Massachusetts-based Polar Beverages has secured a long-term manufacturing and distribution agreement with Keurig Dr Pepper (KDP) for its 35-SKU line of seltzer products, the companies announced today. Terms of the deal were not disclosed.
Polar’s Seltzers, as well as its Seltzer’ade and Seltzer Jr. products, will be integrated into the majority of KDP’s direct-store-delivery (DSD) distribution network, according to a release. Polar, which has manufactured and distributed KDP beverages for decades in the Northeast, will continue to manufacture and sell its seltzer products in existing territories, as will some select distribution partners. The company will “continue to drive marketing, brand and innovation leadership.”
“We are very proud of Polar Seltzer’s 138-year heritage and independent spirit,” said Polar president and CEO Ralph D. Crowley Jr. “Our expanded partnership with KDP opens a dynamic new chapter, and we look forward to sharing our family of seltzers with their unrivaled sales and distribution network.”
The partnership is set to widely expand availability for Polar’s seltzer products, which currently has a nationwide presence under 35%. The brand, a family owned and operated company based in Worcester, Mass. since 1882, markets both flavored and unflavored seltzer varieties in a variety of formats, as well as other soft drinks and refreshment beverages. Through June 30, the company has seen seltzer MULO sales (including c-stores) increase 14.8% year-over-year, according to data from IRI.
While KDP has been actively reshaping its bottled water portfolio over recent years, the company’s presence in the booming sparkling water category remains limited to products under the Canada Dry and Schweppes banners. Earlier this year, it acquired Chicago-based Limitless, maker of a caffeinated sparkling water line, for an undisclosed fee.
The Polar deal puts KDP in position to compete more aggressively with Coca-Cola (AHA) and PepsiCo (Bubly) for space in a thriving beverage segment.
“Polar Seltzer is an iconic and leading brand in the Northeast, and we are eager to expand that growth across the country,” said Derek Hopkins, KDP Chief Commercial Officer. “The sparkling water category shows no sign of slowing down and our already strong partnership with Polar Beverages will accelerate our ability to ensure that Polar Seltzer is available wherever consumers shop.”
“You’re seeing explosive growth [from Polar] and we, as I said before, could have come at this just by an acquisition, we could have come at it by trying to develop our own brand and we thought this was the best way to go,” said KDP CEO Bob Gamgort during the Q&A portion of the company’s Q2 earnings call on Thursday. “This is the highest velocity brand in the category. They have one challenge, and that is they’re only in about a third of the country.”