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PepsiCo Expands Healthier Beverages Portfolio with KeVita Acquisition

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KeVita acquisition

PepsiCo (PEP) is further enhancing its health and wellness product portfolio with its acquisition of KeVita. On November 22, the snack food and beverage giant announced an agreement to acquire KeVita, a manufacturer of fermented probiotic and kombucha beverages.

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Focus on health and wellness

PepsiCo (PEP) has been focusing on expanding its “good-for-you” and “better-for-you” products as consumers cut down their consumption of salty snacks and sugary beverages. The proposed acquisition of KeVita should help PepsiCo address the demand for functional beverages. KeVita offers several flavors under three lines—Sparkling Probiotic Drink, Master Brew Kombucha, and Apple Cider Vinegar Tonic. All KeVita beverages are certified organic, non-GMO, gluten-free, and vegan.

KeVita first launched in 2009 in Ojai, California. The brand now sells in more than 20,000 retail locations across North America. PepsiCo didn’t disclose any financial terms of the proposed acquisition.

Earlier this year, PepsiCo launched an organic version of Gatorade, its leading sports drink brand. PepsiCo also launched cold-pressed juices under its Naked Juice brand. These beverages are made from cold-pressed non-GMO fruits.

PepsiCo’s nonalcoholic beverage peers Coca-Cola (KO) and Dr Pepper Snapple (DPS) are also expanding into up-and-coming beverage categories. In August 2015, Coca-Cola (KO) purchased a 30% stake in Suja Juice, a California-based maker of organic juices. Suja uses a technology called high-pressure processing to preserve nutrition and taste in its juices.

In the first part of this series, we discussed Dr Pepper Snapple’s (DPS) acquisition of Bai Brands. We’ll discuss the recent performance of the soda and non-soda beverage categories for these companies in the next part of this series.

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