If PepsiCo’s nascent distribution deal with energy drink brand Celsius is any indication, Keurig Dr Pepper could open lots of retail doors for Nutrabolt’s C4 beverage line.
Last week, Keurig Dr Pepper said it would spend $863 million for an approximately 30% share in C4 parent Nutrabolt in a transaction that includes a long-term sales and distribution agreement.
While Nutrabolt will continue to distribute C4 to specialty, health club and fitness channels through its existing distribution network, C4 will soon leverage Keurig Dr Pepper’s direct-store-distribution network.
Bank of America noted that the deal “makes strategic sense” for Keurig Dr Pepper given the company’s “appetite to expand its portfolio via partnerships/acquisitions and in that it also provides a meaningful entry into the energy drink category.”
In a news release, the companies said C4’s transition to Keurig Dr Pepper’s distribution “will occur during 2023” and will have “limited impact” on the latter company’s financial results until 2024.
In August, PepsiCo paid $550 million for just under 10% ownership of Celsius, whose beverages gained entry to the PepsiCo distribution network on Oct. 1.
Founded in 2004 and now offering 30 flavors, Celsius picked up shelf space formerly occupied by Bang Energy following the dissolution of its distribution agreement with PepsiCo in June.
By late October, Celsius had taken Bang Energy’s #3 position in the U.S. energy drinks category after posting a 98% increase in revenue in the third quarter ended Sept. 30.
While still in the early days of the PepsiCo relationship, Celsius said it had gained an approximately 11% increase in All Commodity Volume (ACV) “with average items carried per store increasing from an average of 7.7% to 8.3%.”
The deal with Texas-based Nutrabolt caps months of speculation about Keurig Dr Pepper’s ambitions.
In August, Keurig Dr Pepper said it was not pursuing “a partnership” with Bang Energy parent Vital Pharmaceuticals Inc. after Bloomberg reported that discussions had taken place.
On Oct. 10, Vital filed for Chapter 11 bankruptcy status.
The same month, Keurig Dr Pepper announced a distribution partnership with Red Bull in Mexico.