PepsiCo to Buy Health Beverage Company, KeVita Inc.

United States: In an effort to diversify its business, PepsiCo, is planning to enter into dairy segment by acquiring, US based organic beverage company, Kevita Inc. The acquiree has been operating in the US since 2009 and has over two dozen flavors of certified organic, gluten free and vegan probiotic drinks.

Since its inception, Kevita Inc., has emerged as an innovative, high growth brand that has transformed the functional beverage space. Currently, the company’s products are sold in over 20,000 retail locations across North America. Under PepsiCo, Kevita will operate as a separate unit, with its independent production and bottling unit.

TechSci Research depicts that the organic probiotic drinks are relatively new, therefore the creation of product awareness and brand is of utmost importance to probiotics manufacturers. The promotion and marketing of organic probiotic drinks plays a significant role in enhancing the buying desire of potential customers. The organic probiotic drinks manufacturing companies use innovative ways to not only communicate their product messaging to the consumers but also to spread the awareness about organic probiotic drinks. The move taken by PepsiCo is a significant pivot for the company as it aims to diversify its portfolio toward beverages that comes under health and wellness space and this is the correct time as consumers in U.S are drinking less carbonated soft drinks because of health concerns about the high calorie counts and some sweeteners found in those drinks. People in U.S are leaning toward juices, bottled water, flavoured waters and kombucha, therefore, it makes sense that company would diversify its portfolio and want more in house brands to address the increasing consumer demand.

According to a recently published report by TechSci Research, “Global Organic Food Market By Product Type, By Region, Competition Forecast and Opportunities, 2011 – 2021”, global market for organic food is projected to grow at a CAGR of over 14% during 2016-2021, on account of high demand for organic food in retail stores, restaurants, schools and office cafeterias. Europe dominated demand for organic food across the globe and the region is projected to continue dominating the market through 2021. Further, organic fruits & vegetables dominated global organic food market, due to high content of protective antioxidants, less pesticide residue and low level of toxic chemicals in organically cultivated fruits & vegetables. White Wave Foods, Hain Celestial, General Mills, UNFI, Sprouts Farmers Market and Edeka Group are few of the major players operating in global organic food market.