What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-02-28 · 191 added, 148 removed, 298 unchanged (53% of the section changed)

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● Java Monster®

● Muscle Monster®

● Espresso Monster®

● Punch Monster®

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● Monster Hydro ® Super Sport

● Monster HydroSport Super Fuel®

● Monster Super Fuel®

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● Reign Inferno® Thermogenic Fuel

● Reign Storm®

● True North®

● Full Throttle®

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● Relentless®

● True North®

We also develop, market, sell and distribute craft beers, hard seltzers and flavored malt beverages (“FMBs”) under a number of brands, including Jai Alai® IPA, Florida Man TM IPA, Dale’s Pale Ale®, Wild Basin TM Hard Seltzers, Dallas Blonde®, Deep Ellum TM IPA, Perrin Brewing Company TM Black Ale, Hop Rising® Double IPA, Wasatch® Apricot Hefeweizen, The Beast Unleashed TM and a host of other brands.

We also develop, market, sell and distribute still and sparkling waters under the Monster® Tour Water TM brand name.

Industry Overview

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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, 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”).

We have four 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, Monster ® Tour Water TM and True North® Pure Energy Seltzers, (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, (iii) Alcohol Brands segment (“Alcohol Brands”), which is primarily comprised of the various craft beers and hard seltzers purchased as part of our acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”) on February 17, 2022 as well as The Beast Unleashed TM FMBs and (iv) 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.

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Generally, the Monster Energy® Drinks segment generates higher per case net operating revenues, but lower per case gross profit margin percentages than the Strategic Brands segment.

The Company’s Alcohol Brands segment primarily generates operating revenues by selling kegged and ready-to-drink canned beers, hard seltzers and FMBs, primarily to beer distributors in the United States.

Generally, the Alcohol Brands segment will have lower gross profit margin percentages than the Monster Energy® Drinks segment.

For certain risks with respect to our energy drinks see “Part I, Item 1A – Risk Factors” below.

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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.

On February 17, 2022, we completed our acquisition of CANarchy, a craft beer and hard seltzer company, for $329.5 million in cash (net of cash acquired), after certain working capital adjustments (the “CANarchy Transaction”).

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

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

Our organizational structure for our existing energy beverage business remains unchanged.

CANarchy is functioning independently, retaining its own organizational structure and team.

2022 Product Introductions

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During 2022, 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

● Java Monster® Cold Brew Latte

● Java Monster® Cold Brew Sweet Black

● Juice Monster® Aussie Style Lemonade TM

● Live+® Watermelon

● Monster® (stylized) Reserve Orange Dreamsicle

● Monster Energy® Lewis Hamilton 44 Zero Sugar

● Monster Energy® Ultra Peachy Keen®

● Mother® Kiwi Sublime

● Mother® Lava Guava

● Nalu® Melon Splash

● Play® Fruit Punch

● Play® Peach

● Predator® Peach

● Predator® Red Apple

● Rehab® Monster® Watermelon

● Reign Total Body Fuel® Reignbow Sherbet

● Reign Total Body Fuel® Tropical Storm

● Relentless® Peach

● Relentless® Raspberry

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

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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® 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.

We offer the following espresso + energy drinks under the Espresso Monster® product line:

Espresso and Milk, Salted Caramel and Vanilla Espresso.

Monster Energy®, Monster Energy® Zero Sugar, Lo-Carb Monster Energy®, Monster Assault®, Monster® Mango Loco® , Juice Monster® Aussie Style Lemonade TM , Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® Papillon TM (Juiced Monster®

Monarch in certain countries) Juice Monster® Pipeline Punch®, Juice Monster® Ripper®, Monster Energy® Import, Monster Energy® Export, M3(stylized)®, Monster Mule®, Monster Cuba Libre®, Monster Energy Zero Ultra®, Monster Energy Ultra Black®, Monster Energy Ultra Blue®, Monster Energy Ultra Fiesta® Mango, Monster Energy® Ultra Golden Pineapple®, Monster Energy Ultra Paradise®, Monster Energy® Ultra Peachy Keen®, Monster Energy Ultra Red®, Monster Energy Ultra Rosa®, Monster Energy Ultra Strawberry Dreams®, 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® Lewis Hamilton 44 Zero Sugar, Monster Energy® Super Cola® (Japan), Monster® (stylized) Reserve Kiwi Strawberry, Monster® (stylized) Reserve Orange Dreamsicle, Monster® (stylized) Reserve Watermelon and Monster® (stylized) Reserve White Pineapple.

Java Monster ® Coffee + Energy Drinks – a line of non-carbonated dairy based coffee + energy drinks.

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 and Java Monster® Vanilla Light.

Java Monster® 300 French Vanilla, Java Monster® 300 Mocha, Java Monster® Cold Brew Latte, Java Monster® Cold Brew Sweet Black, Java Monster® Irish Blend®, Java Monster® Kona Blend, Java Monster® Loca Moca®, Java Monster® Mean Bean®, Java Monster® Salted Caramel and Java Monster® Vanilla Light.

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

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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.

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

Monster Hydro® Super Sport is a line of non-carbonated, lightly sweetened refreshment + energy drinks that features an enhanced electrolyte blend and BCAA’s.

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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:

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:

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

Cosmic Peach and Super Dry.

Monster® Tour Water TM – a line of deep well still and sparkling waters.

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.

We offer the following energy shakes under the Muscle Monster® Energy Shakes product line:

Chocolate and Vanilla.

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

Reign Total Body Fuel ® High Performance Energy Drinks – a line of high performance energy drinks with BCAA’s, B vitamins, electrolytes and CoQ10 with zero sugar.

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,Reignbow Sherbet, Sour Apple, Strawberry Sublime and White Gummy Bear.

Cherry Limeade, Lemon Hdz, Lilikoi Lychee, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry, Reignbow Sherbet, Strawberry Sublime, Tropical Storm 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.

We offer the following high performance energy drinks under the Reign Inferno® Thermogenic Fuel product line:

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

Red Dragon and Watermelon Warlord.

Reign Storm ® Total Wellness Energy Drinks – a line of better-for-you energy drinks with natural caffeine, Biotin, Zinc, B vitamins, Vitamin A and Vitamin C, with zero sugar.

We offer the following under the Reign Storm® Total Wellness Energy product line:

Valencia Orange, Kiwi Blend, Peach Nectarine, and Harvest Grape.

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.

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

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

Focus Berry Red, Mango and Sour Twist.

BU® – a line of carbonated energy drinks.

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

Island Punch and Original.

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

Burn® – a line of carbonated energy drinks.

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

Apple Kiwi, Blue, Cherry, Dark Energy, Lemon Ice, Mango, Original, Passion Punch, Peach, Zero Raspberry, Sour Twist and Zero.

Apple Kiwi, Blue, Dark Energy, Fruit Punch, Mango, Original, Passion Punch, Peach, Peach Mango, Pineapple, Royal, Sour Twist and Zero Raspberry.

Full Throttle® – a line of carbonated energy drinks.

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We offer the following energy drinks under the Live+® product line:

Ascend, Ignite and Persist.

Ascend, Ignite, Persist and Watermelon.

Mother® – a line of carbonated energy drinks.

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

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

Epic Swell, Frosty Berry, Kicked Apple ® , Kiwi Sublime, Lava Guava, 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,Hibiscus Rooibos, Original, Passion and Refresh.

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

NOS® – a line of carbonated energy drinks.

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

GT Grape, Nitro Mango, Original, Sonic Sour and Turbo.

GT Grape, Original and Sonic Sour.

Play® and Power Play ® (stylized) – a line of carbonated energy drinks.

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

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

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

Predator® – a line of affordable carbonated energy drinks.

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

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

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

Relentless® – a line of carbonated energy drinks.

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

Apple Kiwi, Cherry, Lemon Ice, Mango, Origin, Passion Punch, Sour Twist and Zero.

Apple Kiwi, Cherry, Origin, Passion Punch, Peach, and Raspberry.

Samurai® – a line of carbonated energy drinks.

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

Apple Kiwi, Fury, Mango, Original, Passion Punch, Peach Mango and Zero Raspberry.

Apple Kiwi, Original, Passion Punch, Peach Mango and Zero Raspberry.

Products – Alcohol Brands Segment

Cigar City TM – a line of craft beers.

We offer the following brands under the Cigar City TM brand family:

Jai Alai ® , Florida Man TM , and others.

Oskar Blues TM – a line of craft beers.

We offer the following brands under the Oskar Blues TM brand family:

Dale’s Pale Ale ® , Double Dale’s, Mama’s Little Yella Pils, and others.

Deep Ellum TM – a line of craft beers.

We offer the following brands under the Deep Ellum TM brand family:

Dallas Blonde ® , Deep Ellum TM IPA, and others.

Squatters® – a line of craft beers.

We offer the following brands under the Squatters® brand family:

Hop Rising® Double IPA, and others.

Wild Basin TM – a line of craft hard seltzers.

We offer the following flavors under the Wild Basin TM product line:

Lemon, Grapefruit, Peach, Berry Sorbet, Black Cherry, Strawberry and others.

Wasatch® – a line of craft beers.

We offer a number of brands under the Wasatch ® brand family including Apricot Hefeweizen and others.

Perrin – a line of craft beers.

We offer a number of brands under the Perrin brand family including Black Ale and others.

The Beast Unleashed TM – a line of FMBs.

We offer the following flavors under The Beast Unleashed TM brand family:

Mean Green, Peach Perfect, Scary Berries, and White Haze.

Products – Other Segment

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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.

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, kegs as well as polyethylene terephthalate (PET) plastic bottles.

Manufacture and Distribution

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

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 2022, we continued to outsource the manufacturing process for our finished goods energy drink products 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 non-alcohol 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.

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Depending on the beverage, the bottler/co-packer may also add carbonation to the products as part of the production process.

For our Alcohol Brands segment, we purchase cans, cartons, hops, malt, yeast, sugar, ethanol and other additives and flavorings and packaging materials from ingredient and raw material suppliers to be used in the brewing, fermentation, and packaging of alcohol beers and FMB products.

We are granted a right-of-use for any kegs used in production from a third-party supplier at a contracted rate per fill.

Most of our alcohol finished goods are manufactured at one of our seven owned or leased manufacturing facilities, but we have started and will increase production and packaging at co-packers as we require additional capacity.

Co-Packing Arrangements

All of our finished goods are manufactured by various third-party bottlers and co-packers situated throughout the United States and abroad, under separate arrangements with each party.

All of our non-alcohol and certain alcohol finished goods are manufactured by various third-party bottlers and co-packers situated throughout the United States and abroad, under separate arrangements with each party.

Our co-packaging arrangements vary in terms and do not generally obligate us to procure minimum quantities of products within specified periods.

However, from time to time, we may enter into manufacturing contracts with agreed upon minimum quantities to ensure continuity of supply of certain products in certain territories.

In some instances, subject to agreement, certain equipment may be purchased exclusively by us and/or jointly with our co-packers, and installed at their facilities to enable them to produce certain of our products.

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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.

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.

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

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, ethanol, 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”).

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Monster Energy ® Distribution Agreements

We have entered into agreements with various bottlers/distributors providing for the distribution of our products during initial terms of up to twenty years, which may be renewed thereafter for additional terms ranging from one to five years, subject to certain terms and conditions which may vary depending on the form of the agreement.

We have entered into agreements with various bottlers/distributors providing for the distribution of our Monster Energy® energy drinks during initial terms of up to twenty years, which may be renewed thereafter for additional terms ranging from one to five years, subject to certain terms and conditions, which may vary depending on the form of the agreement.

Such agreements remain in effect for their then-current term as long as our products are being distributed, but are subject to specified termination rights held by each party, which may include by way of example, and depending on the form of agreement, termination upon:

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We have entered into agreements with various TCCC network bottlers, both in the United States and internationally, providing for the distribution and sale of our Strategic Brands energy drinks.

Alcohol Brands Distribution Agreements

CANarchy has entered into agreements with various beer distributors, both in the United States and internationally, providing for the distribution of our alcohol products.

Such agreements have varying terms and durations.

CANarchy, along with Monster Brewing LLC, has also entered into distribution agreements with licensed beer distributors for the exclusive distribution of certain beverages in agreed upon territories.

Raw Materials and Suppliers

The principal raw materials used in the manufacturing of our products are aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, as well as flavors, juice concentrates, glucose, sugar, sucralose, milk, cream, protein, coffee, tea, supplement ingredients and other packaging materials, the costs of which are subject to fluctuations.

As a consequence of the COVID-19 pandemic, we have seen a shift in consumer channel preferences and package configurations, including an increase in at-home consumption and a decrease in food service on-premise consumption.

This shift has resulted in increased industry demand for aluminum cans, leading to aluminum cans being in short supply.

The principal raw materials used in the manufacturing of our products are aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, kegs, cartons as well as flavors, juice concentrates, glucose, sugar, sucralose, milk, cream, coffee, tea, hops, malt, yeast, ethanol, supplement ingredients and other packaging materials, the costs of which are subject to fluctuations.

AFF is the primary flavor supplier for our Monster Energy® brand energy drinks.

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For our Strategic Brands energy drinks, we purchase flavors, concentrates and/or beverage bases from flavor suppliers including TCCC in the United States and abroad, and may purchase certain other ingredients from independent suppliers located in the United States and abroad.

With regard to our Java Monster®, Espresso Monster® and Muscle Monster® product lines, the dairy, protein and retort co-packing industries are subject to shortages and increased demand from time to time, which may result in production disruption and/or higher prices.

For certain flavors purchased from third-party suppliers and used in a limited number of our Monster Energy® brand energy drinks and/or our Strategic Brands energy drinks, these third-party flavor suppliers own the proprietary rights to certain of their flavor formulas.

With regard to our Java Monster® product line, the dairy and retort co-packing industries are subject to shortages and increased demand from time to time, which may result in production disruption and/or higher prices.

For certain flavors purchased from third-party suppliers and used in certain of our Monster Energy® brand energy drinks, Strategic Brands energy drinks and/or our alcohol drinks, these third-party flavor suppliers own the proprietary rights to certain of their flavor formulas.

We do not have possession of the list of such flavor ingredients or formulas used in the production of certain of our products and certain of our blended concentrates, and we may be unable to obtain comparable flavors or concentrates from alternative suppliers on short notice.

Our third-party flavor suppliers generally do not make such flavors and/or blended concentrates available to other third-party customers.

We have entered into purchase agreements with key packaging and ingredient suppliers to maintain an adequate supply of such packaging and ingredients for the next one to four years based on current anticipated volume needs.

Changes to those volume needs could result in shortages or excess supply of these contracted varieties.

Many outside factors such as crop yield, weather, agricultural legislation, and the geopolitical climate could impact supply and price;

however, we do source certain ingredients from different regions and suppliers to mitigate some of this risk.

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

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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.

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Our products compete with a wide range of drinks produced by a relatively large number of companies, many of which have substantially greater financial, marketing and distribution resources than we do.

Important factors affecting our ability to compete successfully include brand and product image, taste and flavor of products, trade and consumer promotions, rapid and effective development of new and unique cutting edge products, ingredients, attractive and different packaging, brand exposure and marketing as well as pricing.

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 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, 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.

Important factors affecting our ability to compete successfully include brand and product image, taste and flavor of products, trade and consumer promotions, rapid and effective development of new and unique cutting-edge products, ingredients, production processes, attractive and different packaging, brand exposure and marketing as well as pricing.

We depend on our bottlers and full service beverage distributors to prioritize our products, provide stable and reliable distribution and secure adequate shelf space in retail outlets.

Competitive pressures in the “alternative,” energy, coffee, “functional,” and “beyond beer” (hard seltzers, FMBs, canned cocktails and other ready-to-drink beverages) 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, energy shot, beer and beyond beer categories.

For instance, a number of companies which 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, Prime, 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.

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(See “Government Regulation” below for additional information).

We compete not only for consumer preference, but also for maximum marketing, sales efforts and attention from our multi-brand licensed bottlers, brokers and distributors, many of which have a principal affiliation with competing companies and brands.

Our products compete with all liquid refreshments and in many cases with products of much larger and in some cases better financed competitors, including the products of numerous nationally and internationally known producers such as TCCC, PepsiCo, Inc.

We compete not only for consumer preference, but also for maximum marketing, sales efforts and attention from our multi-brand licensed bottlers and distributors, many of which have a principal affiliation with competing companies and brands.

as TCCC, PepsiCo, Inc.

(“PepsiCo”), Keurig Dr.

(“KDP”) and Red Bull GmbH.

From time to time, such larger competitors may enter into distribution agreements with certain other competitors.

We also compete with companies that are smaller or primarily local in operation.

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, 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.

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 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, Black Rifle and International Delight.

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.

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, CELSIUS, Eneryeti, GURU Organic Energy 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 HEAT, NOCCO, Rockstar XDURANCE, Ghost Energy, G Fuel, VPX Redline, Bucked Up Energy, and 3D in the performance energy category.

Our Java Monster® product line competes directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Tripleshot and other Starbucks coffee drinks, Costa Coffee, Dunkin Donuts, Stok, High Brew, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee, Nescafe, Black Rifle, International Delight, Rise Brewing Co.

and Black Stag.

Our Monster Hydro® Energy Water and Monster Hydro® Super Sport product lines compete directly with BODYARMOR, Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, Lucozade, Powerade, Gatorade, Gatorade Fast Twitch, Gatorade Bolt24 and Prime Hydration.

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

Our CANarchy family of products and The Beast Unleashed TM product line competes within the FMB, hard seltzer, and craft beer categories of the alcohol beverage industry.

Competition includes microbreweries, regional brewers, national craft brewers, and large international and domestic producers of beers, FMBs, and hard seltzers such as Molson Coors, Constellation Brands, AB InBev, The Boston Beer Company and The Mark Anthony Group among many others.

Sales and Marketing

Our sales and marketing strategy for all our beverages is to focus our efforts on developing brand awareness through image-enhancing programs and product sampling.

We use our branded vehicles and other promotional vehicles at events where we offer samples of our products to consumers.

Our sales and marketing strategy for all our non-alcohol beverages is to focus our efforts on developing brand awareness through image-enhancing programs and product sampling.

We support our non-alcohol brands with prize promotions, price promotions, competitions, endorsements from selected public and sports figures, sports personality endorsements, sampling and sponsorship of selected athletes, teams, series, bands, esports, causes and events.

We utilize “push-pull” methods to enhance shelf and display space exposure in sales outlets (including racks, coolers and barrel coolers), advertising, in-store promotions and in-store placement of point-of-sale materials to encourage demand from consumers for our products.

We also support our brands with prize promotions, price promotions, competitions, endorsements from selected public and sports figures, sports personality endorsements, sampling and sponsorship of selected athletes, teams, series, bands, esports, causes and events.

In-store posters, outdoor posters, social media, concerts, print, radio and television advertising (directly and through our sponsorships and endorsements) and coupons may also be used to promote our brands.

We use our branded vehicles and other promotional vehicles at events where we offer samples of our products to consumers.

These strategies and activities may apply to the CANarchy family of products or The Beast Unleashed TM where permitted by applicable laws.

We also manage taprooms and brewpubs adjacent to some of our manufacturing locations where we sell our alcohol products, merchandise, and food to consumers in a branded environment.

We believe that one of the keys to success in the beverage industry is differentiation, making our brands and products visually appealing and distinctive from other beverages on the shelves of retailers.

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We increased expenditures for our sales and marketing programs by approximately 11.4% in the twelve-months ended December 31, 2022 compared to the twelve-months ended December 31, 2021.

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.

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

Our alcohol customers are primarily beer distributors who in turn sell to retailers within the alcohol distribution system.

Percentages of our gross billings to our various customer types for the years ended December 31, 2022, 2021 and 2020 are reflected below.

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Retail grocery, direct convenience, specialty chains and wholesalers

Direct value stores and other

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 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.

Alcohol, direct value stores and other

Our non-alcohol customers include Coca-Cola Canada Bottling Limited, Coca-Cola Consolidated, Inc., Coca-Cola Bottling Company United, Inc., Reyes Coca-Cola Bottling, 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 Europacific Partners, 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 adverse effect on our financial condition and consolidated results of operations.

Our alcohol customers include J.J.

Taylor Distributing, Ben E.

Keith, Reyes Beer Division, Sheehan Family Companies, and Admiral Beverage.

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 results of operations.

Coca-Cola Consolidated, Inc.

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

We believe that the volume of sales in the beverage industry is affected by weather conditions.

The volume of sales in the beverage industry is affected by weather conditions.

However, the energy drink category appears to be less seasonal than traditional beverages.

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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 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 consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Iced Tea®, Unleash the Beast!®, Rehab® Monster®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Hydro Super Sport®, Monster Super Fuel®, Espresso Monster®, Monster Energy® Nitro, Reign Total Body Fuel®, Reign Inferno®, Reign Storm®, True North®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Fury®, Live+®, BPM®, Gladiator®, Samurai®, Oskar Blues Brewery®, Cigar City®, Deep Ellum Brewing Co®, Perrin Brewing Company®, Squatters®, Wasatch®, Jai Alai®, Dale’s Pale Ale®, Dallas Blonde®, Wild Basin TM , Dale’s®, Mama’s Little Yella Pils®, Hop Rising® and The Beast Unleashed TM 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®, 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 have registered Monster®, Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Rehab® Monster®, 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+®, Gladiator®, Samurai®, 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.

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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.

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

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.

See “Part I, Item 1A – Risk Factors – Changes in government regulation, or a failure to comply with existing regulations related to energy drinks, could adversely affect our business, financial condition and results of operations,” “Regulations concerning our alcohol beverages may adversely affect our business, financial condition or results of operations and inhibit the sales of such products,” and “Significant changes to or failure to comply with various environmental laws may expose us to liability and/or cause certain of our facilities and/or those of our co-packers 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 and regulation 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 and alcohol consumption, especially as they may affect children, and are seeking legislative change to reduce the consumption of sweetened and alcohol beverages.

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 (including promotional campaigns) of our products.

In some territories, such as the European Union, food additives including sweeteners such as sucralose are subject to a safety re-evaluation which could potentially lead to changes in the specification for such additives or removal from the approved list of additives.

Product Formulation, Labeling, Packaging, and Advertising.

Globally, we are subject to a number of regulations applicable to the formulation, labeling, packaging, 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.

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If we are required to add warning labels to any of our products or place warnings in certain locations where our products are sold, it will be difficult to predict whether, or to what extent, such a warning would have an adverse impact on sales of our products in those locations or elsewhere.

In addition, in May 2016, the U.S.

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.

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.

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

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.

In addition, there has been increasing regulatory activity globally regarding constituents in packaging materials, including perfluoroalkyl and polyfluoroalkyl substances (“PFAS”).

Regardless of whether perceived health consequences of these constituents are justified, such regulatory activity could result in additional government regulations that impact the packaging of our beverages.

In addition, the U.S.

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

Further, 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.

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

Other countries, such as Argentina, Brazil, Colombia, the member states of the Gulf Cooperation Council, Mexico, the People’s Republic of China, Peru and Uruguay 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”).

More generally, some markets, such as Tanzania, have specific energy drink standards that do not always allow for inclusion of certain ingredients, such as L-carnitine and ginseng, in our products.

Peru also recently challenged the use of L-carnitine in energy drinks.

Other markets may also restrict or prohibit the use of ginseng and certain other botanicals in food.

We may incur costs to address such country-specific requirements for or face restrictions on our products.

Age and Other Restrictions on Energy Drink Products.

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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;

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

Canada prohibits the promotion of energy drinks to children 12 years and under;

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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.

Other Latin American countries such as Chile and Brazil have been considering age and other sales restrictions on energy drinks, as are other countries such as the United Kingdom (other than Scotland) and Spain.

Poland has introduced a far-reaching bill that would, among other measures, ban the sale of energy drinks to persons under 18, ban advertising of energy drinks on television and radio between 6 am and 8 pm with very limited exceptions, ban online and billboard advertising for energy drinks, and effectively ban the sale or distribution of non-energy drink products carrying energy drink branding.

Similar rules would not apply to coffee products that contain similar or higher levels of caffeine.

Excise Taxes on Energy Drinks.

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Boulder, Colorado;

Philadelphia, Pennsylvania and Seattle, Washington) have passed similar measures, some of which have been challenged in litigation.

Philadelphia, Pennsylvania, Seattle, Washington, and Washington, DC) have passed similar measures, some of which have been challenged in litigation.

The imposition of such taxes on our products would increase the cost of certain of our products or, to the extent levied directly on consumers, make certain of our products less affordable.

Excise taxes on sweetened beverages already are in effect in certain foreign countries where we do business, such as France, the United Kingdom, Ireland, South Africa and Mexico.

Excise taxes on sweetened beverages already are in effect in certain foreign countries where we do business, such as France, the United Kingdom, Ireland, South Africa, Mexico and Colombia.

Poland recently established a tax on drinks with added sugars, specifically targeting beverages containing caffeine and taurine.

Other countries, including the Dominican Republic, are considering similar measures.

Other countries are considering similar measures.

In addition, legislation has been proposed in certain jurisdictions that would specifically impose excise taxes on energy drinks.

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For instance, on January 1, 2020, a reform to a Mexican excise tax went into effect that expanded the definition of an “energy drink” subject to this tax to include products with any amount of caffeine (the prior version of the tax required a threshold of 20 milligrams of caffeine per 100 millimeters for the tax to be applicable) and “taurine or glucuronolactone or thiamine and/or any other substance that produces similar stimulating effects.” Hungary has instituted an excise tax to which our products are subject.

Bahrain, Saudi Arabia and the United Arab Emirates began applying a selective tax of 100% on energy drinks in 2017, Qatar and Oman began applying the tax in 2019, and there are indications that a similar measure may be enacted in Kuwait.

Bahrain, Saudi Arabia and the United Arab Emirates began

applying a selective tax of 100% on energy drinks in 2017, Qatar and Oman began applying the tax in 2019, and there are indications that a similar measure may be enacted in Kuwait.

Limits on Caffeine Content.

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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, Spain 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, Colombia, Iraq, and the member states of the Gulf Cooperation Council.

Such restrictions could require reformulations of certain of our products.

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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, 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.

Certain jurisdictions, such as Colombia, Costa Rica, Egypt, the Dominican Republic, and Spain, have considered container size limitations on energy drinks and other beverages.

If adopted, such limitations may require us to change the container size of our products sold in certain 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 Alcohol-Related Regulation and Laws.

Our Alcohol Brands segment is regulated by federal, state and local governments in both the U.S.

and abroad whose laws and regulations govern the production, distribution and sale of alcohol beverages, including licensing, permitting, advertising and marketing.

To operate our breweries, manufacturing facilities and other alcohol-related facilities, as well as to sell our alcohol products, we must obtain and maintain numerous approvals, licenses and permits from governmental agencies, including, but not limited to, the U.S.

Department of Treasury, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), the U.S.

Department of Agriculture, the FDA, state alcohol regulatory agencies and state and federal environmental agencies.

Our breweries, in particular, are subject to audits and inspections by TTB and applicable state alcohol regulatory agencies at any time.

Our alcohol beverages are also subject to various taxes, license fees, and the like levied by governmental entities as well as bonds that such entities may deem necessary to ensure compliance with applicable laws and regulations.

One such tax that we must comply with is the federal excise taxes.

Beginning in January 2018, the federal excise taxes imposed on domestic brewers that produce less than 2 million barrels annually were reduced from $7.00 to $3.50 per barrel on the first 60,000 barrels shipped annually.

State and local excise taxes, on the other hand, vary based on the alcohol content and type of beverage.

Federal, state, or local governments may increase such excise taxes in the future.

Compliance with Environmental Laws.

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.

In addition, continuing concern over environmental matters, including climate change, is expected to continue to result in new or increased legal and regulatory requirements (in and outside of the United States), including to reduce or mitigate the potential effects of greenhouse gases, to limit or impose additional costs on commercial water use due to local water scarcity concerns, or to expand mandatory reporting of certain environmental, social and governance metrics.

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.

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The precise requirements imposed by these measures vary by jurisdiction.

Other deposit, recycling or product stewardship proposals have been, and may in the future be, introduced in certain U.S.

states, counties, municipalities and in certain foreign countries.

Other deposit, recycling, ecotaxes and/or product stewardship proposals have been, and may in the future be, introduced and enacted at the federal, state, and local levels, and in foreign countries.

In California, we are required to collect redemption values from our customers and to remit such redemption values to the State of California Department of Resources Recycling and Recovery based upon the number of cans and bottles of certain carbonated and non-carbonated products sold.

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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.

In 2021, we established three regional EDI Working Councils across the Americas, EMEA, and APAC regions.

We provide training for our employees covering harassment, discrimination and unconscious bias.

We support our employees through a variety of training and development programs.

We support our employees through a variety of training, mentorship and development programs.

We have a mid-level manager development program, in which participants learn leadership skills, network with peers and senior executives, and tackle critical initiatives.

We also have a leadership development platform in partnership with a third party, for senior leaders to receive university grade certificates in business strategy and innovation and complete Food and Beverage Executive courses, as well as an electronic learning platform that focuses on business acumen, professional development and technical capabilities.

In addition, we provide employees with access to an e-learning platform that offers courses focused on job and career training, business acumen, professional development and technical capabilities.

We provide compensation packages designed to attract and retain talent while maintaining alignment with market compensation surveys.

We have multiple short-term incentive programs focused on incentivizing and retaining talent throughout the organization and provide long-term incentive programs to employees through equity and/or performance cash awards.

We currently cover the cost of insurance premiums including medical, dental, vision, life, accidental death and dismemberment, short and long term disability, and an Employee Assistance Program (EAP) covering full-time employees and share in the cost of insurance premiums covering eligible dependents including medical, dental and vision coverage.

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.

We currently cover the cost of insurance premiums including medical (including virtual visits), dental, vision, life, accidental death and dismemberment and short and long term disability, covering full-time employees and share in the cost of insurance premiums covering eligible dependents including medical, dental and vision coverage.

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

We also offer an Employee Assistance Program (EAP) to all employees.

See Note 19, “Employee Benefit Plan” in the Notes to the Consolidated Financial Statements for a discussion of our 401(k) Plan.

Available Information

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What changed 10-K

Item 1. Business