You are here
Coca-Cola, hit by a slowdown in fizzy drinks sales, may be looking to expand into vitamin-enriched milk after the firm's bottling arm announced talks to buy control of Bravo! Foods.
Coke's biggest bottler, Atlanta-based Coca-Cola Enterprises (CCE), is negotiating a distribution agreement with Bravo!, producer of vitamin-fortified, flavored milk Slammers.
According to BeverageDaily.com, the proposed deal would allow CCE to buy up more than half of Bravo!'s shares and gain exclusive distribution rights on all current and future Bravo! products in the areas that CCE already distributes Coca-Cola products, including North America.
The move has sparked new speculation that Coca-Cola itself may be preparing to jump in alongside its bottling partner. A spokesperson for Coca-Cola advised caution, saying CCE was only in the early stages of an approach for Bravo!
But the world's biggest soft drinks firm continues to face problems in its traditional carbonated portfolio, with a slowdown in sales last year recently followed by a 1 percent dip in volumes across North America in the first half of 2005.
The problems have been widely blamed on health-conscious consumers rejecting sugar-laden fizzy sodas. As a result, Coca-Cola has openly pursued a greater focus on diet and non-carbonated soft drinks with a raft of product launches, such as the sugar-free energy drink, Throttle, and Coca Cola Zero.
BeverageDaily.com reports that the company has also spent more money on its functional portfolio, especially in the UK where it plans to launch vitamin-enriched soft drink Ipsei and has also been given approval to launch a new, cholesterol-lowering juice.
Coca-Cola has tried unsuccessfully to get into milk twice before over the last few years, but Bravo! appears to be its best chance yet.
The group fits Coca-Cola's R&D priority on functional drinks and has already begun to be established as a brand name among consumers and retailers.
Bravo!, for its part, said the prospective deal with CCE would be mutually beneficial for both companies. Until now, Bravo! has spread its wings throughout the United States, Mexico and Middle East using regional milk processors, but a deal with CCE could seriously extend its reach.
With growing success, Bravo! recently shipped its Slammers flavored milk drinks to 22 convenience store/petroleum chains, representing 3,333 locations in more than 13 states, including California, Texas and New York.
Bravo! CEO Roy Warren said, "While sales have been healthy in the past few months among grocers, we are particularly excited about recent achievements in the convenience store sector, where brand awareness is growing and reorders are encouraging new customer acceptance."
Warren continued, "Our single-serve milk drinks are perfectly matched to the convenience store market, not only due to their great flavor, brand appeal and nutrition, but also because they can be distributed by any of a number of distribution systems."
Recent additions to nationwide convenience store retailers that are now offering Slammers flavored milk drinks include: BP (AM/PM), ChevronTexaco, Circle K, FasTrip, Fastrac, Food Fast, G&M Oil Co., Gas America, Getty Mart, Irving Oil Corp, Island Foods, Kabrellos, Krause Gentle Corp., Maverik Country St., Pico, Pilot, Spynx Stores, Tower Energy, Twin Cities Avanti (Oasis Markets), USA Petroleum and Winner's Corner.