Ocean Spray (OS) on 12/9/97 announces plan to buy stake in Nantucket Nectars (NN), but declines to specify percentage. Pepsi bottler predicts deal gives OS potential distribution alternative to Pepsi system -- via distributors which handle NN -- "if distribution with Pepsi doesn't pan out." Details. NN co-founders/presidents Tom Scott/Tom First will continue to run NN as separate company. Early NN investor -- former Alamo car rental principal owner Michael Egan -- is selling his interest; Egan holds 50% stake in NN according to published reports. Industry executive close to deal says Egan "is selling his interest and OS is buying an interest, but the two (interests) don't necessarily match." OS executive. Tom Bullock -- CEO of OS -- tells BD: "We're going to form an alliance that allows (NN) to do what they do and do it well. We're not going to change what they do ... We're going to help with efficiencies where we can." Adds: "The brands won't be melded together."

Brands/volume. In BD's multi-channel take-home data for 1st half 1997, OS holds 10.3 share of single-serve juice drink category; ranks 3rd behind Snapple with 14.4 share, Hawaiian Punch with 12.6 share (BD 10/24/97). In 1996 BD/Maxwell data, OS single-serve volume about 40 mil cases. Industry executive says NN volume 3.5 mil to 4 mil cases. NN says sales about $45 mil. NN products move via independent distributors. Entities. Lakeville MA-based OS is marketing cooperative of 900 cranberry and grapefruit growers in US/Canada. NN founded in 1989 in Nantucket by college friends Scott/First. OS/NN say NN products distributed in "30 states and 20 international markets."

Ocean Spray/Pepsi. OS single-serve juice drink products now distributed by Pepsi bottlers. Last summer, Pepsi declines to renew OS distribution agreement (BD 7/18/97). Relationship would have ended 5/98, but Pepsi executive recently says "we have plans to extend OS relationship through 1998" (BD 11/21/97). Then in last week, Pepsi executive confirms talks ongoing with OS re possible long-term remarriage for single-serve distribution. Bullock: "We have resumed discussions with Pepsi."

Nantucket at Pepsi? Asked if NN would be part of distribution deal with Pepsi, Bullock states: "No, it wouldn't. (NN) will be operated separately. OS is not even the sole owner ... It's a separate company that we own a part of, so it's to remain separate. They have their own distribution system that works quite well for them ... They've got a great distribution system." Pepsi bottler. Pepsi bottler states NN distribution remains separate from OS, but adds: "If (OS) deal with Pepsi fell apart, OS may now have access to NN's distribution system."

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