, hats, t-shirts, jackets, helmets and automotive wheels.

Products – Packaging

Our products are packaged in a variety of different package types and sizes including, but not limited to, aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends as well as polyethylene terephthalate (PET) plastic bottles and to a limited extent glass bottles.

Manufacture and Distribution

We do not operate our own manufacturing facilities for finished goods, but instead outsource the manufacturing process to third-party bottlers and contract packers.

AFF develops and manufactures the primary flavors for our Monster Energy® Drinks segment.

We also purchase flavors, concentrates, sweeteners, juices, supplement ingredients, cans, bottles, caps, labels, trays, boxes and other ingredients for our beverage products from ingredient suppliers, which are delivered to our various third-party bottlers and co-packers.

We do not operate our own manufacturing facilities for finished goods, but instead outsource the manufacturing process to third-party bottlers and contract packers.

We purchase flavor ingredients, flavors, concentrates, sweeteners, juices, supplement ingredients, cans, bottles, caps, labels, trays, boxes and other ingredients for our beverage products from ingredient suppliers, which are delivered to our various third-party bottlers and co-packers.

In some cases, certain common supplies may be purchased by our various third-party bottlers and co-packers.

13 unchanged sentences

For our Monster Energy® Drinks segment, we are generally responsible for arranging for the purchase and delivery to our third-party bottlers and co-packers of the containers in which our beverage products are packaged.

Our products are packaged in a number of locations, both domestically and internationally, which enables us to produce products closer to the markets where they are sold, with the objective of reducing freight costs as well as transportation-related product damages.

As distribution volumes increase in both our domestic and international markets, we will continue to source additional packing arrangements closer to such markets to further reduce freight costs.

Our products are packaged in a number of locations, both domestically and internationally.

As distribution volumes increase in both our domestic and international markets, we will continue to source additional packing arrangements.

Our ability to estimate demand for our products is imprecise, particularly with new products, and may be less precise during periods of rapid growth, particularly in new markets.

concentrates, coffee, tea, supplement ingredients, other ingredients and certain sweeteners, and/or procure adequate packing arrangements and/or obtain adequate or timely shipment of our products, we might not be able to satisfy demand on a short-term basis.

If we materially underestimate demand for our products and/or are unable to secure sufficient ingredients or raw materials including, but not limited to, aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, labels, flavor ingredients, flavors, juice concentrates, coffee, tea, supplement ingredients, other ingredients and certain sweeteners, and/or procure adequate packing arrangements and/or obtain adequate or timely shipment of our products, we might not be able to satisfy demand on a short-term basis.

(See “Part I, Item 1A – Risk Factors”).

For the majority of our products, including our Monster Energy® brand energy drinks, our Java Monster® product line, our Espresso Monster® product line, our Monster Hydro® product lines, our Monster HydroSport Super Fuel® product line, our Monster Super Fuel® product line, our Muscle Monster® product line, our Monster MAXX® product line, our Juice Monster® product line, our Reign Total Body Fuel® product line, our Reign Inferno® Thermogenic Fuel product line and certain of our other products, there are limited co-packing facilities in our domestic and international markets with adequate capacity and/or suitable equipment to package our products.

For most of our products there are limited co-packing facilities in our domestic and international markets with adequate capacity and/or suitable equipment to package our products.

We believe a short disruption or delay in production would not significantly affect our revenues;

15 unchanged sentences

(a) Amended and Restated Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, subject to TCCC’s approval, territories in Canada and the United States in which bottlers from TCCC’s network of wholly or partially-owned and independent bottlers (the “TCCC North American Bottlers”) will distribute and sell, or continue to distribute and sell, our Monster Energy® brand energy drinks.

(b) Amended and Restated International Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, countries, or territories within countries, in which we wish to appoint TCCC network bottlers to distribute and sell our Monster Energy® brand energy drinks, subject to TCCC’s

In February 2020, the Amended and Restated International Distribution Coordination Agreement with TCCC was renewed for an additional five-year term.

16 unchanged sentences

We have identified alternative suppliers for many of the ingredients contained in many of our beverages.

However, industry-wide shortages of certain flavors, fruits and fruit juices, coffee, tea, dairy-based products, supplement ingredients

and sweeteners have been, and could from time to time in the future be, encountered, which could interfere with and/or delay production of certain of our products.

We continually endeavor to develop back-up sources of supply for certain of our flavors and concentrates purchased from third-party suppliers, as well as to negotiate arrangements with our existing suppliers, which would enable us to obtain access to certain of such concentrates or flavor formulas under certain circumstances.

However, industry-wide shortages of certain flavor ingredients,flavors, fruits and fruit juices, coffee, tea, dairy-based products, supplement ingredients and sweeteners have been, and could from time to time in the future be, encountered, which could interfere with and/or delay production of certain of our products.

We continually endeavor to develop back-up sources of supply for certain of our flavor ingredients, flavors and concentrates purchased from third-party suppliers, as well as to negotiate arrangements with our existing suppliers, which would enable us to obtain access to certain of such concentrates or flavor formulas under certain circumstances.

We have been partially successful in these endeavors.

Additionally, in a limited number of cases, contractual restrictions and/or the necessity to obtain regulatory approvals and licenses may limit our ability to enter into agreements with alternative suppliers, manufacturers and/or distributors.

As a result of the COVID-19 pandemic, global inflation, unanticipated increases in demand, labor shortages and supply chain disruptions, we experienced shortages of certain raw materials, such as aluminum cans and ingredients, and increased import and operating costs in 2021 and will likely continue to experience such costs in fiscal year 2022.

See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Distribution and Supply Chain” for more information on such shortages and how we have, and will continue to, remediate such challenges in our supply chain.

The beverage industry is highly competitive.

3 unchanged sentences

We also rely on our bottlers and full service beverage distributors to allocate more attention to our products than those of our competitors, provide stable and reliable distribution and secure adequate shelf space in retail outlets.

Competitive pressures in the “alternative”, energy, coffee and “functional” beverage categories could cause our products to maintain or to lose market share or we could experience price erosion, which could have a material adverse effect on our business and results of operations.

Competitive pressures in the “alternative”, energy, coffee and “functional” beverage categories could cause our products to maintain or to lose market share or we could experience price erosion, which could materially impact our business and results of operations.

We have experienced and continue to experience competition from new entrants in the energy drink and energy shot categories.

A number of companies who market and distribute iced teas, coffees, juice cocktails, enhanced waters and sports drinks in various larger volume packages in glass and plastic bottles (including BODYARMOR, Vitamin Water, CORE, Snapple, Arizona, Ocean Spray, Honest Tea, Gold Peak Tea, Powerade, Gatorade Bolt 24 and Starbucks) and 12- and 16-ounce cans (such as Mountain Dew Kickstart and Amp Game Fuel), have added supplement ingredients to their products with a view to marketing their products as “functional” or energy beverages or as having “functional” benefits.

A number of companies who market and distribute iced teas, coffees, juice cocktails, enhanced waters and sports drinks in various larger volume packages in glass and plastic bottles (including BODYARMOR, Vitamin Water, CORE, Arizona, Ocean Spray, Powerade, Gatorade Bolt 24 and Starbucks) and 12- and 16-ounce cans (such as Mountain Dew Kickstart and Game Fuel), have added supplement ingredients to their products with a view to marketing their products as “functional” or energy beverages or as having “functional” benefits.

We believe that many of those products contain lower levels of supplement ingredients, principally deliver refreshment and are positioned differently from our energy or “functional” drinks.

7 unchanged sentences

Our products also compete with private-label brands such as those carried by grocery store chains, convenience store chains and club stores.

Domestically, our energy drinks compete directly with Red Bull, Rockstar, Amp and Amp GameFuel, Venom, VPX Redline, 5-Hour Energy Shots, MiO Energy, Stacker 2, VPX Bang, V8 + Energy, Uptime, hi*ball, CELSIUS, C4, Alani Nu, 3D Energy, Coca-Cola Energy, ZOA Energy, Rowdy Energy and many other brands.

Domestically, our energy drinks compete directly with Red Bull, Rockstar, MTN Dew Amp, MTN Dew Kickstart, MTN Dew GameFuel and MTN Dew Energy, G Fuel, Venom, VPX Redline, 5-Hour Energy Shots, MiO Energy, VPX Bang, V8 + Energy, Uptime, hi*ball, CELSIUS, C4, Alani Nu, 3D Energy, ZOA Energy, Rowdy Energy, GHOST Energy, Starbucks BAYA energy and many other brands.

In 2020, PepsiCo acquired Rockstar and entered into an agreement with VPX to distribute VPX Bang products in the United States.

markets and/or distributes additional products in that market segment such as Pepsi Max, Mountain Dew, Mountain Dew Kickstart and Mountain Dew Amp Game Fuel.

Internationally, our energy drinks compete with Red Bull (including non-carbonated Red Bull in China and Asia), Rockstar, V-Energy, Lucozade, Coca-Cola Energy and numerous local and private-label brands that usually differ from country to country, such as HELL, Amper, Shock, Tiger, Fearless, Boost, TNT, Shark, Dragon, Score, Sting, Hot 6, Suntory ZONE, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Vive 100, Dark Dog, Speed, Guarana, M-150, Lipovitan, Bacchus, Volt, Bolt, Mr.

PepsiCo also markets and/or distributes additional products in that market segment such as Pepsi Max, Mountain Dew, MTN Dew Energy, MTN Dew Kickstart and MTN Dew Game Fuel.

Internationally, our energy drinks compete with Red Bull (including non-carbonated Red Bull in China and Asia), Rockstar, V-Energy, Lucozade, and numerous local and private-label brands that usually differ from country to country, such as HELL, Amper, Shock, Tiger, Fearless, Boost, TNT, Shark, Dragon, Score, Sting, Hot 6, Suntory ZONE, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Vive 100, Dark Dog, Speed, Guarana, M-150, Lipovitan, Bacchus, Volt, Bolt, Mr.

Big, Boom, Raptor, Amp, Fusion, Hi-Tiger, Eastroc Super Drink, Carabao, Power Horse, XL, Crazy Tiger, Effect, Missile, Nocco, Adrenaline Rush, Real Gold, War Horse, BLU, and a host of other international brands.

Our Reign Total Body Fuel® and Reign Inferno® Thermogenic Fuel high performance energy drinks compete with VPX Bang, Adrenaline Shoc, C4, CELSIUS, NOCCO, Rockstar XDURANCE and Quake in the performance energy category.

Our Java Monster® and Espresso Monster® product lines compete directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus Coffee, Starbucks Tripleshot and other Starbucks coffee drinks, Costa Coffee, Rockstar Roasted, Dunkin Donuts, Gold Peak, Stok, High Brew, McCafé, hi*ball, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee, Nescafe and International Delight.

Our Reign Total Body Fuel® and Reign Inferno® Thermogenic Fuel high performance energy drinks compete with VPX Bang, Adrenaline Shoc, C4, CELSIUS, NOCCO, Rockstar XDURANCE in the performance energy category.

Our Muscle Monster® product line competes directly with Muscle Milk, Core Power, Premier Protein, Kellogg’s Special K Protein, Bolthouse Farms Protein, EAS AdvantEDGE, EAS Myoplex and Gatorade G Series 03 Recover.

Our Monster Hydro® Energy Water, Monster HydroSport Super Fuel® and Monster Hydro® Super Sport product lines compete directly with Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, Lucozade, Powerade, Gatorade Bolt 24 and BODYARMOR.

Our True North® Pure Energy Seltzer product line competes directly with Celsius and Alani Nu.

Sales and Marketing

8 unchanged sentences

Where appropriate, we partner with our bottlers/distributors and/or retailers to assist our marketing efforts.

We decreased expenditures for our sales and marketing programs by approximately 9.7% in 2020 compared to 2019.

This decrease was primarily due to decreased expenditures for sponsorship and endorsements and decreased expenditures for travel and entertainment, each largely as a consequence of the COVID-19 pandemic.

The costs for certain postponed or rescheduled events have been, or may be, deferred to future periods.

Due to the uncertainty surrounding the

COVID-19 pandemic, we are unable to estimate in which future periods, if any, such deferred sponsorship and endorsement costs will be recognized.

We increased expenditures for our sales and marketing programs by approximately 21.0% in the twelve-months ended December 31, 2021 compared to the twelve-months ended December 31, 2020.

This increase was primarily due to increased expenditures for sponsorship and endorsements as well as social and digital marketing.

During the comparative twelve-months ended December 31, 2020, we decreased expenditures for sponsorship and endorsements and decreased expenditures for travel and entertainment, each largely as a consequence of the COVID-19 pandemic.

The impact of the COVID-19 pandemic was less pronounced on our sales and marketing programs in the twelve-months ended December 31, 2021.

We increased expenditures for our sales and marketing programs by approximately 9.2% in the twelve-months ended December 31, 2021 compared to the twelve-months ended December 31, 2019 (pre COVID-19).

Our customers are primarily full service beverage bottlers/distributors, retail grocery, drug and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, value stores, e-commerce retailers and the military.

9 unchanged sentences

Our customers include Coca-Cola Canada Bottling Limited, Coca-Cola Consolidated, Inc., Coca-Cola Bottling Company United, Inc., Reyes Coca-Cola Bottling, LLC, Great Lakes Coca-Cola Distribution, LLC, Coca-Cola Southwest Beverages LLC, The Coca-Cola Bottling Company of Northern New England, Inc., Swire Pacific Holdings, Inc.

(USA), Liberty Coca-Cola Beverages, LLC, Coca-Cola European Partners, Coca-Cola Hellenic, Coca-Cola FEMSA, Coca-Cola Amatil, Swire Coca-Cola (China), COFCO Coca-Cola, Coca-Cola Beverages Africa, Coca-Cola İçecek and certain other TCCC network bottlers, Asahi Soft Drinks, Co., Ltd., Wal-Mart, Inc.

(USA), Liberty Coca-Cola Beverages, LLC, Coca-Cola Europacific Partners (formerly Coca-Cola European Partners and Coca-Cola Amatil), Coca-Cola Hellenic, Coca-Cola FEMSA, Swire Coca-Cola (China), COFCO Coca-Cola, Coca-Cola Beverages Africa, Coca-Cola İçecek and certain other TCCC network bottlers, Asahi Soft Drinks, Co., Ltd., Wal-Mart, Inc.

(including Sam’s Club), Costco Wholesale Corporation and Amazon.com, Inc.

A decision by any large customer to decrease amounts purchased from us or to cease carrying our products could have a material negative effect on our financial condition and consolidated results of operations.

A decision by any large customer to decrease amounts purchased from us or to cease carrying our products could have a material adverse effect on our financial condition and consolidated results of operations.

Coca-Cola Consolidated, Inc.

1 unchanged sentence

Reyes Coca-Cola Bottling, LLC accounted for approximately 10%, 11% and 11% of our net sales for the years ended December 31, 2021, 2020 and 2019, respectively.

Coca-Cola European Partners accounted for approximately 10% of our net sales for the years ended December 31, 2020, 2019 and 2018.

Coca-Cola Europacific Partners accounted for approximately 12%, 10% and 10% of our net sales for the years ended December 31, 2021, 2020 and 2019.

Sales of ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes.

2 unchanged sentences

Quarterly fluctuations may also be affected by other factors including the introduction of new products, the opening of new markets, particularly internationally, where temperature fluctuations may be more pronounced, the addition of new bottlers and distributors, changes in the mix of the sales of our finished products and increased or decreased advertising and promotional expenses.

However, the COVID-19 pandemic may have an impact on consumer behaviors that may result in temporary changes in the seasonal fluctuations of our business.

Intellectual Property

1 unchanged sentence

We regard our trademarks, service marks, copyrights, domain names, trade dress and other intellectual property as very important to our business.

We consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Monster Super Fuel®, Espresso Monster®, Monster MAXX®, Reign Total Body Fuel®, Reign Inferno®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Fury®, Live+® and BPM® to be our core trademarks.

We consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Monster Super Fuel®, Espresso Monster®, Monster Energy® Nitro, Reign Total Body Fuel®, Reign Inferno®, True North®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Fury®, Live+® and BPM® to be our core trademarks.

We also own the intellectual property of our most important flavors for certain of our Monster Energy® Brand energy drinks in perpetuity.

We have registered Monster®, Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, M Hydro®, Espresso Monster®, Monster MAXX®, BU®, Nalu®, Burn®, Mother®, Play®, Power Play® (stylized), Relentless®, Ultra Energy®, BPM®, Predator®, Fury®, Live+®, Reign®, Reign Total Body Fuel® and Reign Inferno® outside of the United States in certain jurisdictions.

We have registered Monster®, Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Espresso Monster®, True North®, BU®, Nalu®, Burn®, Mother®, Play®, Power Play® (stylized), Relentless®, Ultra Energy®, BPM®, Predator®, Fury®, Live+®, Reign®, Reign Total Body Fuel® and Reign Inferno® outside of the United States in certain jurisdictions.

We protect our trademarks by applying for registrations and registering our trademarks with the United States Patent and Trademark Office and with government agencies in other countries around the world, particularly where our products are distributed and sold.

11 unchanged sentences

various environmental statutes;

the Safe Drinking Water and Toxic Enforcement Act of 1986 (“California Proposition 65”) and a number of other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, marketing, labeling and ingredients of such products.

the Safe Drinking Water and Toxic Enforcement Act of 1986 (“California Proposition 65”);

various state and federal laws and regulations pertaining to the sale and distribution of alcoholic beverages;

data privacy and personal data protection laws and regulations, including the California Consumer Privacy Act of 2018 (as modified by the California Privacy Rights Act) and a number of other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, marketing, labeling and ingredients of such products.

Outside the United States, the production, distribution and sale of many of our products are also subject to numerous statutes and regulations.

We also may in the future be affected by other existing, proposed and potential future regulations or regulatory actions, including those described below, any of which could adversely affect our business, financial condition and results of operations.

See “Part I, Item 1A – Risk Factors – Changes in government regulation, or failure to comply with existing regulations, could adversely affect our business, financial condition and results of operations” and “Significant changes to or failure to comply with various environmental laws may expose us to liability and/or cause certain of our facilities to close, relocate or operate at reduced production levels, which could adversely affect our business, financial condition and results of operations” below for additional information.

Furthermore, legislation may be introduced in the United States and other countries at the federal, state, municipal and supranational level in respect of each of the subject areas discussed below.

Public health officials and health advocates are increasingly focused on the public health consequences associated with obesity, especially as it affects children, and are seeking legislative change to reduce the consumption of sweetened beverages.

There also has been an increased focus on caffeine content in beverages, as discussed below, and we are seeing some attention to other ingredients in energy drinks.

There also has been an increased focus on caffeine content in beverages and we are seeing some attention to other ingredients in energy drinks.

Product Formulation, Labeling and Advertising.

Globally, we are subject to a number of regulations applicable to the formulation, labeling and advertising of our products.

Globally, we are subject to a number of regulations applicable to the formulation, labeling and advertising (including promotional campaigns) of our products.

In California, we are subject to California Proposition 65, a law which requires that a specified warning be provided before exposing California consumers to any product that contains in excess of threshold amounts of a substance listed by California as having been found to cause cancer or reproductive toxicity.

3 unchanged sentences

Food and Drug Administration (the “FDA”) revised regulations with respect to serving size information and nutrition labeling on food and beverage products, including a new requirement to disclose the amount of added sugars in such products.

These changes went into effect on January 1, 2020, though FDA announced that it is not focusing on enforcement due to challenges in meeting these requirements, particularly during the COVID-19 pandemic.

These changes went into effect on January 1, 2020.

Further, in December 2018, the U.S.

Department of Agriculture promulgated regulations requiring that, by January 1, 2022, the labels of certain bioengineered foods include a disclosure that the food is bioengineered.

We may incur significant costs to alter our existing packaging materials to comply with these and other new regulations.

Additionally, these new regulations may impact, reduce and/or otherwise affect the purchase and consumption of our products by consumers.

Further, the City of San Francisco enacted an ordinance that would require health warnings on advertisements for certain sugar-sweetened beverages, though enforcement has been delayed due to a lawsuit challenging the ordinance.

In January 2019, the U.S.

Court of Appeals for the Ninth Circuit, sitting en banc, granted a preliminary injunction blocking enforcement of the ordinance, concluding that a First Amendment challenge to the ordinance was likely to succeed on the merits.

In February 2020, the San Francisco Board of Supervisors passed legislation to amend the ordinance.

The plaintiff amended its pleading and litigation continues in the Northern District of California over this revised legislation.

In July 2012, we received a subpoena from the Attorney General for the State of New York in connection with an investigation relating to the advertising, marketing, promotion, ingredients, usage and sale of our Monster Energy® brand energy drinks.

We cannot predict the outcome of this inquiry and what effect, if any, it may have on our business, financial condition or results of operations.

Other countries, such as the member states of the Gulf Cooperation Council, Colombia, Brazil, the Dominican Republic and Mexico, and the People’s Republic of China are also considering, or have enacted, new labeling requirements, which may require us to amend our labels and warning statements.

Other countries, such as Argentina, Brazil, Colombia, the Dominican Republic, the member states of the Gulf Cooperation Council, Mexico, and the People’s Republic of China, are also considering, or have enacted, new labeling requirements, which may require us to amend our labels and warning statements.

The United Kingdom Government has also suggested that it may review food labeling laws following the United Kingdom’s departure from the European Union (“Brexit”).

2 unchanged sentences

states, counties, municipalities and/or in certain foreign countries.

For example, in the United States, bills seeking to impose an age restriction on the sale of energy drinks have been introduced

in the South Carolina and Connecticut legislatures.

For example, in the United States, bills seeking to impose an age restriction on the sale of energy drinks have been introduced in the Connecticut, Massachusetts, and South Carolina legislatures.

Outside of the United States, for example, Latvia, Lithuania and Turkey prohibit the sale of energy drinks to persons under the age of 18;

2 unchanged sentences

and Turkey prohibits the sale or advertising of energy drinks in “collective consumption areas,” such as sports complexes, schools or hospitals.

Latin American countries such as Chile, Colombia and Brazil are considering age and other sales restrictions on energy drinks, as are other countries such as the United Kingdom, Romania and Bulgaria.

In Mexico, the States of Tabasco and Oaxaca prohibit the sale of energy drinks to minors and the consumption in schools;

Colima prohibits the sale of energy drinks in private and public schools.

Other Latin American countries such as Chile, Colombia and Brazil have been considering age and other sales restrictions on energy drinks, as are other countries such as the United Kingdom, Spain, Romania and Bulgaria.

Excise Taxes on Energy Drinks.

20 unchanged sentences

In Europe, examples of caffeine restrictions include the Netherlands where there is a limit of 35mg/100ml, and Norway introduced, as of January 1, 2020 (subject to transition periods), a limit of 32mg/100ml.

Caffeine limit restrictions or restrictions on combining caffeine with other ingredients or in particular product sectors (such as performance beverages/sport drinks) have also been implemented or proposed in other jurisdictions, including Turkey, India, Pakistan’s Punjab region, Egypt and the member states of the Gulf Cooperation Council.

Caffeine limit restrictions or restrictions on combining caffeine with other ingredients or in particular product sectors (such as performance beverages/sport drinks) have also been implemented or proposed in other jurisdictions, including Turkey, India, Pakistan’s Punjab region, Egypt, Spain and the member states of the Gulf Cooperation Council.

Such restrictions could require reformulations of certain of our products.

2 unchanged sentences

We package our products in a variety of different package types and sizes including, for certain of our Monster Energy® brand energy drinks, aluminum cans larger than 16 fluid ounces.

Certain jurisdictions, such as Colombia, Costa Rica, Egypt and the Dominican Republic, are considering container size limitations on energy drinks and other beverages which may require us to change the size of our products sold in these countries.

Certain jurisdictions, such as Colombia, Costa Rica, Egypt, the Dominican Republic, and Spain, are considering container size limitations on energy drinks and other beverages which may require us to change the size of our products sold in these countries.

Other countries, like England, have considered and rejected proposed can size limitations although it is open to such markets to revisit these and other similar proposals.

Compliance with Environmental Laws

Our facilities in the United States are subject to federal, state and local environmental laws and regulations.

Our facilities and those of our co-packers in the United States are subject to federal, state and local environmental laws and regulations, including those relating to air emissions, the use of water resources and recycling.

Our operations in other countries are subject to similar federal, state, local and supranational laws and regulations that may be applicable in such countries.

Changes in environmental compliance mandates, and any expenditures necessary to comply with such requirements, could adversely affect our financial performance and future growth.

Compliance with these provisions has not had, nor do we expect such compliance to have, any material adverse effect upon our capital expenditures, net income or competitive position.

11 unchanged sentences

Of our 4,092 employees, we employ 1,256 in corporate and operational capacities (including administration, human resources, legal, information technology, operations, facilities, warehouse, product development, regulatory and accounting) and 2,836 persons in sales and marketing capacities.

As of December 31, 2021, approximately 48% of our U.S.

employees are from one or more underrepresented groups, including, but not limited to, Black, Latino, Asian, Pacific Islander, Native American and other Indigenous tribes and approximately 39% of our U.S.

employees are female.

In 2020, we established our Equality, Diversity and Inclusion (EDI) Leadership Advisory Group, comprised of leaders from across the Company, designed to provide insight on our diversity and inclusion efforts and to assist in the integration of the EDI program with our overall strategy and business objectives.

7 unchanged sentences

We also offer several voluntary benefits to full-time employees, including supplemental life insurance, whole life insurance, accident insurance, critical illness insurance, flexible spending accounts, travel insurance, pre-paid legal, healthy rewards programs, identity theft assistance, and retirement savings account(s).

COVID-19 Employee Health Measures and Support .

In response to the COVID-19 pandemic, we have implemented measures to ensure the health, safety, and well-being of our employees and have adapted such measures based on our close monitoring of the rapidly evolving situation.

We have implemented work-from-home policies for employees who are able to work remotely.

Where possible, we provide employees with equipment to facilitate home-based work.

For those employees unable to work remotely, we implemented safety precautions, such as on-site COVID-19 testing, which were developed and adopted in line with guidance from public health authorities and professional consultants.

We have also provided our employees with the following:

year-end bonuses for essential, hourly employees;

increased employee communications, including on topics such as mental health and family welfare;

weekly and bi-weekly communication from executive leadership;

wellness hotlines and enhanced employee assistance programs;

employee surveys to evaluate employee morale;

and resilience training programs to provide employees with the tools and resources to be resilient in the current climate, to stay healthy, and to engage in self-care.

Available Information

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business