Coke bottler signs functional milk rights
By Chris Mercer
Coca-Cola�s bottling arm has agreed a 10-year,
exclusive distribution deal with functional milk
drinks maker Bravo! Foods, offering Coke a new
way to escape stagnant fizzy drinks sales.
The deal, which
only covers the US for now, will begin in the
fourth quarter of 2005 and includes rights to
distribute Bravo!'s wide range of
vitamin-fortified and flavoured milk �Slammers'.
Coca-Cola Enterprises (CCE) will also have
the option of taking up a 10 per cent stake in
Bravo! for $10.8m (�8.7m). Initial proposals
would have allowed CCE to buy up more than half
of Bravo!'s shares, but the revised deal still
opens a new avenue for the firm.
"Bravo! has a strong line-up of
shelf-stable milk products, which we believe
will be an excellent addition to our product
portfolio," said John Alm, CCE president.
CCE has so far denied speculation that
Coca-Cola itself may be preparing to jump in
alongside its bottling partner. It is, however,
somewhat unusual for CCE to go its own way and
some kind of move in the future cannot be ruled
The world's biggest soft drinks firm has
openly pursued a bigger focus on marketing and
developing value-added and healthier soft drinks
as its traditional carbonated portfolio has
carbonated division's sales slowed in 2004 and
volumes dipped one per cent across North America
in the first half of 2005.
As a result, Coca-Cola has made a raft of new
non-fizzy and diet drinks launches, including
sugar free energy drink, Throttle, and Coca Cola
Zero. The firm has also spent more on
functional drinks and plans to launch the
UK's first cholesterol-lowering juice.
Bravo! may provide a nice extension to this
strategy, and Coca-Cola has already tried twice
to get in to milk drinks in recent years.
Coke's great rival, PepsiCo, also launched
its fortified �milk chillers' under the Quaker
brand in August.
CCE's Bravo! deal now represents a good
opportunity for Coca-Cola to enter the sector
via a brand name that has already begun to
establish itself among retailers and consumers.
"Slammers reinvent traditional milk
drinks, providing great tasting, quality milk
drinks that can be distributed with limited or
no refrigeration," said Bravo! chief
executive Roy Warren.
"Slammers are packaged with shelf-stable
technology that allows for long shelf life and
ambient storage. This advancement allows the
Slammers brand to become a serious competitor in
the multi-billion dollar 'better-for-you' drink
business, which is now the fastest growing
segment of the beverage industry."
Bravo! Foods' UK subsidiary, Bravo! Brands,
recently signed a supply deal with the UK's
third biggest supermarket, Sainsbury's.