PDA

View Full Version : PepsiCo, PBG/PAS and DPS



fusion
12-10-2009, 11:31 PM
I'm surprised there wasn't a thread here on PepsiCo buying PBG & PAS. It's not a done deal yet, Pepsi refiled with the FTC on the deal last month. They expect to close the deal in Q1 2010.

Anyway.. Pepsi and Dr Pepper Snapple recently reached an agreement in regards to bottling and distribution of DPS brands by the future bottling arm of Pepsi. Pepsi will pay DPS $900 million for a 20 year contract with automatic 20 year renewals for the right to distribute Dr Pepper, Crush and Schweppes in the US in areas where they currently distribute those brands. However, they will not get the rights to Vernors, Hawaiian Punch, Squirt, or Sunkist. Those will transfer to DPS. In Canada, they will get Vernors and Sussex in addition to the other three brands, and in Mexico it's just Squirt and Canada Dry.

Dr Pepper Snapple Group Agrees to License Certain Brands to PepsiCo Following Acquisition of Its Largest Bottlers - Dec 08, 2009 (http://drpeppersnapple.mediaroom.com/index.php?s=43&item=125)

CitrusCola
12-11-2009, 07:29 AM
Thanks for posting this fusion. This sounds like a smart deal that will make more brands available to more customers. I hope it works out that way.

mofizz
12-11-2009, 11:12 AM
I'm not surprised by the DPS/PepsiCo agreement. I really think it would hurt DPS to not have Dr.Pepper on the Pepsi trucks in certain PAS/PBG markets currently handling it. It also would have changed the economics behind the deal significantly for both PepsiCo and the PBG/PAS shareholders. Smart move on both sides. DPS took their time and got a nice chunk of cash while PepsiCo will continue to make money and better deals with customers by having strong allied brands.

lordmadone
12-12-2009, 06:34 PM
The deal is pretty much finalized though with the pepsico merger of pbg/pas ...I was told late fourth quarter 2009 possibly 2010 first quarter.

pepsiguy383
12-21-2009, 10:22 PM
So does this mean that Dr. Pepper will be solely distributed by Pepsi in the US? In the area that I am in, coke distributes Dr Pepper, however our sister branch just to the south distributes Dr. Pepper (both branches are currently PAS affiliated), so is the CCE distributor going to lose the Dr Pepper to us? That would be HUGE for us... Also, does that mean Crush will be solely distributed by Pepsi as well? If so, what's going to happen to sunkist, and squirt for that matter? Are they just going to be taken over by the 7up distributors?

fusion
12-21-2009, 10:51 PM
The Dr Pepper, Crush, and Schweppes deals will only be for areas that already carry those products. Other existing franchise rights will remain in place.

Yes, PBG & PAS will be relinquishing rights to Sunkist and Squirt to DPS.

mofizz
12-22-2009, 11:17 AM
I still think DPSG got one hell of a deal. "Hey Pepsi you can keep the rights you had, just give us a billion dollars and the relinquish your rights to vernors, HP, sunkist, etc...and by the way the deal is only good for 20 years."

That said, Pepsi would have been crazy not to. Insane.

Ram0n C0keah0lic
12-22-2009, 12:13 PM
I hope that the purchase of PBG made by PepsiCo improves its operations here in Mexico... here where I live the Pepsi trucks are old and without maintenance, compared with Coke, the available sizes are few... and there's a lack of Pepsi advertising...

pepsiguy383
12-24-2009, 06:56 PM
Well that just plain sucks that we won't be getting Dr. Pepper from the other guys. And not to mention, losing Sunkist, which is a HUGE seller up here, and Squirt, which has its moments. Looks like the ol' commission check will be dropping some more :mad:

fusion
12-24-2009, 09:28 PM
With enough work and effort, you can get your Crush numbers pretty high, probably as high as your Sunkist ones with the right distribution and pricing. Just having it in your lineup and part of your ad activity will help. I remember when we went from A&W to Barq's. Barq's was a slow seller for the Canada Dry distributor in that area, but we increased the sales by putting it on displays, in our cooler sets, etc.

Squirt is a tough one, though. Not much else out there like it, except maybe Fanta Grapefruit.

pepsiguy383
12-25-2009, 08:09 PM
Fusion,
Will all of Pepsico get Crush? Or is it just the same areas that currently distribute it??

fusion
12-25-2009, 10:47 PM
With Crush, my guess (and that's it, a guess) is that if Pepsi has Sunkist, they'll just swap it for Crush. I can't say for certainty, the article wasn't clear about that.

CitrusCola
12-26-2009, 01:29 PM
If I understood it correctly, Pepsico would have distribution rights to Crush everywhere and DPSG would have distribution rights for Sunkist everywhere.

fusion
12-26-2009, 10:15 PM
But only in areas where PepsiCo would be the bottler. Independents like Minges, McPherson, etc would keep Sunkist, Squirt, and so on. The deal only affects territory that PBG and PAS currently control.

CitrusCola
12-27-2009, 11:47 AM
Ah, I see. That means that in the area where I live, Pepsi will be losing Squirt while still distributing Dr Pepper and Crush. I wonder if Carolina Beverages (Cheerwine) will pick up Squirt. They currently distribute the other DPSG products in the NC Piedmont.

Misticdude
01-03-2010, 02:43 PM
Fusion....Barq's isn't distributed by Coke up there? I thought Barq's was owned by Coke.

Citrus...Cheerwine in the piedmont had the rights to Squirt before Pepsi got it. It's just that Cheerwine had a hard time getting it in...at least that's what I was told by them and Pepsi.

CitrusCola
01-03-2010, 05:56 PM
That's interesting, Mistic.

I don't remember Squirt ever being available around here until it appeared on the shelves with the Pepsi products a few years back. I wonder if the Cheerwine folks are having some problems. The selection of DPSG products that they put on the shelves is pretty limited. They won't sell anything with cherry flavor (Cherry RC, Diet Rite Cherry Cola, etc.) because those products might hurt Cheerwine sales. They did offer Diet RC for a year or so, and then it vanished. The only Sunkist flavor they distribute around here is orange, and the only Diet Rite flavors are plain cola, tangerine, and white grape.

Also, I've noticed that the Cheerwine/DPSG products have not dropped to match any of the weekly sale prices of the Coke and Pepsi products recently. Their products seem to always be more expensive.

fusion
01-03-2010, 08:22 PM
Fusion....Barq's isn't distributed by Coke up there? I thought Barq's was owned by Coke.


I was referring to when I first started. We took over Barq's in 1998, I think.

Squirt wasn't available in Delaware until Pepsi Bottling Ventures bought out the family-owned bottler in Salisbury MD. Then they brought in Squirt, and dropped some other DPS brands which were already distributed by the Canada Dry distributor up here.

pepsiguy383
01-18-2010, 01:20 PM
This is a little off subject, but do PBG and Pepsico have call centers for smaller accounts such as restaurants and mom and pop stores? Or do they still do it old fashioned and sell off the truck? Here at PAS we have a call center based in Fargo. IMO I think it would be much more efficient if we were to sell straight off the truck in extremely rural areas (mainly what I cover). Just curious if that aspect would change once this merger completes.

greg
01-18-2010, 03:47 PM
This is a little off subject, but do PBG and Pepsico have call centers for smaller accounts such as restaurants and mom and pop stores? Or do they still do it old fashioned and sell off the truck? Here at PAS we have a call center based in Fargo. IMO I think it would be much more efficient if we were to sell straight off the truck in extremely rural areas (mainly what I cover). Just curious if that aspect would change once this merger completes.

I worked for PBG in Denver, Atlanta, and West Palm Beach....All had a "Tel Sell" operation. The client would call in their order and it would be delivered on the next day the truck was in that area.

Themaster73
01-18-2010, 03:52 PM
maybe there will be a Crush Throwback in the future