Coke, Campbell In Distribution Deal For V8 Line Of Juices

The world's largest soup maker and the world's largest beverage company are joining forces to bring healthy drinks to more points of sale.

Coca-Cola will adding to its growing "healthy halo" with an agreement to distribute Campbell vegetable juice drinks, filling a hole in Coke's portfolio that includes fruit drinks and water as well as its iconic carbonated soda.

The agreement, which also was made with Coke's largest bottler, includes Campbell's V8, V8 V-Fusion and V8 Splash as well as the company's tomato juice in containers of 24 ounces or less. That means those products, sold mainly in supermarkets, could show up in other places, a lot more places, such as convenience stores, delicatessens and vending machines.

"Health and wellness have become an important component of the beverage industry today," says John Sicher editor and publisher of Beverage Digest. "Coke gets a line of beverages that plays into that."

While most consumers won't know the V8 they find in their local deli was brought there by Coke, the important result of the deal, says Sicher, is that Coke is "making sure its bottlers and its retail customers have a broad portfolio of drinks."

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Analysts say the deal could double or triple Campbell's single-serve business, estimated at $80-90 million in annual sales.

Coca-Cola's largest bottlers earlier this year went outside their franchise areas to compete with Coke itself after being frustrated by Coke's apparent inability or unwillingness to create or purchase leaders in the non-carbonated category.

Coke recently has made several non-carb purchases, including Fuze, a maker of juice and tea drinks, and Glaceau, maker of Vitaminwater. As Gerry Khermouch, executive editor of Beverage Marketer's Insights, noted in a recent column published in Brandweek, the Glaceau deal showed "that after years of mostly idle rhetoric, Coke is finally getting serious about recouping lost ground."

For its part, Campbell says its beverage line is the top-performing business for the company, which also produces Pepperidge Farm baked goods, Prego pasta sauce and Godiva chocolates. Coke earlier signed a licensing agreement with Campbell for the use of its Godiva brand name for a chocolate coffee drink it launched last year.

Sales of the products Coke now will distribute for Campbell's make up 15% of the soup maker's total beverage sales.

Financial terms of the deal were not released. Coke begins distribution in September.

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