SOMERS, N.Y. & PLANO, Texas -- The Pepsi Bottling Group Inc. (PBG) and Dr Pepper Snapple Group Inc. (DPS) announced that the companies have signed an agreement to make the Crush beverage portfolio available in the majority of PBG's territories throughout the United States.
"At PBG, we continue to look for ways to strengthen and diversify our product portfolio. This agreement is an important part of our strategy to do so, as it aligns our flavored offerings across the U.S. and Canada," said PBG North America president Rob King. "The addition of Crush greatly enhances our position in [image-nocss] the flavored-soft-drink category, as it's a terrific brand with broad consumer appeal and attractive growth prospects."
Jim Johnston, DPS' president of sales, said: "PBG already has a proven track record when it comes to building and enhancing Crush, having helped us grow the brand into one of the leading flavored soft drinks in Canada. With flavors playing an increasingly important role in the carbonated-soft-drink category, we're confident that together we can repeat that success in the U.S. and make Crush a popular national brand available to more consumers in more outlets. Simply put, it's a brand with tremendous untapped potential."
Under the terms of the agreement, PBG will have a perpetual license to manufacture, sell and distribute the brand, which includes such flavors as Orange Crush, Diet Orange Crush and Grape Crush, in about 80% of its territories throughout the United States. The agreement is effective immediately, and PBG will begin distribution in early 2009. Financial terms were not disclosed.
The Crush brand is currently available in less than 40% of the United States. The agreement with PBG will nearly double its market penetration, positioning the brand well for future growth.
Flavored carbonated soft drinks now account for almost half of all carbonated soft drink (CSD) sales in the United States, and Orange Crush and Diet Orange Crush compete in the fourth-largest segment of the flavor category. Orange and grape flavors represent a 5% share of the CSD market in the United States.
Crush has been a fixture in the CSD space for decades, with tremendous name recognition among consumers. Market research shows that three out of four Americans are aware of the brand.
The Pepsi Bottling Group Inc. is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages. Based in Somers, N.Y., PBG had annual sales of nearly $14 billion in 2007. The company operates 100 manufacturing facilities and more than 500 distribution centers. In the United States, PBG has the exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of 41 states and the District of Columbia.
Dr Pepper Snapple Group is an integrated refreshment beverage business marketing more than 50 beverage brands to consumers throughout North America. Based in Plano, Texas, DPS operates 24 bottling and manufacturing facilities and more than 200 distribution centers across the United States, Canada, Mexico and the Caribbean.
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