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News Releases
The Pepsi Bottling Group and Dr Pepper Snapple Group Sign Agreement to Expand Crush Brand Distribution
Deal With DPS Aligns and Strengthens PBG’s Flavor Portfolio
SOMERS, NY and PLANO, TX – August 21, 2008 – The Pepsi Bottling Group, Inc. (NYSE: PBG) and Dr Pepper Snapple Group, Inc. (NYSE: DPS) today announced that the companies have signed an agreement to make the Crush beverage portfolio available in the majority of PBG’s territories throughout the United States. “At PBG, we continue to look for ways to strengthen and diversify our product portfolio. This agreement is an important part of our strategy to do so, as it aligns our flavored offerings across the U.S. and Canada,” said PBG North America President Rob King. “The addition of Crush greatly enhances our position in the flavored soft drink category, as it’s a terrific brand with broad consumer appeal and attractive growth prospects.” Jim Johnston, DPS President of Sales, said: “PBG already has a proven track record when it comes to building and enhancing Crush, having helped us grow the brand into one of the leading flavored soft drinks in Canada. With flavors playing an increasingly important role in the carbonated soft drink category, we’re confident that together we can repeat that success in the U.S. and make Crush a popular national brand available to more consumers in more outlets. Simply put, it’s a brand with tremendous untapped potential.” Under the terms of the agreement, PBG will have a perpetual license to manufacture, sell and distribute the brand, which includes such flavors as Orange Crush, Diet Orange Crush, and Grape Crush, in about 80 percent of its territories throughout the United States. The agreement is effective immediately and PBG will begin distribution in early 2009. Financial terms were not disclosed. The Crush brand is currently available in less than 40 percent of the U.S. The agreement with PBG will nearly double its market penetration, positioning the brand well for future growth. Flavored carbonated soft drinks now account for almost half of all carbonated soft drink (CSD) sales in the U.S., and Orange Crush and Diet Orange compete in the fourth largest segment of the flavor category. Orange and grape flavors represent a five percent share of the CSD market in the U.S. Crush has been a fixture in the CSD space for decades, with tremendous name recognition among consumers. Market research shows that three out of four Americans are aware of the brand. About PBG About DPS Forward-Looking Statement only as to the date hereof. Accordingly, any forward-looking statement, with respect to PBG, should be read in conjunction with the additional information about risks and uncertainties set forth in PBG's Securities and Exchange Commission reports, including PBG's annual report on Form 10-K for the year ended December 29, 2007, and with respect to DPS, should be read in conjunction with the additional information about risks and uncertainties set forth in DPS Securities and Exchange Commission Filings, including DPS’ registration statement on Form 10 filed April 22, 2008.
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