Beverage Makers Find Themselves at War with Retailers during Recession

Last month rival soft-drink maker PepsiCo Inc and brewer Anheuser-Busch InBev agreed to purchase goods and services together, from computers to travel. The deal prompted the industry to question whether there would be greater collaboration between the two companies.

Photo: Beverage Makers Find Themselves at War with Retailers during Recession

For beverage executives at Coca-Cola Co headquarters, mixing beer and soda is still not a good idea at the consumer level, but could offer back-office savings.

Mexican brewer and bottler Femsa has also been in talks about a possible sale of its beer business, putting more scrutiny on the partnership between bubbly alcoholic and nonalcoholic drinks, Reuters reports.

Meanwhile, the public squabble between one of the nation's largest wholesale club operators and the world's largest soft drink maker is likely to fizzle quickly. But it reveals real tensions as retailers and product makers square off on prices.

As shoppers continue to grapple with the recession, retailers want to win their favor by giving them low prices. But that has been creating tension between product makers like Coca-Cola Co., who are working hard to maintain profit margins while meeting retailer demands.

Typically such negotiations take place behind the scenes, but once in awhile, a public dispute erupts.

"Beneath this surface of harmony, it's a dogfight out there," Gerry Khermouch, editor of Beverage Business Insights, said Tuesday at an investor meeting held by the soft drink maker at its hometown of Atlanta, The Associated Press reports.

It was also reported, Coca-Cola Co unveiled a common packaging design for several of its juice brands on Tuesday, in an effort to cut costs and create consistency.

Juice brands including Minute Maid, Del Valle, Andina and Cappy will be included in the new packaging design, Coke said.

The new labels reflect the logo and color scheme of the Minute Maid brand, the biggest of the soft drink maker's juice brands.

Having one design will allow the company to introduce new packages quickly and efficiently, it said, Reuters reports.