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Pepsi, Starbucks plan expansion of Tazo tea distribution

BY Jenna Duncan

PURCHASE, N.Y. and SEATTLE PepsiCo and Starbucks have said that they will distribute Tazo bottled iced teas more widely beginning this fall. The move comes as a response to slowing U.S. sales of carbonated soft drinks and a move on Pepsi’s part to boost bottled beverage sales.

The two companies said they plan to give Tazo ready-to-drink teas more exposure and expand their presence beyond Starbucks coffee shops by making the teas available across the United States by mid-October.

Additionally, Starbucks, PepsiCo and Unilever will make and sell Tazo drinks, expanding on a distribution partnership already in place to handle and distribute Lipton teas.

According to the Nielsen Company, ready-to-drink tea sales grew by 6.6 percent for the year ended in July—a slowdown from three years prior. But analysts predicted that the slowdown was due more in part to lighter consumer spending of late, and they said that tea sales were likely to blossom again, once the U.S. economy rebounds.

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InBev hires Anheuser-Busch chief executive officer as consultant

BY Jenna Duncan

ST. LOUIS Anheuser-Busch and InBev have said that A-B chief executive officer, August Busch IV, will receive about $10.4 million and $120,000 a month after the completion of sale of A-B to InBev for his services as consultant. The arrangement will last through 2013, the companies said Friday in a statement filed at the Securities and Exchange Commission.

Details of Busch’s contract are still being worked out, the companies said. And Busch, may also receive an added $13.3 million for other benefits.

Last month InBev purchased American beer giant A-B for $52 billion. Together, the companies will form Anheuser-Busch-InBev, maintaining a North American base in St. Louis. Additionally, InBev has promised to keep A-B’s 12 U.S. breweries in business.

Busch’s duties with the new company will include planning new products and business opportunities, meeting with retailers, wholesalers and advertisers, and reviewing marketing projects. Reports said that he will remain in St. Louis.

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Positive outlook forecasted for retail direct store delivery sales

BY Jenna Duncan

WASHINGTON Most retailers that operate direct store delivery processes have said that they expect that part of their business to grow or remain constant for 2008, according to a study released today by Grocery Manufacturers Association. The study, titled “Powering Growth Through Direct Store Delivery,” was conducted by AMR Research and Clarkston Consulting.

Study results showed that 77 percent of retailers examined said that their DSD business is growing or remaining stable. The study also showed that DSD comprises 24 percent of unit sales and a whopping 52 percent of the grocery channel’s retail profits. According to GMA, this means sales opportunity.

“Direct store delivery improvements represent manufacturer-customer collaboration at its finest,” Stephen Sibert, GMA senior vice president of industry affairs, said. “This study indicates that both retailers and manufacturers are being rewarded for DSD innovations from enhanced promotional effectiveness to increased brand and store loyalty.”

GMA’s findings also stated that seven out of the ten biggest grocery categories use DSD, and between 2003 to 2007, they saw 15 percent growth in sales.

The study on DSD was conducted by GMA Direct Store Delivery Committee and was based on both qualitative and quantitative research on companies that use the practice and those that do not, as well as company environments. Findings are located online at www.gmabrands.com/publications/DSD_Report_FINAL_0808.pdf.

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