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In a move that company executives say will help to better serve customers in the U.S. Pacific Northwest, 17 Pepsi bottlers are forming a regional manufacturing joint venture called Pepsi Northwest Beverages LLC.
Pepsi Northwest Beverages will manufacture and source products to all of Alaska, parts of Washington, Oregon and Idaho, as well as one market in Northern California. Its volume represents about 3 percent of total Pepsi bottle and can volume in the U.S.
The new entity, based in Tumwater, Wash., will be anchored by The Pepsi Bottling Group Inc. (PBG), the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages. PBG owns 56 percent of the joint venture. It will include PBG's manufacturing plants in Seattle and Portland, Ore., and three bottler-owned co-ops.
"The establishment of this new joint venture will help the Pepsi system to better serve our customers in the Pacific Northwest region. As many of our larger customers have consolidated their businesses, they've asked their suppliers for greater uniformity across their operations," said PBG's executive vice president of Worldwide Operations Gary K. Wandschneider.
"Working as a single organization, the members of Pepsi Northwest Beverages will be able to present our customers with an aligned product portfolio, including innovation, and provide better service across individual bottler territories. We will also be able to leverage PBG's best practices across the supply chain for greater efficiencies," he continued.
Tom Connolly, a 15-year veteran of PBG, has been appointed general manager of Pepsi Northwest Beverages. He most recently served as PBG's director of infrastructure and has also been plant manager for two PBG manufacturing facilities.
In other recent Pepsi news, Ocean Spray and PepsiCo Inc. announced a long-term strategic alliance in which Pepsi-Cola North America will market, bottle and distribute single-serve cranberry juice products in the U.S. and Canada under the Ocean Spray name. Integration of single-serve juices into the Pepsi system will begin in 2007.
The agreement also includes opportunities for the development of new product innovations across multiple trade channels in the future.
"This is a chance for both PepsiCo and Ocean Spray to turn up the dialogue on the health benefits of cranberries," said Dawn Hudson, president and CEO of Purchase, NY-based Pepsi-Cola North America, the refreshment beverage unit of PepsiCo. in the U.S. and Canada. "Over the past several years, we've built successful, mutually beneficial partnerships with strong brands like Lipton and Starbucks, and now we plan to work side-by-side with Ocean Spray to create a major healthy refreshment business focused on cranberries. When people think of cranberries, they think of Ocean Spray."
Randy Papadellis, president and CEO of Lakeville, Mass.-based Ocean Spray, added, "As the Ocean Spray cooperative moves to build its brand, we are seeking out alliances to reach consumers more broadly and powerfully than ever before. We're thrilled to re-establish our partnership with Pepsi and begin a fruitful, long-lived relationship with the world’s premier beverage and snack company."