UPDATE: The original version of this story has been updated to include a statement from Fran McGorry, co-owner of Liberty Coca-Cola Beverages.
The Coca-Cola Company’s fruitful partnership with one of New York’s powerhouse beverage distributors appears to be ending, as the soda giant confirmed it is pulling Honest Tea, Zico coconut water and Hubert’s Lemonade products from Big Geyser’s DSD network.
As initially reported today in Beverage Business Insights and confirmed by BevNET, Big Geyser will cease distribution of Hubert’s Lemonade at the end of October 2018, followed by Zico and Honest Tea at the end of November, when the brands’ respective contracts end. All three brands will transition to Liberty Coca-Cola Beverages, which signed an agreement to acquire distribution rights for Coke beverages in the New York Tri-State Metro area last October.
“With U.S. refranchising complete, and Coca-Cola continuing to expand its portfolio to become a total beverage company, it will be transitioning all distribution rights in the New York metro-area to Liberty Coca-Cola Beverages, a family-owned and locally-operated bottling partner,” wrote a Coca-Cola North America spokesperson in a statement emailed to BevNET. “We have deep appreciation and gratitude for Big Geyser, the Hershkowitz family and all their exceptional teams have done for our brands.”
Speaking with BevNET this afternoon, Big Geyser COO Jerry Reda said he was informed by Coca-Cola in a call yesterday that the company would not be renewing its contracts for Hubert’s, Zico and Honest Tea, a move he characterized as “100 percent [Coke’s] decision.”
“We knew that it could happen because the contract was coming to an end,” Reda said, adding that Big Geyser and Coke had had conversations earlier this year about signing a contract extension but the soda company “did not seem to be interested in it.”
“They said they were going to wait and see what happens, and they waited and saw and they let us know that they didn’t want to renew,” Reda said.
Big Geyser will continue to distribute products from Monster Energy in the New York metro area, which it has been doing since 2013. Coke is a minority investor in Monster and distributes its products through its franchise partners in most of the U.S.
Today’s announcement effectively concludes the long-running relationship between Coca-Cola and Big Geyser. Over the years, Coke had recognized the distributor as an effective platform for introducing to the market disruptive early stage brands — like Honest Tea, Zico, Hubert’s and Italian premium coffee brand Illy — from Coke’s Venturing and Emerging Brands (VEB) division. Big Geyser was also the distributor for Coke-owned brand Glaceau, which markets Vitaminwater and Smartwater, until it requested a buyout of its contract to carry those products in 2015.
Big Geyser, founded in 1986, has also served as the Tri-State Area DSD partner for fast-growing brands such as BodyArmor, Core, Soylent and Essentia.
For Coke, the shift will affect several markets. Besides the New York metro area, the areas of coverage for Liberty Coca-Cola Beverage also includes Philadelphia, Long Island, the state of New Jersey, and parts of Delaware. Liberty, founded last year by ex-Coca-Cola Refreshments executives Paul Mulligan and Fran McGorry, operates four production facilities and 10 distribution centers in the region, and also serves parts of Hudson Valley, NY and Fairfield County, CT.
In an emailed statement to BevNET, McGorry wrote that “[Liberty Coca-Cola Beverages is] extremely excited about broadening our portfolio of great brands with Honest Tea, Zico Coconut Water and Hubert’s Lemonade in the New York Metro market. Liberty Coca-Cola Beverages is a locally owned and operated bottler, our employees live and work in our markets and are passionate to give back to our communities, [and] that includes being ambassadors to these refreshing Coca-Cola brands.”
While Reda acknowledged that “nobody likes to lose any brand,” he said that the three brands in question “have not been setting the world on fire the last few years.”
“We do more business with Hal’s Seltzer than we do with Zico and Honest Tea,” he added. “Just put that in perspective.”
In terms of how the departure of Zico, Honest Tea and Hubert’s will affect Big Geyser’s portfolio of brands, he said “It will create opportunities for other brands and we’ll weigh those out.” He also expressed confidence that his company can outperform Liberty Coca-Cola Beverages, whom he said were “getting hammered” by premium water rivals Core and Essentia since taking over regional distribution of Smartwater.
“There’s never been a brand that’s left Big Geyser and gone to another distributor that has excelled,” he said. “Never.”