In its efforts to strengthen its non-carbonated beverage portfolio, PepsiCo forms a strategic alliance with Ocean Spray, one of the country's leading producers of canned and bottled juices and juice drinks. Under the agreement, the companies will co-develop new products.
In addition, Pepsi-Cola North America will market, bottle and distribute single-serve cranberry juice products in the United States and Canada under the Ocean Spray name. For PepsiCo, this deal appeals to the health-conscious consumer, an important shopper for PepsiCo to tap now that the demand for soft drinks is shrinking. For Ocean Spray, the alliance means a stronger presence in more supermarket and convenience store aisles.
"As the Ocean Spray cooperative moves to build its brand, we are seeking out alliances to reach consumers more broadly and powerfully than ever before," says Ocean Spray president and chief executive officer Randy Papadellis. "We're thrilled to re-establish our partnership with Pepsi and begin a fruitful, long-lived relationship with the world's premier beverage and snack company."
This deal is not the first time Ocean Spray and PepsiCo joined forces. In the 1990s, PepsiCo used its distribution system to stock single-serve Ocean Spray products in convenience stores. However, after PepsiCo bought the Tropicana juice brand in 1998, Ocean Spray sought an injunction to prevent PepsiCo from distributing Tropicana products to convenience stores. The lawsuit was dropped around 2000 and all bad blood between the two companies has since been long forgotten.