SUPPLY SIDE: Soft drinks companies invest in healthier beverages, Black Friday success at Walmart

PepsiCo to Acquire KeVita
for About $200 million 
PepsiCo will acquire sparkling probiotic drink maker KeVita, in a deal reported to total about $200 million. Pepsi has held a minority stake in KeVita since 2013 and recently announced plans to fully acquire the beverage maker in an effort to tap growing consumer demand for healthier drinks.

KeVita will help PepsiCo diversify its product portfolio to include a line of low calorie drinks, sweetened with stevia. Pepsi pledged that by 2025 at least 60% of its products will have fewer than 100 calories per 12-ounce serving. Kevita has 27 products that meet that criteria.

The beverage giant said KeVita will operate independently, keeping production and bottling operations in Oxnard, Calif.

Bill Moses and Chakra Earthsong, KeVita founders, will remain on staff as the brand’s key ambassadors.

“Joining the PepsiCo family will give us an opportunity to extend KeVita’s trend-forward beverages to a broader audience, while staying committed to our core values,” Moses said in a statement. “We’re looking forward to more consumers experiencing the KeVita brand and to leveraging PepsiCo’s marketing and distribution capabilities.”

KeVita will operate as a subsidiary under the PepsiCo Premium Nutrition business that includes PepsiCo’s juice business. 

Dr Pepper Snapple Group to
Acquire Bai Brands for $1.7 Billion
Dr Pepper Snapple Group’s $1.7 billion acquisition of Bai Brands makes a “tremendous amount of sense for us,” said Larry Young, president and CEO, “particularly at a time when consumers are increasingly shunning traditional soft drinks in favor of better-for-you beverages.”

Princeton, N.J.-based Bai Brands, which makes a range of enhanced waters, has had a distribution relationship with Dr Pepper Snapple Group since 2013. On Nov. 22, Dr Pepper Snapple announced the cash deal, which will include a tax benefit for Dr Pepper Snapple of approximately $400 million from the transaction.

“First and foremost, it solidifies our position in the enhanced water category with the fastest-growing premium brand and also provides us with attractive growth and investment returns,” Young said during a conference call with investment analysts to discuss the acquisition.

This deal is expected to add approximately $132 million in incremental net sales and $43 million in incremental income from operations to Dr Pepper Snapple Group’s 2017 estimates, said Marty Ellen, chief financial officer.  

The transaction is expected to close in the first quarter of 2017, and the Bai business will continue to be led by founder Ben Weiss.

Walmart Reports
Black Friday Success
Walmart U.S. Chief Merchandising Officer Steve Bratspies shared the following comments about how the company delivered on its Black Friday plans for its customers.

“This Black Friday, we promised customers great deals, more availability of those items, an integrated offering with Walmart.com and the simple shopping experience our customers have come to expect from Walmart,” Bratspies said. “I am proud to say that we’ve delivered on all fronts.

“Our customers were particularly excited about the new technologies we offered this year. In addition to picking up Black Friday favorites like televisions and toys, they flocked to our stores for drones, virtual reality products and hoverboards,” Bratspies added.