First Drop Aftershocks of The Bang Breakup

Florida Man: Better Off Alone?

As with most hot-and-heavy star-crossed celebrity romances that quickly turn into public breakups, there were rumors, shouts, recriminations, lawyers. It’s America, after all, and since our commerce and attention helps build these things, we’re all entitled to our own little piece.

But also, as with many breakups, no matter how painful, the cover line from both parties is a variation on a theme: “It’s all for the best.”

By that I mean the tale of Bang Energy and PepsiCo, a brand and distributor that equalled to be less than the sum of their union almost from the start. Observers will remember that PepsiCo’s brass had such a crush on Jack Owoc’s meteoric energy/fi tness brand that it spent billions to buy out its previous partner, Rockstar Energy Drink, in order to bring Bang onto its trucks.

Sadly, Owoc, the bombastic Florida Man, wasn’t a fan of the way PepsiCo handled his precious cargo and sued to get out of the deal almost as quickly as he’d found it. After an arbitrator ruled against him when he alleged poor performance on the part of the Blue system, Owoc nevertheless has now negotiated his way out of the deal and is returning to the complicated world of independent wholesalers that helped to build the brand in the fi rst place.

Given PepsiCo CEO Ramon Laguarta’s recent earnings call comments that partnered distribution brands had a tiny overall impact on the company’s fi nancial plans, and Owoc’s overall dissatisfaction, one could assume that the breakup is indeed “all for the best.”

I’m not so sure, though.

Like many successful brands, Bang grew via a network of independents. But with regard to the product type it pioneered, the feathers are out of the pillow, and they’re landing everywhere. Competitors like C4, Ghost (aligned with Anheuser-Busch houses), Celsius, Zoa (Molson Coors) and more have similar products and have grabbed Bang’s momentum -- which built, after all, at least partially because of those same independents’ ability to execute. While some independents will undoubtedly carry Owoc’s portfolio – they need the volume – he’s already on the record as saying he’s not the easiest fellow to work with.

Still, Owoc did build the brand in the independent web before moving it to PepsiCo, and maybe it’s clear that the Pepsi system truly had little motivation to “Bring the Bang,” a characteristic he values vociferously. Owoc’s is also not the only brand to back out of a supposedly stronger system and go back to the independents; High Brew Coffee, for example, found itself trapped between the KDP coffee portfolio and that system’s own lack of concern about a relatively small brand before it went back to the independents, where it’s found steadier ground.

History nevertheless shows it’s hard to get bigger by getting smaller. Just ask Evian and Fiji, two pioneering premium water brands that have suffered mightily since they threw over their DSD partners.

Bang was way out in front when it struck a deal with PepsiCo, and now it’s getting reeled back in. Certainly, Owoc is no stranger to overestimating the interest in his products, either within the industry or with consumers.

That’s not the view he expressed back in June, prior to the settlement announcement. During our interview at BevNET Live, Owoc – blingy Bang necklace gleaming, microphone brandishing, voice unmodulated – kept shouting about an industry that was set up to drown him, either by lawsuit or by some nefarious plot.

Given the brashness with which it was delivered, Owoc’s complaint may have come off as tough to swallow. But inside that anger-management worthy madness, there’s a real point: most brands aren’t ready to work in bigger systems, even if they’re at a billion bucks in revenue. Calling the deal off might have been his only way to stop a slow bleed.

Still, I think a little patience might have been better, both for the industry, and for Owoc himself. First, it’s concerning that these large distributors might be even more gun shy now when it comes to identifying other rising companies that might be a better fi t. If you look at Pepsi, it stumbled in both of its energy drink deals, getting cornered into buying one brand so that it could try to build up another. But it’s not just them: at the time of their respective acquisitions by KDP, both Bai and Core Water had become so entrenched in the conglomerate’s network that losing them would have cost real revenue. So maybe Pepsi ultimately didn’t want to fi nd itself over a barrel with Owoc, throwing good money after a bad relationship.

On the other hand, while the ultimate cost of the Bai and Core deals might have left KDP with a bitter taste, it knew what it was buying and had the partnerships in place. Same with PepsiCo and Rockstar: after all, despite the slow fray of their relationship – it took 11 years from when they fi rst signed a distribution agreement until the fi nal sale – it still put nearly $4 billion into its founders’ pockets when the deal fi nally happened.

Did Owoc overplay his hand by suing so early in the process? It’s hard to tell, but it’s certainly in character for him to want to walk and fume, rather than sit still and talk it out. We can only wish him luck as he seeks a bigger Bang.