Bang Energy’s explosive fall-out with PepsiCo throws spotlight on coffee versus energy

There’s a certain lop-sidedness to the announcement of distribution deals. When signed, they’re accompanied by bold statements and fulsome praise. Less fanfare is produced for their termination, a process that often takes place quietly and behind closed doors.

PepsiCo signed a US distribution agreement with Bang Energy only seven months ago

PepsiCo signed a US distribution agreement with Bang Energy only seven months ago

Which makes the statement yesterday from Vital Pharmaceuticals (VPX), the owner of Bang Energy drinks, all the more interesting. In a terse yet strongly-worded press release that announced the end of their US distribution partnership, Bang Energy owner Jack Owoc accused PepsiCo of abject underperformance[1]. PepsiCo[2] had only been distributing Bang for six months, but, according to Owoc, this was the end of the line.

“PepsiCo, you’re fired,” Owoc said, possibly channelling another businessman famed for his distaste for bad deals.

Exact details on why Bang Energy, which makes a range of zero-sugar, high-caffeine drinks, turned sour on PepsiCo after such a short time were not forthcoming. Sure enough, neither of the companies responded to requests for further comment. However, the falling apart of this relationship – which seemed beneficial for both sides when announced in April[3] – may point to wider trends within energy drinks.

As with most things today, the trends are connected to the coronavirus, and specifically where consumers will choose to get their caffeine hit going forward – through energy drinks or coffee.

The answer to that question is unclear, as it involves a number of moving parts. The pandemic has closed coffee shops all over the world, hammering out-of-home consumption. At the same time, traditional energy drinks channels such as convenience stores have also been massively disrupted. Meanwhile, there’s the question of whether the on-the-go appeal of energy drinks will dissipate as consumers spend more time at home with access to relatively cheaper coffee options. 

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