BOCA RATON, Fla.—PepsiCo is investing $550 million in the energy drink maker Celsius in exchange for convertible preferred stock, reports CNBC. The investment is part of a distribution agreement, which will allow Celsius to enter more independent retailers, including convenience stores.

"We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the U.S. convenience and gas channel where approximately 70% of energy drinks are sold,” said John Fieldly, Celsius president, chairman and CEO.

PepsiCo’s investment equals to a minority stake of about 8.5% in Celsius, and a PepsiCo director will sit on Celsius’ board. The energy drink took off during the pandemic, with U.S. revenue increasing 217% to $123.5 million during the first quarter of 2022, reports CNBC.

In early 2020, PepsiCo purchased energy drink maker Rockstar for $3.85 billion, aiming to revitalize its sales.

Energy drinks are among the fastest growing non-alcoholic beverages. According to NACS State of the Industry Report of 2021 Data, energy drinks grew their lead as the top packaged beverages subcategory (accounting for 26.8% of total category sales in 2021) with an average-store sales gain of 14.4% last year. Gross profit jumped 19.9%, and average gross margins improved to 41.85% from 40.63%.

Read how energy drinks and sports drinks are helping to boost sales of packaged beverages in convenience stores in “Beverage Boosters” in the August issue of NACS Magazine.