Davis Beverage

Division: Phoenix Capital Resources, Phoenix Management Services


Davis Beverage was a $50 million family-owned Dr. Pepper and 7-Up bottler based in Allentown, PA.


Davis Beverage defaulted on its senior secured credit facility. Its bank was concerned that the downward revenue trend would continue as a result of the Company’s lack of focus and direction. Furthermore, the companies that owned the major beverage brands were similarly concerned with their shrinking market share in Davis’ territory, which was accompanied by steadily shrinking gross margins. The Company was finishing its third straight year of losses.


Phoenix Management Services’ initial assessment concluded that Davis Beverage was pursuing a strategy, proffered by the soft drink brands, to pursue discounted volume. The brands had historically provided the Company with incentives to pursue this strategy but it had resulted in the deteriorated financial condition of Davis. Although the Company had a talented management team, they were misplaced from an organizational perspective. Phoenix realigned the management structure by reorganizing the finance, operations and marketing departments. Phoenix also analyzed and revamped the merchandising strategy to be more competitive against the big brands. Within two months of Phoenix’s involvement, Davis Beverage saw a 30% increase in gross margin and the Company returned to profitability. Finally, Phoenix refinanced Davis Beverage’s debt and the company has been on solid ground ever since.