PepsiCo Brazil acquisition to make it coconut water leader

By Lorraine Heller

- Last updated on GMT

Related tags Coconut water Coffee Drink Pepsico

Beverage giant PepsiCo is to acquire Brazil’s leading coconut water company, as part of a bid to transform its beverage portfolio towards more healthful products.

Coconut water, which contains calcium, magnesium and potassium, is popular amongst Brazilian consumers as a hydrating drink, particularly for those leading active lifestyles.

The country’s top-selling coconut water brands, Kero Coco and Trop Coco, are produced by Amacoco Nordeste and Amacoco Sudeste, which PepsiCo yesterday announced it has agreed to acquire for an undisclosed amount.

"Amacoco will complement our current business and enhance our growth prospects throughout Latin America and beyond. Even in the nascent US market, coconut water sales are enjoying extraordinary growth,”​ said Massimo d'Amore, chief executive officer of PepsiCo Americas Beverages (PAB).

Move to health

PepsiCo said coconut water is “naturally healthy”.​ It “represents one of the fastest growing beverage categories due to its natural hydrating qualities, great taste and nutritional benefits,”​ it said.

The move comes as part of wider actions by soda industry leaders to diversify into healthier product categories as consumer preferences shift towards alternatives such as energy drinks, functional waters and juices.

Both PepsiCo and its major rival Coca-Cola have been buying up beverage companies, particularly in the US, as they seek to garner some of this shifting market share.

Recent PepsiCo acquisitions include US-based healthy juice company Naked Juice, UK-based functional waters firm V Water, Russian juice company Lebedyansky, and juice maker Sandora in the Ukraine.

Latin American growth

The current agreement to purchase Amacoco, which is still subject to approval by Brazil's regulatory authority, includes two manufacturing facilities in Petrolina and Sao Mateus. It also includes contracts to assure a supply of coconut water from partners in coconut planting and harvesting.

Over the last year, PepsiCo has said it plans to invest more than $3.3bn in Latin America over the next several years, according to Luis Montoya, president, Latin America Beverages, a division of PAB.

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