Red Bull Gives Evian Wheels

By Max Rothman

Red Bull trucks will stock evian water. Could other brands soon be on the way?

Distribution news has leaked from the secret chambers of Red Bull, where Felix Baumgartner presumably tests caffeinated gerbils that leap from toy spacecrafts through simulations of the mesosphere.

Danone Waters of America (DWA), the makers of evian spring water, announced last week that it will test a distribution partnership with Red Bull Distribution Company (RBDC). The test will focus on small format channels such as convenience, drug, select food service and specialty retail stores in southern California and central/southern Florida, two of evian’s key markets.

“The partnership will leverage complementary brand strengths to enhance merchandising and promotion opportunities on a store by store basis,” Michael Neuwirth, spokesman for DWA, said in a release.

Ken Sadowsky, a former beverage distributor who is now a senior beverage advisor at Verlinvest, an investment holding company, said that this partnership represents a departure from Red Bull’s consistent, proprietary route to the marketplace.

“This is outside of the box,” Sadowsky said. “It’s an admission that they’ve got a distribution system that has opportunities to fill the trucks.”

Since 1987, when he launched the non-alcoholic division for Atlas Distributing, Inc., Sadowsky said that he’d never heard of another brand joining Red Bull on its trucks until last week.

He distributed evian for about four years in the early 90s. Atlas still distributes Red Bull, which Sadowsky secured in the late 90s. The two never overlapped during his time there, however, he understands both companies well. He said that he’s always admired Red Bull for its anti-bureaucratic stance and its flexibility. He imagines that once the company gets the OK from CEO Stefan Kozak, it promptly moves along with its plans.

“One of the reasons I respect Red Bull is that they’re nimble,” Sadowsky said.

As a student of the industry, Sadowsky is fascinated by the news. Entrepreneurs regularly study their distribution options, which have traditionally included the scrappy, little guys or trucks of three colors — red for Coca-Cola, blue for Pepsi, white for Dr Pepper Snapple Group. In major U.S. markets, you could now add Red Bull to that list.

This is the case, Sadowsky said, because if the test with evian goes well, he could envision Red Bull as an alternative path to the market for proven, scalable brands. While it’s no sure thing, he thinks the company could take on other, complementary brands rather quickly.

“They’ve got a very efficient and effective distribution system in the markets where they self distribute that I’ve seen,” he said.

The partnership with Red Bull represents evian’s first news following the announcement that it will end distribution with Coke on July 3, 2014 and restructure its distribution network.

Source: Beverages