Beverage packaging: PepsiCo continues bottler integration

Gatorade to be distributed via direct store delivery system for select channels in 2011

-- Packaging Digest, 9/7/2010 11:38:16 AM

PepsiCo has announced a change of distribution for its Gatorade products in the key trade channels of Convenience, UDS (up and down the street) and Dollar from a warehouse-delivered go-to-market system to direct store delivery through both company-owned and independent bottlers in the United States and Canada. The company expects the change to become effective January 1, 2011.

"This is a clear example of using PepsiCo's broad set of go-to-market systems to best serve our customers. We remain dedicated to the existing warehouse distribution system for some of our beverage products, but the change to direct store delivery makes sense for Gatorade as we redefine the sports nutrition category through the G Series," said Massimo d'Amore, CEO of PepsiCo Beverages Americas. "As a company, we are committed to bringing a wider variety of products to market more quickly and efficiently than ever before."

This will be the first large scale step toward optimizing delivery systems resulting from the bottling acquisitions earlier this year. The expected synergies related to these changes are included in the company's target of $400 million in pre-tax annualized synergies from the bottling acquisitions once fully implemented by 2012.

"The distribution of Gatorade in key trade channels of Convenience, UDS and Dollar is well suited to the direct store delivery model due to its high velocity, so the switch will result in better store-level customer service," added Eric Foss, CEO of Pepsi Beverages Company. "By achieving greater speed, simplicity and flexibility, we will be able to better serve the current and future needs of both our retail customers and consumers in the marketplace."

Other PepsiCo brands that are warehouse-delivered to the key trade channels of Convenience, UDS and Dollar, including Tropicana, Quaker and Naked Juice, will not be affected by this change.

SOURCE: PepsiCo

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