Soft drink giant Coca-Cola Co. is close to buying a minority stake in U.S. organic juice company Suja Life LLC, as the beverage maker continues to diversify its portfolio to adapt to changing consumer tastes.
Citing people familiar with the deal, Reuters reported last Saturday that Coca-Cola's investment would put Suja's value at $300 million and gives the beverage giant the option to buy out the juice company in three years. The report added that the acquisition allows Coca-Cola to better compete with PepsiCo Inc's Naked Juice brands and improve its position in the cold-pressed juice sector, wherein beverages are made using cold pressure to kill harmful bacteria and preserve nutrients and taste.
The report added that the diversification allows Coca-Cola to bolster its portfolio of healthy drinks as more consumers turn away from carbonated beverages for health reasons.
Industry observer Bevnet reported on its website that there have been speculations about Coca-Cola's interest in the juice maker as early as last year, after Suja CEO Jeff Church appeared as a speaker in the Atlanta-based company's annual meeting for its Venturing and Emerging Brand's group.
The Bevnet report said that Suja will be part of Coca-Cola's juice division and grouped with Odwalla, which was acquired in 2011. It added that pairing those companies together allows Suja to fill up the distribution capacity of the underperforming Odwalla, whose refrigerated system is necessary to deliver the latter's delicate products to stores.
Bevnet said Suja's sales are expected to breach $40 million this year with the brand rapidly growing given its availability in more mainstream channels. It added that the acquisition will likely revitalize Coca-Cola's premium juice business which has been positioned as a premium brand.
Suja is based in San Diego, California and founded in 2012 by entrepreneurs Annie Lawless, Eric Ethans, Jeff Church and James Brennan. It has since attracted investors such as Alliance Consumer Growth Partners and Evolution Media Partners, as well as actors Leonardo DiCaprio, Jared Leto and Sofia Vergara.
