In a widely anticipated
move, The Coca-Cola Co. reached an agreement last month to acquire Energy
Brands Inc., maker of Glacéau Vitaminwater, Smartwater and
Fruitwater products, for $4.1 billion.
“Glacéau has built a great business with
high-quality growth, as well as a strong pipeline of innovative products
and brands,” said Neville Isdell, chairman and chief executive
officer of The Coca-Cola Co., in a statement. “We envision even
faster growth for Glacéau as part of Coca-Cola’s enhanced
range of brands for North American customers and consumers. We will manage
this opportunity in a way that delivers attractive returns for our
shareowners and also appropriately benefits our system.”
Glacéau will operate as a separate business
unit within Coca-Cola North America, which Coca-Cola says will allow it to
continue to maximize its focus, speed, sales and execution capabilities,
while leveraging the scale of CCNA’s resources in supply chain,
marketing and consumer insights, customer management and foodservice.
Glacéau’s management team, including J.
Darius Bikoff, Mike Repole and Mike Venuti, intend to lead the business for
a minimum of three years. The transaction is expected to close this summer.
“Overall we believe this acquisition is positive
and indicates [Coca-Cola’s] increasing willingness to acquire growth
and innovation,” said Wall Street Analyst Bonnie Herzog in a report
about the acquisition.
Pepsi invests in Ukraine juice company
PepsiAmericas Inc., Minneapolis, and PepsiCo, Purchase, N.Y., will jointly acquire 80 percent of Sandora LLC, the
leading juice company in Ukraine, for $542 million plus assumed debt. The
companies say Ukraine is one of the fastest-growing beverage markets in
Europe, and Sandora’s brands represent approximately half of the
juice volume consumed in Ukraine. The company operates two production
facilities located in Nikolaev.
In a statement announcing the acquisition, Robert C.
Pohlad, chairman and chief executive officer of PepsiAmericas, said Sandora
“provides immediate scale in a high-growth market and a strong
business platform to leverage and expand into other categories.
Ukraine’s emerging economy and beverage market, coupled with
Sandora’s strong brands and distribution capabilities, provide
significant growth potential.”
The transaction is expected to close in the third
quarter of 2007. PepsiAmericas will consolidate the joint venture into its
financial results, while PepsiCo will recognize the earnings of the joint
venture as equity income in PepsiCo International’s line of business.
Sunny D sells plants
Sunny Delight Beverages
Co. has sold three of its bottling facilities to Angelo, Gordon &
Co.’s Net Lease Group. The plants are located in Anaheim, Calif.,
Dayton, N.J., and Atlanta, and will operate on a lease-back basis.
According to Bill Schumacher, Chief Financial Officer for Sunny Delight,
“Our goal in this transaction was to free up valuable capital that we
could use to grow our business. We are aggressively pursuing several
significant new product launches and major investments in new packaging
capability that will be much more affordable now that we have completed
Coca-Cola makes water-reduction pledge
The Coca-Cola Co. announced a new water resources initiative, pledging to
lead its global beverage operations, including those of its franchise bottlers, to replace the water it uses in its
beverages and their production. The company announced the plans at the
annual meeting of the World Wildlife Fund (WWF) in Beijing. It also
launched a partnership with WWF to provide $20 million to help conserve
“We are focusing on
water because this is where The Coca-Cola Co. can have a real and positive
impact,” said Neville Isdell, chairman and chief executive officer at
Coca-Cola, at the event. “Our goal is to replace every drop of water
we use in our beverages and their production. For us that means reducing
the amount of water used to produce our beverages, recycling water used for
manufacturing processes so it can be returned safely to the environment,
and replenishing water in communities and nature through locally relevant
According to Coca-Cola, the company and its franchised
bottlers used approximately 290 billion liters of water for beverage
production in 2006. Of that amount, approximately 114 billion liters went
into beverages, while 176 billion liters were used in beverage
manufacturing processes such as rinsing, cleaning, heating and cooling.
FTC says kids not seeing more food advertising
The Federal Trade
Commission (FTC) released a report early this
month that indicates kids today are not exposed to more food ads than they
were in 1977, but the ads they do see are concentrated on children’s
programming as opposed to general audience programming.
The report is a bit of a good-news/bad-news situation
for beverage and food marketers who have been criticized for targeting
children. The research was designed to measure not only the number of ads
aired during the time period, but also the size of the viewing audience.
According to the report, in 2004 promotions for
television programming accounted for 28 percent of all TV ads viewed by
children ages two to 11. Food ads accounted for 22 percent. Other
categories included screen and audio entertainment and games, toys and
Children get approximately half of their food
advertising and about one-third of their total television advertising
exposure from programs in which children are at least 50 percent of the
audience. That compares to 1977, when children were exposed to a quarter of
their advertising during children’s programming. The actual number of
food ads children saw dropped from about 6,000 in 1977 to about 5,500 in
Other findings show that kids in 2004 were exposed to:
• 25,600 total television ads (18,300 were paid ads. Most
of the remaining 7,300 were promo- tions for other television
programming; some were public service announcements.)
• 10,700 minutes of televisions ads
• Ads averaging 25 seconds in length
• Two and a quarter hours of ad-
television a day, or 16 hours per week (Ad-supported television
accounted for only 70 percent of their
• More than 50 percent of the ads between 4 p.m. and
midnight and less than 5 percent of the ads during Saturday morning
between 8 a.m. and noon.
The report was based on
analysis of Nielsen Media Research/Nielsen Monitor-Plus data. The FTC also
is conducting a study on all methods of marketing foods and beverages to
children and adolescents, including television, radio, print, movie
theaters, videos and video games, company-sponsored Internet sites, other
Internet advertising, digital advertising, in-store advertising and
promotions, and other types of grassroots marketing. The FTC and the
Department of Health and Human Services plan to host a Forum on Marketplace
Responses to Childhood Obesity next month. The forum will review
industrywide initiatives and specific product, packaging, and marketing
innovations implemented by individual companies.
I want to hear from you. Tell me how we can improve.
Beverage Industry’s December issue highlights five beverages brands that are “shooting for the moon” in terms of innovation. Also in this issue, we spotlight the premiumization of the private-label beverage market, the latest trends impacting the use of tea ingredients in beverages, the growth of beverage sales in the eCommerce platform, and much more!