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PepsiCo Adding to Healthy Options Portfolio With KeVita Acquisition

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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.

Inspired by www.foodbusinessnews.net

Guilt-Free Products Account for 45% of PepsiCo’s Portfolio

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Americans love to eat unhealthy snacks. In fact, the US snack food industry is one of the largest in the world. With many food manufacturers jumping on the health bandwagon, PepsiCo is not an exception. Over the past few years, the company has geared to producing healthier and guilt-free snack products for their health-conscious consumers.

Pepsico’s Chief Executive Officer, Indra Nooyi, noted that most of the sales of the company come from its carbonated drinks. With the reshaping of its portfolio, the company is planning to release more products that use natural and healthy ingredients like fruits, grains, vegetables, and proteins. They also plan on releasing other beverages like water and unsweetened tea to give variation to their consumers.

The company’s plan to sell guilt-free food products will result in changing their entire product line up. In fact, the company noted that the health and wellness focused products account for 45% of the company’s revenue.

 

The Shift to Healthier Options

PepsiCo sees the need to change their products after being criticized for producing beverages that can contribute to obesity, type 2 diabetes, heart diseases, and other metabolic syndromes. Moreover, most consumers today have shifted to healthy lifestyle thus opting for beverages that are made from natural ingredients. With the rising obesity rates in the United States, the company also wants to contribute to solving the problem by releasing drinks that have fewer calorie counts than usual.

 

Benefits for PepsiCo

PepsiCo has always relied on their fizzy drinks to drive their sales up. But since most of the consumers have shifted their attention to healthier beverages, the decision of the company to create guilt-free products has paid off.

The growth of the company by promoting nutritious and guilt-free food products now accounts for 45% of the revenue portfolio of the company. And with the high demand from consumers for healthy products, it is expected that the corporation’s return on investment will grow as more market trends take shape. This trend does benefit not only PepsiCo but also other food manufacturers. Companies are doing their best to focus on health and wellness products as consumers continue to connect food to their health.

With the high demand for healthy snacks and foods, it is no wonder why PepsiCo and other food companies have started producing their guilt-free products. What will PepsiCo do next to stay ahead of the curve?

Inspired by marketwatch.com