After a year-and-a-half of high tension and muted sales, Bang Energy says it has officially ended its distribution partnership with PepsiCo.
The Florida-based brand, a subsidiary of VPX Pharmaceuticals, announced in a brief press release today that “all disputes with PepsiCo have been fully settled and resolved” effective immediately and that the brand will return to DSD distribution through a number of new partnerships.
“Our primary objective is to effectuate a smooth transition that best serves both Bang Energy’s and PepsiCo’s highly valued retail customers,” Bang Energy CEO Jack Owoc said in the release.
PepsiCo has not yet confirmed the termination of the agreement.
PepsiCo first announced its exclusive distribution partnership with Bang in April 2020 at a time when the brand was reporting triple-digit year-over-year growth and had recently surpassed $1 billion in annual retail sales. The deal was contracted to last through October 2023; however, the relationship soon went sour as Bang’s transition from DSD (including within Anheuser-Busch InBev’s network) to Pepsi’s blue trucks when sales fell off and in October 2020 Owoc began attempting to exit the agreement prematurely.
Bang publicly announced its intention to terminate the agreement in November 2020, citing “multiple issues and concerns regarding PepsiCo’s performance since the parties’ distribution partnership began.” However, PepsiCo sued Bang that month and an arbitrator later ruled that Bang must honor the contract.
Since then, Bang has continued to face slow and, at times, declining sales growth within the PepsiCo system. According to NielsenIQ, the brand’s sales fell 20.5% in the two-week period ending June 4, 2022 and were down 19.5% in the 52-week period on a two-year stack basis. Volume sales in that time fell 23.5% for the two-weeks and were down 24% for the 52-weeks on a two-year stack basis.
Speaking last week at BevNET Live Summer 2022 in New York City, an event hosted by Brewbound’s sister publication, Owoc declined to say that he regretted taking the deal with PepsiCo calling it a “learning experience” and suggesting that he had distributors lined up for when Bang eventually departed.