PepsiCo Adding to Healthy Options Portfolio With KeVita Acquisition
The trend continues for big beverage companies to purchase smaller companies that manufacture healthier drinks. PepsiCo is no different. Recently, it revealed its intention to buy KeVita. This California-based company makes probiotic drinks and is famous for making kombucha, apple cider vinegar, and other healthy beverages.
KeVita offers nutritious drinks and it is known for its three product lines – Master Brew Kombucha, Apple Cider Vinegar Tonic, and Sparkling Probiotic Drink. These drinks contain live cultures of organic probiotics that can improve the condition of the gut microbiota. Healthy gut microbiota is crucial for stronger immunity and overall health. The company serves not only the health-conscious individuals but also those who follow dietary restrictions like vegans and celiacs (those who consume gluten-free products).
The Benefits Of The KeVita Acquisition
It is not only PepsiCo that has acquired smaller companies that cater to the health niche. Large corporations all over North America have seen the opportunity for mergers and acquisitions. PepsiCo’s acquisition of KeVita will help expand the food giant’s wellness and health offerings and also provide scale to a growing business.
Will this change the natural products offered by KeVita? Bill Moses, KeVita’s CEO, noted that the company is transforming the industry of functional beverages and its acquisition by PepsiCo will still deliver the same products to KeVita’s loyal customers. The company will also be able to continue to operate its bottling facilities independently.
Reasons For Acquisition
Big food companies are always on the lookout for small, innovative businesses that are attracting an untapped market segment. Smaller food companies better understand the needs of millennial consumers, so they are the faster to innovate. Many of these businesses are focused on the quality of higher margin products made from whole food, simple, and organic ingredients. These small businesses tend to have stable followers so that the bigger companies can absorb the clientele of the acquired smaller companies.
Small brands offer a sense of intimacy that larger companies do not have. KeVita, for instance, is popular among its customers as it delivers high-quality probiotics without any compromises. The small size of the group makes it easier to follow the highest standards in making their products. This is in contrast with the situation in most food manufacturer giants.
A Win-Win Situation
Aside from big business getting an advantage with the acquisition, the purchased company can still enjoy many benefits. Bill Moss added that joining the giant food and beverage corporation will give KeVita the opportunity also to reach PepsiCo’s broader audience. PepsiCo has the power to introduce KeVita to the global market. This action can put leverage on both companies regarding their marketing and distribution capacities. The acquisition is a win-win situation for both companies.
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