ATLANTA (AP) — June 7th, 2010
Coca-Cola Co. says it will distribute certain drinks made by Dr Pepper and Snapple (DPS) as part of a $715 million deal.
The agreement was announced Monday morning.
Under the terms of the deal, Coca-Cola (KO) will distribute Dr Pepper and Canada Dry ginger ale in the United States. It will also distribute drinks in Canada. Dr Pepper Snapple gets a one-time $715 million payment from Coca-Cola.
The beverages were previously distributed by Coca-Cola Enterprises, which Coca-Cola is acquiring. Monday's agreement replaces an established deal between Coca-Cola Enterprises and Dr Pepper.
The new agreement will last for 20 years and includes renewal options.
As part of the deal, Dr Pepper and Diet Dr Pepper will be included in Coke's new "Freestyle" fountain dispenser, which can mix more than 100 drinks.
Dr Pepper paid Coca-Cola between $115 million and $135 million to be the only non-Coke product on the high-tech dispenser, which is expected to be in 500 locations by the end of the summer.
In December, Dr Pepper inked a similar deal with Pepsi (PEP) for $900 million. Both Coca-Cola and Pepsi are trying to gain more control over their bottlers and distributors, hoping to get new drinks on shelves more quickly to keep up with changing tastes.
Coca-Cola Co. says it will distribute certain drinks made by Dr Pepper and Snapple (DPS) as part of a $715 million deal.
The agreement was announced Monday morning.
Under the terms of the deal, Coca-Cola (KO) will distribute Dr Pepper and Canada Dry ginger ale in the United States. It will also distribute drinks in Canada. Dr Pepper Snapple gets a one-time $715 million payment from Coca-Cola.
The beverages were previously distributed by Coca-Cola Enterprises, which Coca-Cola is acquiring. Monday's agreement replaces an established deal between Coca-Cola Enterprises and Dr Pepper.
The new agreement will last for 20 years and includes renewal options.
As part of the deal, Dr Pepper and Diet Dr Pepper will be included in Coke's new "Freestyle" fountain dispenser, which can mix more than 100 drinks.
Dr Pepper paid Coca-Cola between $115 million and $135 million to be the only non-Coke product on the high-tech dispenser, which is expected to be in 500 locations by the end of the summer.
In December, Dr Pepper inked a similar deal with Pepsi (PEP) for $900 million. Both Coca-Cola and Pepsi are trying to gain more control over their bottlers and distributors, hoping to get new drinks on shelves more quickly to keep up with changing tastes.
As I finished reading the story, the terrible realization hit me: if the rumours were true and Pibb was only available in places where Coca Cola didn't own the rights to distribute Dr Pepper, would this deal mean the end of Pibb? I started to panic. I needed some clarity, so I emailed my new friend Larry immediately:
From: Pibb Lover
To: Larry Thomas
Date: Thu, Jun 10, 2010 at 1:18 PM
Subject: Re: Hello my Pibb-loving brothers!
Hi Larry,
Thanks so much for your quick reply! I am extremely envious of the fact that you can get 12 packs of Pibb there - it seems crazy that they don't sell it in San Diego!
It's also exciting to hear that I'm not the only English person who's a fan of Pibb. We obviously have good taste!
I would definitely love to come and see your Pibb collection sometime soon, and document it for my blog! When are you usually available?
Also, I'd like to share some news with you. I was initially excited to read this news announcement, earlier today. However, my excitement soon turned to despair when I realised that the inclusion of Dr Pepper in Coke's new freestyle fountain dispenser might mean that Pibb gets left out, or discontinued entirely! Do you think that is possible? I am really hoping it won't be true. Let's keep our fingers crossed!
Many thanks,
San Diego Pibb Lover
To: Larry Thomas
Date: Thu, Jun 10, 2010 at 1:18 PM
Subject: Re: Hello my Pibb-loving brothers!
Hi Larry,
Thanks so much for your quick reply! I am extremely envious of the fact that you can get 12 packs of Pibb there - it seems crazy that they don't sell it in San Diego!
It's also exciting to hear that I'm not the only English person who's a fan of Pibb. We obviously have good taste!
I would definitely love to come and see your Pibb collection sometime soon, and document it for my blog! When are you usually available?
Also, I'd like to share some news with you. I was initially excited to read this news announcement, earlier today. However, my excitement soon turned to despair when I realised that the inclusion of Dr Pepper in Coke's new freestyle fountain dispenser might mean that Pibb gets left out, or discontinued entirely! Do you think that is possible? I am really hoping it won't be true. Let's keep our fingers crossed!
Many thanks,
San Diego Pibb Lover
This time, I had to wait a little longer for the response. Whilst I waited for an email to appear in my inbox, I decided to investigate something in the news story which had caught my eye: "the new 'Freestyle' fountain dispenser, which can mix more than 100 drinks". I found this story, on a local news site, which describes the new dispensers as "the soda fountain of the future" and then explains exactly how they work. I had to admit, they sounded amazing, but what would be the point of having the choice of so many new flavours if Pibb wasn't amongst them? It all seemed like a cruel joke.
Finally, after almost two agonising days of waiting, I received another reply from Larry. I opened it with trepidation, afraid of what it might say. This was his response:
From: Larry Thomas
To: Pibb Lover
Date: Sat, Jun 12, 2010 at 12:39 AM
Subject: Re: Hello my Pibb-loving brothers!
Hi again,
The way the Coca-Cola company has been bottling and distributing Pibb is rather confusing. The way it's been for many years is that Coca-Cola will only bottle and distribute Pibb in regions where they were unable to secure a deal with Dr. Pepper. Dr. Pepper requires a 'No Competition' clause in their agreement with Coke which forbids Coke from producing Pibb in every region where they have an arrangement with Coke.
The Coca-Cola company would much rather offer Dr. Pepper instead of their own brand (Pibb) and will only produce Pibb in areas where Pepsi or 7UP has obtained the rights to offer Dr. Pepper. San Diego, Orange, Riverside, San Bernardino and Los Angeles Counties have all been 'Dr. Pepper only' territories because Coke owns the rights to distribute Dr. Pepper in those areas.
But in Kern County (Bakersfield) and also the Fresno area, Coke does not have the right to distribute Dr. Pepper (Pepsi has that agreement) and so they can offer Pibb in cans and bottles to compete. However in recent years Coke has chosen to scale back the production of Pibb in cans and bottles and it can now only be found in a few stores like Albertson's in Bakersfield. Vons no longer offers it.
The fountain drink dispensing machines in fast food places and restaurants are a different situation and have nothing to do with the bottling agreements that I mentioned. For many years Pibb was available at McDonalds but that is no longer the case. McDonalds decided they wanted Dr. Pepper and so they switched over about 6 months ago.
My guess is that Pibb might be completely phased out at some point because it just hasn't been a good seller for Coke. I hope that doesn't happen but it wouldn't surprise me if it did.
I read on your blog that you would like a copy of the Pibb game on floppy disc. I'm sure I have some spares around and will give you one when you visit. How soon do you want to come? Sundays are usually good for me and it's also probably the best day to avoid traffic. Any Sunday this month would probably be good for me but if you'd rather come on a different day I can arrange that as well. Our collection is mostly packed in boxes now but we have some items out and I can open up a few of the boxes and show you some of our favorite items.
Bye for now.
Larry
To: Pibb Lover
Date: Sat, Jun 12, 2010 at 12:39 AM
Subject: Re: Hello my Pibb-loving brothers!
Hi again,
The way the Coca-Cola company has been bottling and distributing Pibb is rather confusing. The way it's been for many years is that Coca-Cola will only bottle and distribute Pibb in regions where they were unable to secure a deal with Dr. Pepper. Dr. Pepper requires a 'No Competition' clause in their agreement with Coke which forbids Coke from producing Pibb in every region where they have an arrangement with Coke.
The Coca-Cola company would much rather offer Dr. Pepper instead of their own brand (Pibb) and will only produce Pibb in areas where Pepsi or 7UP has obtained the rights to offer Dr. Pepper. San Diego, Orange, Riverside, San Bernardino and Los Angeles Counties have all been 'Dr. Pepper only' territories because Coke owns the rights to distribute Dr. Pepper in those areas.
But in Kern County (Bakersfield) and also the Fresno area, Coke does not have the right to distribute Dr. Pepper (Pepsi has that agreement) and so they can offer Pibb in cans and bottles to compete. However in recent years Coke has chosen to scale back the production of Pibb in cans and bottles and it can now only be found in a few stores like Albertson's in Bakersfield. Vons no longer offers it.
The fountain drink dispensing machines in fast food places and restaurants are a different situation and have nothing to do with the bottling agreements that I mentioned. For many years Pibb was available at McDonalds but that is no longer the case. McDonalds decided they wanted Dr. Pepper and so they switched over about 6 months ago.
My guess is that Pibb might be completely phased out at some point because it just hasn't been a good seller for Coke. I hope that doesn't happen but it wouldn't surprise me if it did.
I read on your blog that you would like a copy of the Pibb game on floppy disc. I'm sure I have some spares around and will give you one when you visit. How soon do you want to come? Sundays are usually good for me and it's also probably the best day to avoid traffic. Any Sunday this month would probably be good for me but if you'd rather come on a different day I can arrange that as well. Our collection is mostly packed in boxes now but we have some items out and I can open up a few of the boxes and show you some of our favorite items.
Bye for now.
Larry
Despite my excitement about getting a copy of the Mr Pibb game on disc, and a potential visit to meet Larry and see his Pibb collection, I was furious. How could Coca Cola be doing this? Were they insane? Didn't they care about people like Philip and Larry and I?
I couldn't take it any more. This was criminal! Somebody had to stand up for all the Pibb-lovers out there! I decided to write to Coca Cola.
0 comments:
Post a Comment