Pepsi Gets 2nd Contract From Disney
Fighting to overcome Coca-Cola Co.’s widening lead, PepsiCo inked its second contract in as many months with Walt Disney Co., agreeing Tuesday to become the exclusive supplier for several new Disney entertainment ventures.
Pepsi-made beverages will be the sole soft drinks poured at Club Disney children’s play sites, DisneyQuest interactive entertainment centers and ESPN Zone restaurants.
The new contract, described only as “a multiyear deal,” is not expected to increase the sales of Pepsi, Diet Pepsi and Slice right away. But analysts said the deal’s value will be in linking Pepsi products to Disney’s marketing muscle, adding a new dimension to the cola maker’s efforts to gain ground on Coca-Cola.
“These are marketing-driven transactions,” said John Sicher, editor of Beverage Digest, a trade publication. “It’s significant in the sense that these Disney properties are likely to be increasingly valuable as time goes on and it presents a positive marketing experience for Pepsi.”
Indeed, Disney Regional Entertainment plans to expand the three concepts nationally, opening more than 100 locations over the next five years.
New York-based Pepsi, which spun off its $11-billion restaurant division last year, is bidding for the rights to sell soft drinks in popular sports venues and restaurants.
Last month, Disney broke a 43-year exclusive partnership with Coke, awarding Pepsi a contract as the sole supplier at Edison International Field of Anaheim, home of the Disney-owned Anaheim Angels.
Pepsi also has soft-drink contracts with the Los Angeles Kings and Los Angeles Lakers at the Great Western Forum, Universal studios and the California Speedway in Fontana.
But Coke, the world’s largest soft drink maker, still is sole supplier to Disney’s parks. It also holds the contract at the Anaheim Mighty Ducks’ at the Arrowhead Pond, a Disney-owned franchise.
Coke widened its domestic lead over Pepsi in the $53-billion soft-drink market by nearly 1% last year, according to a survey by Beverage Digest and Davenport & Co. Overall, the poll placed Coke ahead of Pepsi by 12.1%, the biggest lead registered by the Atlanta-based company in more than 20 years.
But Coke has backed away from some agreements, including the one that Pepsi announced Tuesday, believing that the costs outweighed the return.
“In this case, what we [would have] got out of it didn’t justify the investment,” said Coke spokesman Scott Jacobson.
Disney also announced that its first DisneyQuest will open in this summer in Orlando and another next year in Chicago.
