TRUCKING ENERGY DRINKS: A NEW GAME
If you’re interested in selling Monster or Rockstar, get ready to play a little distribution Twister in the next few months, as a set of deals engineered by Coca-Cola North America is about to completely change the cast of characters servicing your store.
Just before Beverage Spectrum went to press, Hansen Natural Corp. and Coke announced that they had agreed to a deal where the soda giant would take over distribution of Monster Energy in Western Europe, Canada, Mexico, and some U.S. states.
The deal came just two years after Hansen entered a distribution deal with another beverage giant, Anheuser-Busch, whose network handles a little more than half of the fast-growing energy brand’s wares. Most of the rest of the brand is run through a series of independents and, more importantly, a series of distributors owned by Dr Pepper Snapple Group. Those DPSU distributors, who revealed they will take a hit of close to $200 million in sales with the loss of Monster, are going to collect termination fees – likely paid by Coke via Hansen – but are still going to need a new energy drink on the trucks.
Meanwhile, the announcement came just two days after Rockstar, whose brand has been flagging a bit in recent years but remains the third-ranked independent behind Monster and Red Bull, announced the extension of its own three-year-old distribution agreement with Coke.
Rockstar retained the right to terminate the agreement as part of the deal – and it seems highly unlikely that Rockstar would want to share the stage, or the truck, with its longstanding archrival. At the same time, the Los Angeles-based Rockstar appeared to have a bit of time to find its own network, as Coke and Hansen are also faced with the challenge of figuring out how to accommodate A-B – which never truly reached a saturation point in terms of its Monster distribution and is still struggling to get it into on-premise accounts – while familiarizing its workforce with the whole Monster catalog.
There has been some speculation that PepsiCo – the only big company not yet mentioned here – might make a grab for Rockstar, as well, either with an equity piece or as a way of bolstering its own energy portfolio. The company has managed to revamp its AMP line without leaning heavily on an independent, but it still trails the other giants.
The deals sent the Coke staff into a tizzy; most of its regular communications staff skipped the NACS show to deal with ?the announcement, and there was a lot of adjustment of ?arrays at the last minute.
As an example, note this statement from Debbie Wetherhead, Coke’s spokesperson to the trade, made on Oct. 13 – day two of the NACS Expo: “If you were here yesterday, the display was a little different than it is today.”
Chances are, retailers will be able to echo that line in the next few months.
MORE INFO ON BOTTLED WATER
Bottled water in the U.S. could include more on-package documentation if a bill proposed by U.S. Senator Frank Lautenberg (D-NJ) becomes law.
The bill, called the “Bottled Water Safety and Right-to-Know Act,” would require bottled water companies to display – on each bottle – where the water came from, how it was treated, and the quantity of contaminants in the bottle.
Tom Lauria, a spokesman for the International Bottled Water Association, said most bottled water companies already address these issues. They print the source of the water on the label, he said, along with an 800 number to call for more information – but adding much more information to the bottle may be asking too much.
“You’re trying to telegraph to the consumer what they need to know, quickly,” he said.
Lautenberg – whose office did not return a call for comment – introduced the bill at a hearing in the Environment and Public Works. Lauria described the hearing as calm and “sparsely attended.” He expects more hearings on the subject, including appearances from the FDA and EPA, and said the IBWA may ultimately back the measure – but they will reserve judgment until a final version of the bill is prepared.
BPA DEBATE BACK
The debate over bisphenol-A, or BPA, resurfaced after British researchers revealed a study on the potential effects of the chemical on 1,455 U.S. adults.
The study found that people with the highest concentrations of the chemical (used in baby bottles and beverage can linings) in their urine suffered a higher rate of heart disease, diabetes and liver-enzyme abnormalities, Reuters reported.
In April, Canada banned the substance from use in baby bottles. The U.S. Food and Drug Administration issued a draft conclusion in August that current exposure to the chemical fell within safe levels. The administration said it would review the new study, but still believed exposure levels to be safe.