Dr Pepper Snapple Group (DPS) recently announced an extension of its sponsorship deal with Pittsburgh Penguins hockey team by another 7 years through July 2020.
Under its multi-year marketing and sponsorship deal with the popular hockey team, DPS exclusively provides carbonated soft drinks such as Dr Pepper, Diet Dr Pepper, 7UP, RC Cola as well as other beverages like teas, bottled water, energy drinks, juices and juice drinks since 2010 at the CONSOL Energy Center, a leading entertainment venue in Western Pa.
In addition to continuation of these rights, DPS will receive certain advertising provisions such as radio broadcast, in-venue signs and an annual playoff promotion. Alongside, it will also continue its “Cap Trick” program.
In early March, Dr Pepper entered into a deal to buy back distribution rights for several of its brands for certain parts of Asia-Pacific from snack company, Mondelez International, Inc. (MDLZ).
Dr Pepper lacks significant exposure outside the U.S. Dr Pepper mainly operates within the U.S., Canada and Mexico, which are experiencing saturation. It thus lacks exposure in the fast emerging markets where demand is growing and health consciousness is comparatively less than the western countries.
This is a significant competitive disadvantage for Dr Pepper versus its peers like The Coca Cola Company (KO) and PepsiCo, Inc. (PEP), which are fast expanding and exploring markets outside the U.S. The Mondelez deal will help Dr Pepper gain foothold in a growing market and thereby increase the popularity of its brands outside the U.S.
Dr Pepper carries a Zacks Rank #3 (Hold).
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