Around twenty McDonald’s Corporation (NYSE: MCD) restaurants will begin to sell Monster Beverage Corp. (NASDAQ: MNST) energy drinks, which could mean significant growth for the beverage company.
The speculation on Monster opening up to a new sales channel for its beverages began on Tuesday and rose Monster’s shares to its highest in eight months. The new incorporation, getting high-caffeine energy drinks into the fast-food industry, could mean as much as $1.5 billion dollars in revenue for Monster, according to to Evercore ISI analyst Robert Ottenstein, as Bloomberg reported. And this is only in the U.S., which counts today 14,350 in McDonald’s locations.
Monster shares jumped 5.2 percent to $139.61 meaning their biggest gain since February 27 after the energy drink maker reported strong overseas growth. The shares are now up 29 percent this year.
“We’re always gathering feedback from customers on the food and beverages they’d like to be served at McDonald’s, and this is another example,” Lisa McComb, a spokeswoman for the fast-food chain, said in an e-mail. Locations in Michigan, Ohio, Georgia, Florida and Illinois are testing the drinks, she said to Bloomberg.
McDonald’s has been struggling this year to turn around its U.S. business. It named Steve Easterbrook as its new chief executive officer (CEO) hoping he can bring back the young consumers who are now increasingly opting for fast-casual rivals. Some of the new proposal by the fast food company, along with Monster’s inclusion in the menu, are buttermilk chicken sandwich and all-day breakfast.
A busy year
Meanwhile, Monster has had a busy year first forging a pact with Coca-Cola and transferred all of its U.S. and Canada distribution line to the soda giant. Coca-Cola also agreed to swap some brands and buy a 17 percent stake in Monster for about $2.15 billion.
At McDonald’s, Monster’s beverages are typically sold as part of a value meal, with customers paying about $1.50 more to get the Monster drink, Ottenstein said to Bloomberg.