Dr Pepper Soda Company

Distribution Channels

According to Dr Pepper’s official website, their product is being distributed thorough

indirect channel system, meaning that the company works with many wholesalers and

retailers who can help the producer serve customer needs better and at a lower cost.

In their 10k report, the company claims that Dr Pepper soda is currently being sold

“through all major retail channels including supermarkets, fountains, mass

merchandisers, club stores, vending machines, convenience stores, gas stations, small

groceries, drug chains and dollar stores”.

The company serves primarily two groups of customers, bottlers and distributors, as well

as retailers. All their concentrates are manufactured at their plant in St. Louis,

The rest of the concentrate is sold to third party bottling companies who

manufacture the final beverage, bottle and sell it to final consumer. One of these

companies is Coca-Cola Co. who in 2010 agreed to pay $715 mil. for the rights to

distribute Dr Pepper brand soda, as reported by Wall Street Journal. “As part of the deal,

Dr Pepper and Diet Dr Pepper will be the only non-Coke brands distributed on Coke's

new high-tech Freestyle machine, a touch-screen fountain that dispenses more than 100

different flavors. Dr Pepper Snapple values that access at an additional $115 million to

$135 million, sweetening the overall deal value”.(WSJ.NYC.June 08, 2010)

Dr Pepper Snapple company claims to have a strong relationship with Coca-Cola and

PepsiCo and according to their website ”67% of Dr Pepper volumes are distributed

through the Coca-Cola affiliated and PepsiCo affiliated bottler systems”.

The company also makes fountains syrups at their plant and those are sold to fast food

restaurants, movie theaters etc., where they are mixed with water and carbonation and the

finished beverage is sold to final consumers.

Channel Conflict

According to a WSJ article from July 12th, 2011 Dr Pepper is involved in a dispute

sales, it was

recently gaining volume of sales by claiming to be Dr Peppers oldest bottler, as well as

using cane sugar (as in the original recipe) to sweeten the soda, as opposed to less costly

high fructose corn syrup Dr Pepper switched to in 1970s, according to the article. The

Texas bottler also started selling their version of the soda on the internet, together with

memorabilia like t-shirt, mugs etc.

Dr Pepper Snapple says the bottler is breaking the contract they have by selling his

version of the soda online all over United States. The bottler argues that his sugar cane

soda tastes better and it is healthier than high fructose corn syrup.

But “this lawsuit is not about what is in the bottle. It's about what's on the bottle," said

James Baldwin, Dr Pepper Snapple's general counsel.(WSJ July12, 2011) They demand

for the bottler to “remove “Dublin” from its Dr Pepper labels and stop selling the soda

beyond a 44-mile radius around Dublin.

Due to tough economy and an increase in the number of competitors there has been