When words like “pathetic,” “feckless” and “sub-mediocrity” start getting tossed around, one can assume the spark is well and truly gone.
That’s how Bang CEO Jack Owoc summed up the current relationship between his energy drink brand and PepsiCo in an interview with Beverage Digest following the announcement last month that Bang was unilaterally exiting the distribution agreement only a few months after the contract was signed.
Since making the announcement, speculation has swirled around the status of the agreement and the future of the brand. In a statement last month, PepsiCo claimed it will remain the exclusive distributor of Bang Energy drinks in the U.S. through October 2023. Meanwhile, there has been suggestion that the termination may be “a precursor to a partnership with another beverage company,” potentially in beer, according to Nik Modi of RBC Capital Markets.
Yet for his part, Bang’s CEO, in typically outspoken fashion, declared in no uncertain terms that the divorce between the two parties is complete.
“Termination of Bang Energy’s exclusive distribution agreement was and is effective immediately on the effective date thereon over one month ago,” he told Beverage Digest in an interview shared by Credit Suisse today.
As Owoc pointed out in the interview, at the time it was announced, Bang’s distribution pact with Pepsi gave the food and beverage giant one of the hottest names in a rapidly expanding energy drink category. Yet under the “fruitless and feckless” distribution system the brand has “only experienced negative category growth” and erosion of share, he said.
Owoc repeated charges made in a lawsuit against Pepsi last month, alleging that the distribution resorted to “intimidation tactics” against independent distributors and retailers such as Walmart.
In response to a question about whether Bang canceled an incentive program that would have awarded bonuses to sales associates during the initial Pepsi launch, Owoc gave a rambling response in which he declared he had “no idea” about such a program and then suggested through rhetorical questions that the targets needed to activate any alleged bonuses had not been met. In addition to promising to possess “hundreds of pieces of photographic evidence” showing Pepsi reps placing “health-robbing Pepsi products” into Bang coolers, the CEO wrote of Pepsi’s “art of misdirection” (a scheme “reminiscent of John Travolta in ‘Swordfish,’” he added, referencing the 2001 thriller) in gaining exclusive distribution of Bang in order to “block and control” the company and therefore revive Rockstar, which it purchased for $4.5 billion prior to signing with Bang.
“Pepsi thinks that just because we signed a contract with them that they have the right to destroy Bang — one of the greatest brands and American success stories of all time,” he declared.
Calling out Pepsi CEO Kirk Tanner and CFO Hugh Johnston by name, Owoc called them “professional data spin masters” whom he boasted to have sent an email calling them “pathetic” and “habitually in the stench of sub mediocrity.”
However, Owoc offered only scant details on what happens next for the brand. The Pepsi deal was exclusively for Bang products, while VPX’s other allied brands — such as Redline and NOO Fusion — continued to move through the company’s network of independent distribution partners. According to Owoc, VPX has been enhancing its company-owned DSD network, going from four facilities in 2019 to seven new distribution centers in 11 states this year.
As news has spread of its separation from Pepsi, Bang has been fielding interest from “100s” of distributors looking to fill the gap, he said, adding that the process of assembling a world class distribution system “will not take very long.” When asked if distribution has begun to move outside of PepsiCo, Owoc declared the inquiry “an insult to our business acumen and intelligence” and “a bad question.”
“If you think we were foolish enough to put all our trust in Pepsi without having a backup plan, you’ve simply may have lost your mind!” he wrote.