PepsiCo to sell Tropicana, other juices, in $3.3B deal
PepsiCo will sell Tropicana and other juices to a private equity firm in a $3.3 billion deal. The New York drink and snack company will keep a 39% non-controlling stake in a newly formed joint venture in the deal with PAI Partners.
The sale reflects the industry's uncertainty about demand for fruit juice as consumers look for healthier options with less sugar, said Howard Telford, head of soft drinks at Euromonitor International, a market research firm. “This deal reflects the desire of the industry to focus and innovate around a smaller core of categories and brands, including water, energy drinks, coffee and the staple carbonated soft drinks," Telford said.
Juice consumption in the U.S. peaked in 2003 at 4.2 billion gallons, but by 2017, that had fallen to 3 billion gallons, wrote Brian Sudano, the managing partner of Beverage Marketing Corp. The group does not see that trend changing.
Pepsi rival Coca-Cola Co. has also been shedding slow-selling brands, including Odwalla and Zico juices, over the last year so it can focus on stronger performers. But Coke is holding on to its Minute Maid and Simply juice brands for now.
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