GO
Loading...

Enter multiple symbols separated by commas

Pepsi Deal Will Rock The Energy Drink Aisle

The competition among energy drinks is about to get a burst of adrenaline.

PepsiCo agreed to become the exclusive distributor of Rockstar energy drinks across the bulk of the U.S. and Canadian market. This deal gives Pepsi some much needed muscle in the energy drink category and has the potential to shift the dynamics among the leading energy drink brands.

energy_drinks[1].jpg

"We believe the news is a positive for Pepsi Bottling Group and PepsiAmericas and a negative for Coca-Cola Enterprises , who currently distributes Rockstar," says Mark Swartzberg, an analyst at Stifel Nicolaus, in a research note.

Rockstar is the number three energy drink in the U.S., after Monster and Red Bull.

Energy drinks remain a small slice of the total U.S. beverage business, but it's a growing and profitable piece. That makes it a rare positive industry story as cola sales continue to slump.

With the Rockstar distribution deal, Pepsi Bottling will now have a 22 percent share of the market. That figure combines Rockstar, and PepsiCo's Amp and No Fear. But the brands still trail behind category leader Red Bull and Hansen's Monster, so there's still room to run.

Rockstar's been losing market share to Monster, which has been distributed by a combination of Anheuser-Busch distributors, Coke bottlers and independent bottlers. (The Coke system has about 40 percent of Monster's U.S. volume, according to Swartzberg.)

So look for the pressure build.

More from Consumer Nation:

Questions? Comments? Email us at consumernation@cnbc.com

  • Christina Cheddar Berk is editor of CNBC.com's Consumer Nation and chief trend spotter.

  • Courtney-Reagan-140.jpg

    Courtney Reagan is CNBC's Retail Reporter.

  • Tom Rotunno

    Tom is a Senior Editor and Assignment Desk Manager for CNBC TV. He also writes about the business of beer for CNBC.com.

  • Staff Writer

  • Stephanie Landsman is one of the producers of "Fast Money."

Retail

  • A worker prepares packages for delivery at an Amazon.com warehouse in Brieselang, Germany.

    Still no profits, but Amazon has managed to grow its stock because of this simple factor, Morningstar's R.J. Hottovy says.

  • 'Smart' malls embrace urge to merge

    CNBC's Courtney Reagan takes a look at how some malls are using innovation to entice traffic and provide a shopping experience that online retailers can't deliver.

  • Pedestrians pass in front of a GameStop store in New York

    GameStop reported better-than-expected profit, helped by sales of new releases such as "Mortal Kombat X" and "Evolve" and an increase in downloads.