PepsiCo sells Tropicana, Naked following decades of juice sales decline

The $3.3 billion transaction will see PAI Partners become a majority shareholder.

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Not even a pandemic was able to give orange juice back its lustre.

The struggling beverage was given a sales boost in 2020 (reaching levels not seen since 2010), with more people looking to increase their vitamin C intake for a healthy immune system. However, that isn’t stopping PepsiCo from entering an agreement with a private equity firm to purchase its Topicana, Naked and other juice brands across North America.

The transaction, valued at approximately $3.3 billion and expected to close in late 2021 or early 2022, was announced on Tuesday with PAI Partners becoming the majority shareholder of the juice business, while PepsiCo retains a 39% non-controlling interest in a newly formed joint venture.

The New York-based CPG will also keep distribution rights for the brands within the small-format and foodservice channels in the U.S., according to a release announcing the sale yesterday afternoon.

PepsiCo Chairman and CEO Ramon Laguarta said the deal will free the company up to concentrate on the remainder of its portfolio of “healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet.”

The company’s refocus on “healthier” brands comes as the juice category spent the last couple decades struggling at retail, with North Americans falling out of love with the beverage for a variety of reasons – from its high sugar content, to rising prices, to a decline in breakfast occassions.

In the release the company lauded PAI for its experience in the food and beverage space, having shares in  Froneri, one of the world’s top ice-cream manufacturers, and Ecotone, a sustainable food brand. The firm’s managing partner Frédéric Stévenin said that PAI will continue to explore the juice brands “growth potential” and that it will continue to invest in “product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories.”