Industry News | August 21, 2008

Pepsi, Dr Pepper to Expand Crush Brand

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The Pepsi Bottling Group, Inc. (NYSE: PBG - News) and Dr Pepper Snapple Group, Inc. (NYSE: DPS - News) agreed to expand the Crush beverage portfolio throughout the U.S.

“This agreement ... aligns our flavored offerings across the U.S. and Canada,” says PBG North America President Rob King. “The addition of Crush greatly enhances our position in the flavored soft drink category.”

Jim Johnston, DPS president of sales, says: “PBG already has a proven track record when it comes to building and enhancing Crush. 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.”

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 U.S. The agreement is effective immediately and PBG will begin distribution in early 2009. Financial terms were not disclosed.

The Crush brand is already 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.