Coca-Cola Co. said Wednesday it acquired a minority stake in Suja Life LLC, a small but fast-growing maker of organic, cold-pressed juices.

The deal represents the latest diversification move by Coke, whose sales have slowed as health-conscious consumers scale back on soda, which still represents about 70% of company revenue.

The beverage giant is paying roughly $90 million for a nearly 30% stake in San Diego-based Suja, with an option to buy all of the company after three years, according to a person familiar with the matter.

Suja had about $40 million in sales last year—a drop in the bucket for Coke, which booked $46 billion in revenue and whose billion-dollar brands include Sprite soda, Dasani water and Powerade sports drinks in addition to its namesake cola.

But Suja—whose namesake juices include combinations like apple, kale and cucumber—has posted rapid growth since being launched in 2012 and its sales more than doubled last year by tapping into consumer's thirst for more fresh and natural drinks.

Suja uses high-pressure processing to kill bacteria instead of traditional heat. The method helps drinks retain more of their nutritional value and "is probably as close to raw" as packaged juice products "are ever going to get," industry tracker Euromonitor International wrote in a recent report.

Suja juices—which include a mix of strawberry and flax seed—also sell at higher prices than mainstream juices, often fetching $6 or more for a bottle. The brand is currently available in about 12,000 stores in the U.S., including Whole Foods, Costco and Kroger.

Suja also said Wednesday the merchant banking division of Goldman Sachs made a minority investment in the closely held company, whose celebrity investors include the actors Leonardo DiCaprio and Sofia Vergara.

Cold-pressed competitors include Starbucks Corp.'s Evolution Fresh and Hain Celestial Group Inc.'s Blueprint.

Small, premium-priced juices with exotic mixes spanning fruit, vegetables and grains are growing faster than mainstream offerings like orange juice, which is dominated by Coke's Minute Maid and Simply brands and PepsiCo Inc.'s Tropicana brand.

Coke acquired Odwalla Inc., a premium juice maker, for about $180 million in 2001. But Odwalla has lost market share to Naked Juice, a competing premium brand that PepsiCo acquired in 2006.

In recent years Coke also acquired minority stakes in the makers of Zico coconut water and Honest Tea, an organic tea, before assuming control.

Coke has spent more than $4 billion since last year to acquire minority stakes in coffee machine maker Keurig Green Mountain Inc. and energy drink maker Monster Beverage Corp.

Write to Mike Esterl at mike.esterl@wsj.com

 

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(END) Dow Jones Newswires

August 19, 2015 11:55 ET (15:55 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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