Two Birmingham beverage giants have been competing for more than a century – but for the first time, the pair have formed a partnership.
“In viewing the direct marketplace and the emphasis that is coming onto coffee and tea, we have both decided that working together, rather than as competitors, is the best way to push forward,” said William Bowron Jr., Red Diamond President and CEO.
Buffalo Rock has 14 distribution centers in Alabama, Georgia, and the Florida panhandle. It’s one of the largest family-owned Pepsi and Dr. Pepper bottlers in the country and has 2,100 employees. It has started the process of transitioning clients to the new product, a process that will go into next year.
About 30 years ago, Buffalo Rock partnered with Maxwell House, which is owned by Kraft. In March, H.J. Heinz Co. announced it was buying Kraft Food Group, which led James Lee III, CEO of Buffalo Rock, to reevaluate their partnership.
“Long term, we were not sure what the new owners of Kraft had in mind, and quite frankly, we like Red Diamond’s product better,” Lee said. “There’s going to be some operational efficiencies as well, because we can buy directly off their dock, and give our customers the freshest coffee possible.”
Red Diamond was founded in 1906, making it the third-oldest coffee and tea company in the country that has been continually owned by the same family. It is sold via retail and wholesale, and can be found in restaurants, hotels, convenience stores and more. By the end of this year, Red Diamond will sell in all 50 states, Bowron said.
“This is a multi-year approach to our market to increase penetration, and that is the real value of our agreement,” Bowron said. “From our perspective, too, we have many more convenience stores outside the state than inside the state, and we’re trilled to have more inside the state.”