Dublin bottler faces challenge of selling new sodas

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by DAVID SCHECHTER

Bio | Email | Follow: @davidschechter

WFAA

Posted on February 7, 2012 at 11:15 PM

Updated Wednesday, Feb 8 at 12:10 AM

Dublin Bottling Works

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DALLAS — At the Maple and Motor restaurant, you can wash down a giant hamburger with any drink you want... as long as it's not Dr Pepper.

"What is this thing here? This is my new beverage machine," said owner Jack Perkins, pointing to a new cooler filled with a suite of sodas offered by Dublin Bottle Works. All are sweetened with cane sugar.

But customers haven't likely heard of most of the new sodas on offer. "No, probably not," Perkins agreed. "But I guarantee when they taste it, they'll be absolutely amazed."

Maple and Motor is one of Jeff Kloster's new customers. "We believe that there's a great opportunity for us," he said.

Dr Pepper Snapple Group sued Kloster for selling his cane sugar Dublin Dr Pepper far outside his six-county franchise area. To end the dispute, after 121-years of bottling, Kloster sold the rights to his family's franchise back to the company.

Fans of Dublin Dr Pepper backed Kloster, and were livid with the big company, complaining the little guy got squashed.

"It makes you feel great about what you've done," Kloster said.

Judd Bradbury is business professor at the University of Texas at Dallas. Does he think the Dublin company made a tactical mistake?

"I believe that they did," he said.

Bradbury is a former bottling operations consultant for Dr Pepper Snapple Group. He says the Dublin firm should have realized that selling outside their territory hurt other Dr Pepper bottlers.

"When a company like Dublin is selling into other distributors' territories, they're basically taking case sales away from those other distributors. And those are family companies, too," Bradbury explained.

Bottling is a lucrative business, and franchises are highly sought after. In many cases, the business comes to you.

Now that's gone, and Jeff Kloster is hitting the streets, for the first time in his life, trying to build a new brand and cultivate customers — like Maple and Motor.

"I think there are hundreds to come, and that's what we're working on," he said.

But David Lei, a professor at SMU's Cox School of Business, said Dublin Bottle Works has gone overnight from a mature business back to a start-up venture.

"It's certainly a blunder," he said. "It's very hard to see how it can play out in their favor, over the long-term, given the economics of the industry."

But there's no denying that people want the little Dublin bottler to succeed.

"They're good at what they do. This is a great product," restaurant owner Perkins said.

And goodwill could be their new secret ingredient.

In a statement to News 8, Dr Pepper Snapple Group says it wanted Dublin to continue bottling for them — as long as the company followed the terms of its franchise agreement.

Dr Pepper adds that the Klosters did not walk away empty-handed after relinquishing their franchise.

E-mail dschechter@wfaa.com

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