Coke to distribute Monster Energy drinks

ATLANTA — Coca-Cola Co. and its largest bottler have struck a 20-year deal to distribute the nation's top energy drink in parts of the United States and elsewhere, the companies said Monday.

Coca-Cola and Coca-Cola Enterprises, both of Atlanta, have agreed to distribute California-based Hansen Natural Corp.'s line of Monster Energy drinks in about 20 states, six western Europe countries and in Canada.

Monster is the top U.S. energy drink in terms of volume, followed by Red Bull.

The deal — which includes selling Java Monster and the Lost Energy brands— could add between $20 million to $25 million to CCE's 2009 operating profits, or 3 to 6 cents a share, beverage analyst John Faucher wrote in a research note Monday. It is likely to have "a slightly positive impact on (Coca-Cola) in 2009," wrote Faucher, an analyst for J.P. Morgan.

CCE may "eventually get the opportunity to manufacture Monster," he also wrote.

Hansen was using Dr Pepper Snapple Group, a Plano, Texas-based beverage firm, and a patchwork of other distributors to sell the Monster line in the 20 states that Coca-Cola will now serve.

Coca-Cola and Hansen have been discussing having the Coca-Cola system handle Monster for at least some parts of the United States for about a month, said John Sicher, editor and publisher of Beverage Digest, which tracks the industry.

"The energy drink business has been a strong provider of growth for some years now," Sicher said. "So Coke now gets access to one of the best brands in the category in a large part of the United States."

Coca-Cola and CCE will be selling about half of Hansen's volume of Monster, according to analyst reports. Anheuser-Busch will distribute the other half. The new agreement with Coca-Cola will "complement our existing long-term arrangements with Anheuser-Busch distributors," Rodney Sacks, chairman and chief executive officer of Hansen, said in a statement.

As part of the deal, Hansen can negotiate distribution agreements with other Coca-Cola bottlers that service areas not covered by CCE.

Coca-Cola North American and CCE signed a distribution agreement in 2005 with Rockstar, a Las Vegas-based energy drink company. Rockstar is a distant third in market share behind Monster and Red Bull.

Coca-Cola North America recently ended that agreement, Scott Williamson, a spokesman for Coca-Cola North America, said. "Our agreement with Rockstar was terminated earlier this month by mutual consent of both parties," Williamson said.

But CCE on Friday extended its deal with Rockstar through the end of 2009, CCE said. The deal — which Rockstar can terminate before it expires —covers distribution in the U.S. and Canada.

Coca-Cola also owns Full Throttle, another energy drink. PepsiCo's energy drink lineup includes Amp Energy, SoBe Adrenaline Rush and No Fear.

Kristi E. Swartz writes for The Atlanta Journal-Constitution.