New York-based coconut water beverage company Vita Coco recently spurned multimillion-dollar
investment proposals from PepsiCo Inc. (NYSE:PEP) and Coca-Cola Co. (NYSE:KO).
While Coke hooked up with competitor Zico Beverages LLC, we naturally suggested Pepsi could look at competitor One Natural Experience, or O.N.E. A day later, Pepsi Bottling Group Inc. (NYSE:PBG) said it
teamed up with private equity firm Catterton Partners and signed a distribution deal with O.N.E. in Southern California and South Florida. PBG and Catterton also made equity investments in the four-year-old beverage company but did not say how much.
The trendy coconut drinks market is gaining clout because of its health benefits and, well, its "cool factor." After all, Halle Berry drinks the stuff. In August, PepsiCo said it would
acquire Amacoco Nordeste Ltda. and Amacoco Sudeste Ltda., Brazil's largest coconut water company. Pepsi has committed
billions of dollars to the Latin American region.
Rob King, president of PBG North America, said in a statement, "This agreement gives us access to a strong brand with attractive growth potential in the emerging coconut water segment. We look forward to adding it to our lineup in these two markets."
Vita Coco turned down the marketing and distribution power of Pepsi and Coke, instead favoring organic growth, which worked out for other startups like Snapple. But the O.N.E. agreement could make the Los Angeles company a formidable threat.
For Catterton, this isn't the first time its
hooked up with a strategic for a deal, having done so several times in the past six years. Catterton managing partner Scott Dahnke told Dow Jones, "We can make sure [O.N.E. doesn't] get lost in the broad milieu of the corporate structure, and work with them at a very micro level." He did concede, though, that while benefiting from the heft of a big strategic the risk involved with this kind of partnership is that Pepsi could change its priorities.
PBG will begin distribution in the fourth quarter. -
Baz HiralalGo to the storyVita Coco snubs Coke, Pepsi
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