(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)
November 12, 2012 08:30 ET (13:30 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.- - 08 30 AM EST 11-12-12
Sentiment: Strong Buy
Because I have either worked for or consulted for major food & beverage companies for 30 years and I know how they think.
I'm making an educated guess that Campbell makes more money selling a bottle of juice that they sell directly, especially one priced like V8, than they will from the royalties they receive from SODA selling their version. Consequently they won't want to compete in the same retail grocery outlet and risk canniblizing their sales.
I think they would rather error on the side of assuming it is not a different user rather than assuming that it is.
It would be interesting to learn all the terms of the deal. Sounds like a good assignment for Seth.
Denise Morrison, close to lapping her first year as CEO of Campbell Soup CPB , is making a bigger play into the healthy drinks market with a $1.55 billion deal for privately-held Bolthouse Farms.
It’s a move to help spur new growth avenues.
Bolthouse makes carrot juices, fruit smoothie and protein drinks. This line up will augment Campbell’s growing V8 business, a bright spot for the company considering declining growth in Campbell’s traditional canned soup business. Before Morrison was elevated to the CEO office, she earned kudos for expanding Campbell’s classic V8 tomato juice into the faster-growing energy and smoothies drinks categories.
With Bolthouse, a deal slated to close in August, Campbell’s will operate a U.S. beverage business with $1.2 billion in sales.
Beverages are a growing piece of Campbell’s business. Through the nine months ended April 29, sales rose 2% to $593 million. Compare that to Campbell’s soup business. During the same period, U.S. soup sales fell 3%.
"Initial flavors for the V8 Splash products will include Tropical Blend, Berry Blend and Fruit Medley, as well as V8 V-Fusion concentrates in Strawberry Banana, Pomegranate Blueberry and Peach Mango varieties. The products are expected to be available during the second quarter of 2013. The terms of the agreement were not disclosed."
I think V8 is all Campbells has in beverages.
Nice move by SODA into healthier beverages.
Initial flavors for the V8 Splash products will include Tropical Blend, Berry Blend and Fruit Medley, as well as V8 V-Fusion concentrates in Strawberry Banana, Pomegranate Blueberry and Peach Mango varieties. The products are expected to be available during the second quarter of 2013. The terms of the agreement were not disclosed.
"Creating V8 Splash and V8 V-Fusion products through the popular SodaStream carbonated beverage system gives people another way to enjoy their favorite V8 beverages and brings new growth for Campbell's beverage business," said Michael Barkley, Campbell's Vice President and General Manager, Beverages.
"We are excited to bring together our revolutionary beverage system with a respected company like Campbell, who is well-known for their iconic brands," stated Daniel Birnbaum, CEO of SodaStream. "This relationship demonstrates our commitment to providing innovative products, and we are confident that the addition of the delicious V8 Splash and V8 V-Fusion drinks to our product portfolio will further strengthen the appeal of SodaStream's many benefits. We believe this partnership will help us attract new consumers who already enjoy these brands but have yet to discover how smart, simple and empowering it is to be able to make great tasting carbonated V8 beverages at home."