Bodyarmor has been one of DPSGs allied brands since 2013

Bodyarmor has been one of DPSG's allied brands since 2013

Dr Pepper Snapple Group (DPSG) has said that its partner brands portfolio will become much larger over the next decade. 

The so-called "allied" brands include Vita Coco as well as Bai and Bodyarmor - in which DPSG holds minority stakes. DPSG CFO Marty Ellen told analysts on a conference call following the company's full year results yesterday that the company's allied brands portfolio "might be different ten years from now, in terms of what's in there today, but I guarantee you, it will be a lot bigger". 

Company CEO Larry Young said the brands allow the company to use its large scale distribution network to participate in emerging growth categories "where we don't currently have a brand presence". 

"They are a very important part of our strategy," added Ellen. 

Although analysts were encouraged by the growth from allied brands, they pointed out that there is a risk of them being acquired by competitors. 

Bodyarmor co-founder Mike Repole also co-founded Vitaminwater, which was acquired by The Coca-Cola Co in 2007, while fellow co-founder Lance Collins created Fuze Beverage and Nos Energy, both of which were also acquired by Coca-Cola in the same year.

Wells Fargo analyst Bonnie Herzog said in a note: "While we are encouraged by the success of this platform, and DPSG's ability to leverage its distribution system to drive growth in allied brands, we acknowledge that there is a distinct risk that one of these brands may be acquired by Coca-Cola or PepsiCo, which would remove a significant contributor to DPSG's recent growth." Herzog also acknowledged that DPSG is well-positioned to replace any lost brands.