Dive Brief:
- Beverage bottler Refresco filed a lawsuit against Congo Brands, owner of Prime, alleging Congo backed out of an agreement to produce the hydration drink. Refresco seeks $67.7 million from the beverage company, according to a filing in Delaware.
- Prime — a line of hydration and energy drinks founded by YouTube stars Logan Paul and KSI — launched to viral success in 2022. In the lawsuit, Refresco claims part of its agreement with Prime involved establishing a production line for plastic bottles at the bottler’s facility in Trusedale, Missouri for three years.
- Refresco argued the Prime team “repudiated” the agreement and and told the bottler it would be moving away from their facility.
Dive Insight:
Since its debut, Prime has gone from unprecedented hype to damaging allegations. At one point bottles of the beverage were selling for thousands of dollars when they were harder to obtain. It then faced controversy because of its high caffeine content and allegations the drinks contain “forever chemicals,” the latter of which the brand has denied. The Refresco lawsuit furthers its embattled tenure in the beverage category.
Refresco, one of the largest bottlers in the U.S., said the agreement with Prime stated the trendy beverage company would produce 55.5 million cases of Prime’s drinks over a three year period. If the beverage brand failed to purchase 90% of the bottles each year, according to the lawsuit, it would have to pay fees for every case it did not buy.
The bottler said its Prime deal required “considerable time and money,” with a high investment into altering its manufacturing line with new equipment to make the custom Prime bottles.
“Defendants and Refresco also knew that during the extended period of time during which the new equipment was being fabricated, shipped and installed, the Dedicated Line would be rendered useless to Refresco because it could not be used to produce products for any other customers,” the lawsuit claimed. “What is more, because dedicated customer volumes are usually secured a year in advance, Refresco would not quickly or easily be able to fill any capacity that Prime promised to take but did not take.”
The bottler said the $67.7 million would help it recoup the fees it took on to upgrade its facility.
In the lawsuit, Refresco also pointed to Prime’s sales declining over the past year, which it attributed to “fading social media buzz” for the drink. In the U.K., sales of Prime declined 50% year-over-year in April of this year, according to Nielsen data cited by Yahoo.
