- PepsiCo had bought Tropicana for roughly US$3.3 billion in 1998. It also had acquired Naked Juice for US$150 million about a decade ago.
- The company plans to use the funds to build a health-focused portfolio of snacks and beverages.
- PepsiCo’s close rival Coca-Cola Co (NYSE: KO) also streamlines its product range to include more health-focused products.
PepsiCo Inc (NASDAQ: PEP) on Tuesday announced plans to sell its juice brands like Tropicana to the French company PAI Partners for US$3.3 billion. The move is part of its plan to shift from high-sugar drinks to health-focused snacks and beverages.
The company had bought Tropicana for around US$3.3 billion in 1998. It also had acquired Naked Juice for US$150 million about a decade ago. However, PepsiCo will hold a 39% stake in Naked Juice and distribution rights for the other brands in the US market.
The company will utilize the funds to build a portfolio of health-focused food like snacks and zero-calorie beverages, Reuters quoted CEO Ramon Laguarta as saying.
The New York-headquartered company is expected to focus more on profitable brands.
PepsiCo’s close rival Coca-Cola Co (NYSE: KO) also streamlines its product range to include more health-focused products. It has already discontinued TaB diet soda and some energy brands in the US and introduced the ZICO coconut water brand.
In Q1 of 2021, the snacks and beverage maker had posted a 6.8% net revenue growth YoY to US$14.82 billion. In the year-ago quarter, it was US$13.88 billion.
Its organic revenue jumped 2.4% YoY during the period.
Some of its brands include Tropicana, Aquafina, Gatorade, 7 Up, and Doritos.
It generated US$5.07 billion in revenue from the North American beverages segment in the quarter, up from US$4.84 billion.
Its GAAP EPS rose by 29% to US$1.24 against 96 cents in the corresponding period of 2020.
PepsiCo’s net income increased from US$1.34 billion to US$1.71 billion in the first quarter.
The PepsiCo (NASDAQ: PEP) stock was priced at US$156.775, up 0.29% from the previous close at 10:05 am ET on Tuesday.
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