Pepsi won a significant battle in the cola wars last week by stealing from rival Coke an exclusive multiyear contract with Sumner Redstone’s National Amusements. Coca-Cola had been sole supplier to the Boston-based theater chain since its founding 53 years ago.
National Amusements, the nation’s eighth-largest exhib chain, operates 650 screens at 87 locations in the U.S. and the U.K., drawing an estimated 50 million filmgoers a year.
Pepsi adds the account to a list of entertainment companies that includes General Cinema Corp. – the nation’s fourth-largest exhib chain – Universal Studios, Sea World, Knott’s Berry Farm, Excellence Theaters (Chicago), Marcus Theaters (Milwaukee) and Wometco Theaters (Miami).
Coke, which controls 85% of the industry’s soda pop business, maintains exclusive accounts with most of the largest exhib nets, including United Artists, Cineplex Odeon, American Multi-Cinema, Loews, Carmike,
Cinemark, Hoyts and Act III – the remaining eight of the nation’s top 10 theater chains.
While industrywide figures are not released, entertainment-oriented concession stand sales nationwide for all snack bar items are estimated to run at $13 billion. Soda sales alone, the bulk split by the two bottling giants, account for about 40% of that total, or more than $5 billion annually.
Theater sales account for what a Pepsi source calls “a small but growing part of that. The vast majority of our on-site business is in restaurants, but we’re putting a lot of effort into entertainment and prestige accounts.”
A Pepsi Cola spokesman in Somers, N.Y., said it was “not necessarily a money deal” that displaced Coke.
“National Amusements,” he said, “was looking for a company that could be an innovative, very progressive partner and not just a low-cost supplier.”
The intimation was that Coke was supplanted by Pepsi because Coke was content to be a passive supplier with little or insufficient promotional and merchandising push.
The Pepsi rep suggested that Pepsi replaced Coke at the Excellence, Marcus and Wometco circuits for the same reason.
“We’ve negotiated with both sides, and they both negotiate very hard,” says one theater chain exec whose company recently signed a longterm deal with Coca-Cola. “We took a real long look at Pepsi, before we made our decision, and it wasn’t an easy decision to make.”