Dive Brief:
- Beverage bottler Refresco has filed a lawsuit against Congo Brands, the owner of Prime, for allegedly backing out of an agreement to produce the hydration drink. Refresco is seeking $67.7 million from Congo Brands, according to a filing in Delaware.
- Prime, a line of hydration and energy drinks co-founded by YouTube stars Logan Paul and KSI, experienced viral success in 2022. The lawsuit claims that part of the agreement between Refresco and Prime involved setting up a production line for plastic bottles at Refresco’s facility in Trusedale, Missouri for a period of three years.
- Refresco argues that Prime team “repudiated” the agreement and informed the bottler that they would be moving away from their facility.
Dive Insight:
Since its launch, Prime has gone from immense hype to facing damaging allegations. The beverage once fetched thousands of dollars when it was scarce. However, it later came under fire for its high caffeine content and allegations of containing “forever chemicals,” which the brand has denied. The lawsuit from Refresco adds to the challenges faced by Prime in the beverage market.
Refresco, a major bottler in the U.S., stated that the agreement with Prime required the trendy beverage company to produce 55.5 million cases of drinks over three years. If Prime failed to purchase 90% of the bottles annually, they would have to pay fees for each case not bought.
The bottler mentioned that the deal with Prime involved significant time and money, including investments in new equipment to produce the custom Prime bottles.
Refresco is seeking $67.7 million in the lawsuit to cover the costs incurred in upgrading its facility.
Furthermore, Refresco highlighted Prime’s declining sales over the past year, attributing it to a decrease in social media attention for the drink. In the U.K., Prime sales dropped by 50% year-over-year in April, according to Nielsen data.