What the changes say
- Monster Beverage added specific risks covering artificial intelligence adoption, SAP ERP system upgrades, and alcohol litigation.
- The company expanded consumer preference disclosures to include ultra-processed foods and low-calorie sweeteners.
- Production facility footprint was updated to reflect changes in manufacturing locations.
What changed since the prior 10-K
New
- NewOperational and Industry Risks
disputes between our bottler/distributors and their customers or buying groups may result in the delisting of certain of the Company’s products, temporarily or otherwise. Bottler/distributor consolidation may also have an adverse impact on our business
Disputes, consolidation, or poor performance by primary bottlers and distributors like The TCCC North American Bottlers and Coca-Cola FEMSA could reduce product sales.
- NewOperational and Industry Risks
Criticism or negative perceptions of our products (regardless of accuracy) generally could adversely affect us
Negative publicity regarding caffeine or energy drink health effects, regardless of scientific validity, could hurt market growth and product sales.
- NewOperational and Industry Risks
are a member, and/or any international beverage associations, it could negatively affect our overall reputation, which in turn could have a negative impact on our business, financial condition and results of operations
Societal and political scrutiny of the alcohol industry, including advocacy for higher taxes or stricter labeling, could decrease demand for alcohol products.
- NewOperational and Industry Risks
success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages that appeal to consumers
Shifting consumer shopping habits toward mobile apps and e-commerce, alongside fast-changing preferences, could reduce future beverage sales.
- NewOperational and Industry Risks
Our use of artificial intelligence technologies in our operations may expose us to risks
Inaccurate AI outputs, data failures, or integration errors could cause operational disruptions and security incidents.
- NewOperational and Industry Risks
Changes in the regulation of artificial intelligence could result in enforcement actions, fines, or other adverse consequences
New or differing global regulations on artificial intelligence could increase compliance costs and restrict technology usage.
- NewOperational and Industry Risks
our product labels are false or misleading or noncompliant with local law, or that our products are in any way unsafe, and we vigorously defend such lawsuits
The acquisition of Monster Brewing Company exposes the company to class actions regarding alcohol marketing, underage targeting, and excessive consumption.
- NewOperational and Industry Risks
Although we maintain cybersecurity insurance coverage that may, subject to the relevant policy’s terms and conditions, cover certain aspects of a breach or disruption, such insurance coverage may be insufficient to cover all losses that might arise from a cybersecurity incident or interruption
Upgrading the enterprise resource planning system to SAP S4 HANA with a January 1, 2028 go-live date risks operational disruption if delayed or failed.
- NewFinancial Risks
Our investments are subject to risks which may cause losses and affect the liquidity of such investments
The company holds $2.09 billion in cash, $677.1 million in short-term investments, and $487.3 million in long-term investments subject to credit, market, and interest rate risks.
Dropped
- DroppedOperational and Industry Risks
Criticism of our beverages or a negative perception of our products generally could adversely affect us
Reworded
- 64% rewrittenOperational and Industry Risks
Litigation regarding our products and practices, and related unfavorable media attention, could expose us to significant liabilities and reduce demand for our products, thus negatively affecting our financial results
Expanded legal proceedings to include mediation, arbitration, and administrative proceedings regarding products and advertising.
- 62% rewrittenOperational and Industry Risks
Changes in consumer product and shopping preferences may reduce demand for our products
Added concerns regarding ultra-processed foods, synthetic colors, and low- and no-calorie sweeteners to consumer preference risks.
- 53% rewrittenOperational and Industry Risks
Many of our bottlers/distributors are affiliated with and manufacture and/or distribute other carbonated, non-carbonated, non-alcohol, alcohol and other beverage products. In many cases, such products compete directly with our products
No substantive textual changes made to distributor and retailer risk disclosures.
- 41% rewrittenFinancial Risks
Uncertainty in the financial markets and other adverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affect our industry, business and results of operations
Refined phrasing regarding economic improvements and uncertainties in international markets.
- 38% rewrittenOperational and Industry Risks
If we fail to comply with data privacy and personal data protection laws and emerging cybersecurity laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which may negatively impact our business and operating results
Included partners and cybersecurity legislation alongside existing personal data protection regulations.
Was: If we fail to comply with data privacy and personal data protection laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which may negatively impact our business and operating results
- 36% rewrittenOperational and Industry Risks
Cybersecurity incidents, business interruptions and compliance issues experienced by third parties could materially and adversely affect our financial condition, results of operation and cash flows
Updated third-party risk language to explicitly reference shared operational systems and cybersecurity incidents.
Was: Cybersecurity attacks, business interruptions and compliance issues experienced by third parties could materially and adversely affect our financial condition, results of operation and cash flows
- 33% rewrittenOperational and Industry Risks
Our use of information technology exposes us to the risk of cybersecurity incidents and other costs and interruptions that could disrupt our business operations and adversely impact our reputation and results of operations
Replaced references to cybersecurity attacks with broader cybersecurity incidents.
Was: Our use of information technology exposes us to cybersecurity attacks and other interruptions that could disrupt our business operations and adversely impact our reputation and results of operations
- 30% rewrittenOperational and Industry Risks
We rely on limited Company-owned facilities for production of certain of our non-alcohol and alcohol beverages, and developments negatively affecting production at such facilities could materially impact the financial results of our business
Removed Salt Lake City, Utah from Monster Brewing Company manufacturing facilities and updated Norwalk, California facility status.
- 30% rewrittenOperational and Industry Risks
Our continued expansion outside of the United States exposes us to uncertain conditions and other risks in international markets
- 30% rewrittenOperational and Industry Risks
If we are not able to pass on increases in the costs of raw materials, including aluminum cans, ingredients, fuel, costs of co-packing, and/or tariffs, we may face a higher cost base, and our business and results of operations could be adversely affected
- 30% rewrittenFinancial Risks
We may be required to record a charge to earnings if our goodwill or intangible assets become impaired
- 29% rewrittenOperational and Industry Risks
Increased competition in the beverage industry and changing retail landscape could hurt our business
- 28% rewrittenFinancial Risks
At any given time, events may occur which change our expectation about how any such tax audits will be resolved, and thus, there could be significant variability in our quarterly and/or annual tax rates, because these events may change our plans for uncertain tax positions
- 26% rewrittenOperational and Industry Risks
Changes in government regulation, or a failure to comply with existing regulations, including those related to energy drinks, data protection and advertising, could adversely affect our business, financial condition and results of operations
- 25% rewrittenFinancial Risks
Fluctuations in foreign currency exchange rates may adversely affect our operating results
- 24% rewrittenOperational and Industry Risks
If we encounter material product recalls, our business may suffer material losses and such recalls could damage our brand image and corporate reputation, also resulting in material losses
- 20% rewrittenOperational and Industry Risks
A decision by any large customer to decrease the amount purchased from us or to cease carrying our products could have a material adverse effect on our financial condition and consolidated results of operations
All 47 risk factors
Headings as the filing states them, in filing order.
Operational and Industry Risks
- 01The Company and TCCC have extensive commercial arrangements and, as a result, the Company’s future performance is substantially dependent on the success of its relationship with TCCC
- 02Provisions in our organizational documents and control by insiders or TCCC may prevent changes in control even if such changes would be beneficial to other stockholders
- 03We primarily rely on bottlers and other contract packers to manufacture our products. If we are unable to maintain good relationships with our bottlers and contract packers and/or their ability to manufacture our products becomes constrained or unavailable to us, our business could suffer
- 04We rely on limited Company-owned facilities for production of certain of our non-alcohol and alcohol beverages, and developments negatively affecting production at such facilities could materially impact the financial results of our business30% rewritten
- 05Many of our bottlers/distributors are affiliated with and manufacture and/or distribute other carbonated, non-carbonated, non-alcohol, alcohol and other beverage products. In many cases, such products compete directly with our products53% rewritten
- 06disputes between our bottler/distributors and their customers or buying groups may result in the delisting of certain of the Company’s products, temporarily or otherwise. Bottler/distributor consolidation may also have an adverse impact on our businessNew
- 07A decision by any large customer to decrease the amount purchased from us or to cease carrying our products could have a material adverse effect on our financial condition and consolidated results of operations20% rewritten
- 08Our focus is in the energy drink category, and our business is vulnerable to adverse changes impacting the energy drink category and business, which could adversely impact our business and the trading price of our common stock
- 09Criticism or negative perceptions of our products (regardless of accuracy) generally could adversely affect usNew
- 10are a member, and/or any international beverage associations, it could negatively affect our overall reputation, which in turn could have a negative impact on our business, financial condition and results of operationsNew
- 11Increased competition in the beverage industry and changing retail landscape could hurt our business29% rewritten
- 12Our inability to implement our growth strategy, including expanding our business in existing and new sectors, or to successfully recognize the anticipated benefits of acquired businesses or assets could adversely affect our business and financial results
- 13Changes in consumer product and shopping preferences may reduce demand for our products62% rewritten
- 14success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages that appeal to consumersNew
- 15Our continued expansion outside of the United States exposes us to uncertain conditions and other risks in international markets30% rewritten
- 16If we are not able to pass on increases in the costs of raw materials, including aluminum cans, ingredients, fuel, costs of co-packing, and/or tariffs, we may face a higher cost base, and our business and results of operations could be adversely affected30% rewritten
- 17Our failure to accurately estimate demand for our products or maintain sufficient inventory levels or anticipate shortages of raw materials could adversely affect our business and financial results
- 18Our business is subject to seasonality, which may cause fluctuations in our operating results
- 19The costs of packaging supplies, raw material inputs, ocean and domestic freight, tariffs, and inflation generally may adversely affect our results of operations
- 20Global or regional catastrophic events could impact our operations and affect our ability to grow our business
- 21Failure to meet evolving corporate governance expectations or standards, including those related to sustainability matters, could expose us to increased costs, reputational harm, or other adverse consequences
- 22Our use of artificial intelligence technologies in our operations may expose us to risksNew
- 23Climate change and natural disasters may negatively affect our business
- 24If we are not able to retain the services of our workforce, there may be an adverse effect on our operations and/or our operating performance until we find suitable replacements
- 25Negative publicity (whether or not warranted) could damage our brand image and corporate reputation and may cause our business to suffer
- 26Changes in government regulation, or a failure to comply with existing regulations, including those related to energy drinks, data protection and advertising, could adversely affect our business, financial condition and results of operations26% rewritten
- 27Outside the United States, the production, distribution and sale of many of our products are also subject to numerous statutes and regulations
- 28Regulations concerning our alcohol beverages may adversely affect our business, financial condition or results of operations and inhibit the sales of such products
- 29Changes in the regulation of artificial intelligence could result in enforcement actions, fines, or other adverse consequencesNew
- 30We cannot predict the effect of inquiries from and/or actions by litigants, attorneys general, and/or other (quasi-) government agencies into the production, advertising, marketing, promotion, labeling, ingredients, usage and/or sale of our products
- 31Litigation regarding our products and practices, and related unfavorable media attention, could expose us to significant liabilities and reduce demand for our products, thus negatively affecting our financial results64% rewritten
- 32our product labels are false or misleading or noncompliant with local law, or that our products are in any way unsafe, and we vigorously defend such lawsuitsNew
- 33If we encounter material product recalls, our business may suffer material losses and such recalls could damage our brand image and corporate reputation, also resulting in material losses24% rewritten
- 34Our intellectual property rights are critical to our success, and the loss of such rights could materially adversely affect our business
- 35Our use of information technology exposes us to the risk of cybersecurity incidents and other costs and interruptions that could disrupt our business operations and adversely impact our reputation and results of operations33% rewritten
- 36Although we maintain cybersecurity insurance coverage that may, subject to the relevant policy’s terms and conditions, cover certain aspects of a breach or disruption, such insurance coverage may be insufficient to cover all losses that might arise from a cybersecurity incident or interruptionNew
- 37Cybersecurity incidents, business interruptions and compliance issues experienced by third parties could materially and adversely affect our financial condition, results of operation and cash flows36% rewritten
- 38If we fail to comply with data privacy and personal data protection laws and emerging cybersecurity laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which may negatively impact our business and operating results38% rewritten
Financial Risks
- 39At any given time, events may occur which change our expectation about how any such tax audits will be resolved, and thus, there could be significant variability in our quarterly and/or annual tax rates, because these events may change our plans for uncertain tax positions28% rewritten
- 40We may be required to record a charge to earnings if our goodwill or intangible assets become impaired30% rewritten
- 41Fluctuations in foreign currency exchange rates may adversely affect our operating results25% rewritten
- 42Potential changes in accounting standards or practices and/or taxation may adversely affect our financial results
- 43If we fail to maintain effective disclosure controls and procedures and internal control over financial reporting on a consolidated basis, our stock price and investor confidence in the Company could be materially and adversely affected
- 44Uncertainty in the financial markets and other adverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affect our industry, business and results of operations41% rewritten
- 45Default by or failure of one or more of our counterparty financial institutions could cause us to incur significant losses
- 46Volatility of our stock price may restrict sale opportunities
- 47Our investments are subject to risks which may cause losses and affect the liquidity of such investmentsNew
Other Monster Beverage 10-Ks
- FY2024 10-K risk factors39 risks
Monster Beverage relies heavily on TCCC for distribution and on third-party contract packers for manufacturing most finished goods.
Filed Feb 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.