PepsiCo has called it a day for Blue Cloud Distribution and will be getting out of the liquor distribution business. This represents a major victory for the wholesale tier. PepsiCo had leased its IP to Boston Beer to make a Hard Mountain Dew, and also leased some of its other brands such as Lipton Hard Ice Tea.

There were numerous claims thrown at Blue Cloud such as it was crossing tiers and acting as a wholesaler and a manufacturer. They were never a manufacturer so the claim was hyperbole. The other claim is PepsiCo would use slotting fees from its other non-alcoholic products such as Frito-Lays to earn shelf space at the expense of its competitors. This theory was not proven out in the marketplace but used as a justification.

PepsiCo will use the Coke model and focus on licensing brands.

Blue Cloud took on the system and even with PepsiCo’s resources still couldn’t beat the middle tier. They simply run the industry!