Shakeup in the Juice World: PepsiCo to Sell Tropicana Among Other Brands
August 5, 2021 PepsiCo, Inc. has entered into an agreement with PAI Partners to sell Tropicana, Naked, and other select juice brands across North America, as well as an irrevocable option to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of approximately $3.3 billion while retaining a 39% non-controlling interest in a newly formed joint venture.
PAI is a leading private equity firm with strong experience in the food and beverage space and will be the majority shareholder of the transferred business with PepsiCo retaining exclusive U.S. distribution rights to the portfolio of brands in its best-in-class, chilled Direct Store Delivery for small-format, and foodservice channels.
The Bradenton, FL-based Tropicana brand, behind its flagship orange juice products, has been a beverage industry leader for more than 70 years.
“This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” says PepsiCo Chairman and CEO Ramon Laguarta. “In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream, which are focused on being better for people and the planet.”
According to PepsiCo, these juice businesses delivered approximately $3 billion in net revenue in 2020 with operating profit margins that were below the company’s overall operating margin in 2020. The transaction is expected to close in late 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals.
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