ATLANTA & CAMDEN, N.J. -- Campbell Soup Co., Coca-Cola North America (CCNA) and Coca-Cola Enterprises Inc. (CCE) have entered into an agreement for distribution of Campbell's single-serve beverage portfolio.
Under the terms of the agreement, CCNA will have the master distribution rights for Campbell's single-serve refrigerated immediate consumption beverages (24-oz. or less PET plastic), including V8 100% vegetable juices, V8 V-Fusion juices, V8 Splash juice drinks and Campbell's tomato juice in the United States and a similar variety of products [image-nocss] in Canada.
The agreement is effective immediately, and CCE and potentially other Coca-Cola bottlers will begin distributing the beverages on Sept. 10, 2007. Financial terms were not disclosed.
The agreement will strengthen Coke/CCE's portfolio in the noncarb/health-wellness arena and follows Coke's acquisitions of Fuze and Glaceau, Morgan Stanley analyst Bill Pecoriello said in a research note. Strengthening Coke/CCE's [North American] exposure to faster growing health/wellness noncarb brands is critical as the CSD segment continues under pressure.
He added, This addition, along with Fuze and Glaceau, should bolster Coke/CCE's [North American] top-line growth. Coke (and Pepsi's) juice drinks have been under pressure as lemonade-type flavors viewed as less healthy by consumers have been in decline. Access to the V8 vegetable juices, Fusion line and V8 Splash/Smoothies are more aligned with consumer trends.
Campbell products are a terrific addition to our portfolio, said Sandy Douglas, president of CCNA. This distribution agreement gives the Coca-Cola system some powerful brands that perfectly complement our own portfolio of fruit juices and juice drinks. This arrangement expands the [CCNA] and CCE relationship with Campbell that began with the launch of Godiva Belgian Blends last year.
Denise Morrison, president of Campbell USA, said, This is an ideal partnership for Campbell. The agreement supports two of our key business strategies: expanding our icon brands such as V8, and making our products more broadly available in new and existing markets.
She added, Through this agreement, consumers will have greater access to the healthful Campbell beverages they are increasingly demanding through the many retail outlets served by Coca-Cola's leading beverage distribution system. We believe this agreement represents a significant growth opportunity for our single-serve refrigerated immediate consumption beverages, which currently comprise approximately 15% of our total beverage sales.
Terry Marks, president of the North American business unit of Coca-Cola Enterprises, said, This agreement demonstrates that, in partnership with [CCNA], we have significantly strengthened our product portfolio to offer customers and consumers more options in the growing immediate consumption still beverage category.
Campbell will continue to distribute all soup and grocery products, along with its multi-serve and single-serve can beverage products, through its current broker and wholesaler distribution network, the company said. This deal affects only the Campbell's/V8 single-serve PET beverage portfolio.
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