Sunny Delight shines focus on Kraft brands

By Neil Merrett

- Last updated on GMT

Related tags Soft drink

Juice maker Sunny Delight hopes to profit from Kraft's latest
restructuring drive with the acquisition of the food giant's
fruit-based soft drink and vitamin water brands in the US.

Through the deal, announced this week, Sunny Delight will now be responsible for the production of the Fruit20 water and Veryfine juice brands as it moves towards a more nutritious beverage portfolio.

Despite the sale by Kraft, fruit based beverages continue to be one of the fastest growing segments in the soft drink market, as once dominant carbonated brands undergo sales declines amidst increasing consumer concerns over health and well being.

Sunny Delight's chief executive officer Billy Cyr therefore said that the deal was an important step in targeting the growing number of health-conscious consumers in the soft drinks market.

"This acquisition will further accelerate our growth and continue our commitment to bring more wholesome beverage choices to consumers, " he stated.

"Fruit20 is the leading zero calorie fruit flavoured water, and Veryfine has been providing high quality beverages since 1865."

Along with the brands themselves, Sunny Delight will also take control of the Veryfine plant situated in Littleton and Kraft's state-of-the-art packing line in Fresno, California.

About 200 workers employed at the sites will also be transferred to Sunny Delight under the terms of the sale.

Fruit20 comes in a number of varieties ranging from no-sugar, no-calorie waters with fruit flavouring to vitamin enriched bottled waters.

Veryfine's brands include 100 per cent fruit juices, which are available in a number of flavours.

While praising the strength of the two products, Kraft said that it had chosen to divest them as part of its attempts to streamline its operations globally by focusing on what it claims are the core brands driving its growth.

However, Kraft's departure from fruit juice and functional waters comes at a time when many leading beverage groups in the US are conversely expanding their presence in these markets.

In June Coca-Cola announced the $4.1bn (€3.05bn) acquisition of the Glacéau brand in an attempt to strengthen its position in the market for health-based bottled water products like vitaminwater.

Coca-Cola and Sunny Delight's shift towards healthier beverage portfolios could well prove prudent, if they wish to dominate the increasingly congested North American soft drinks market.

During its latest first quarter results, sales of Coca-Cola's traditional carbonated beverages within the US alone dropped three per cent.

The company attributed the decline to changing consumer tastes for more health-focused products like juices and functional waters.

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