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Beverage Business Insights
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Bud Wholesalers Organizing to Win Better Monster Exit Terms Bridling at paltry buyout they can expect from soon-departing Monster Energy brand, group of Anheuser-Busch wholesalers are organizing to try to win improvements, tho so far they’re not showing their hand as to how they’ll accomplish that. In emails to fellow Bud distributors, organizers Jeff Vukelic of Saratoga Eagle in upstate NY and Jeff Gower of Wil Fischer in Springfield, Mo, are claiming “overwhelmingly positive” response to initial email sent out last week, and are now gathering signatures for cooperation agreement that precludes supporters from negotiating individual deals with Monster Beverage. Group will be managed by committee that so far includes just Vukelic and Gower but which will be expanded to include representative from each state where Bud wholesalers have come aboard. Per latest memo, terms of any ultimate deal would have to be approved by vote of all wholesalers, who’re being asked to contribute initial $2,500 to cover legal and other expenses. Agreement includes confidentiality clause to try to prevent leaks as strategy is developed. Effort is reminiscent of efforts by some Glaceau distributors to challenge buyout terms over transition of that brand to Coca-Cola back in 07; none is known to have prevailed in court challenges, but a few may have settled on slightly sweetened terms.
As reported, Monster Energy currently splits US between Bud shops and Coke bottlers but plans to migrate brand almost entirely to Coke network as it implements deal calling for investment by Coke in return for stake of co. Monster contract calls for buyout of just 1X gross profit, which Bud operators feel grossly undervalues their contribution to development of brand. “Simply stated, one times gross profit is not anywhere near the value of the brands,” Vukelic and Gower wrote in initial solicitation to fellow beer distributors last week. As earlier reported, departure of brand could severely weaken many Bud houses, to point of forcing some into sale or merger, some beer consultants have warned. Spectacular growth and margin of energy brands has enabled top brands Red Bull and Monster to negotiate uncommonly stingy agreements with indie distributors; if anything, Red Bull’s is worse than Monster’s, calling for no stipulated buyout even for terminations without cause.
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As an effective beverage executive, you need to explore all potential avenues for revenue growth and margin enhancement. Beverage Business Insights -BBI-gives you the info you need to keep up with the latest trends in the dynamic world of non-alcoholic beverages. It's produced by the same team that brings you Beer Marketer's Insights, and is written with the needs of beer wholesalers specifically in mind: straightforward, to the point, and with a street-savvy orientation. BBI helps you to separate the news from the noise.
BBI offers informed assessments of up-and-coming brands and categories. We were among the first to identify coconut water category as a winner, and we have carefully traced the rollout plans of brands like Activate, Body Armor, Neuro and Marley. We give you up-to-date info on the DSD plans of brands like these, and track developments at brands like Vita Coco and Muscle Milk as they prepare to transition out of the independent distribution system. We offer insights into how beer distributors around the country are developing sustainable non-alc beverage businesses, as well as the contract issues that have kept some brand owners outside the DSD system. BBI gives you frequent updates of scanner data in measured channels, so that you know where the growth is. BBI also has kept a close watch on intriguing moves by major beverage players & investors in this space, including Tata Global Beverages' investments in Vitaminwater and Activate as they seek 'experiential' brands with social & environmental goals. BBI goes behind the scenes at major launch platforms like Natural Products Expo West and the NACS convenience store expo, bringing you key emerging beverages. Your subscription cost is a fraction of what you'd pay to attend any of these meetings yourself, plus you get unique and valuable insights from BBI's editor and longtime beverage trendwatcher, Gerry Khermouch.
BBI focuses on what's innovative, what's new and what's moving off the shelves. You get valuable news and in-depth analysis. Since BBI is brought to you by Beer Marketer's INSIGHTS, the leading trade publisher for the beer business for over 40 years, you can count on our dedication to fairness, accuracy and timeliness.
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Here is some of the info BBI readers had access to recently:
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- And much, much more!
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