UPDATE: July 19, 2021: Suja Life said it was acquired by Paine Schwartz Partners, a private-equity firm focused on the food and agribusiness sector, from Goldman Sachs Asset Management and co-investors. Terms of the deal were not disclosed. The cold-pressed juice company expects to post around $185 million in sales this year, according to The San Diego Union-Tribune. Coca-Cola purchased 30% of Suja in 2015, and had an option to buy the rest of the firm three years later but passed amid leadership changes and a shift in strategy. The Atlanta beverage giant has since sold or ended production of several brands, including Tab soda and Odwalla juice.
Dive Brief:
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Suja Life, the California-based maker of Suja Juice, is looking into a potential sale, according to CNBC. Sources told the business network that the company has retained investment banking advisory firm Evercore to explore the matter.
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In 2015, Suja sold a 30% stake to the Coca-Cola for $90 million and 20% to Goldman Sachs' merchant banking division for $60 million, The San Diego Union-Tribune reported. Coca-Cola's investment included an option to buy Suja after three years, CNBC noted.
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Lauren Thompson, a Coca-Cola spokeswoman, declined to comment to Food Dive on a possible sale, although she said the beverage company continues to invest in and partner with Suja. "We believe in the mission of the company and its CEO, Jeff Church, and the future growth potential of the brand," Thompson said.
Dive Insight:
Suja was valued at $300 million in 2015 when it sold minority stakes to Coca-Cola and Goldman Sachs, and it currently has about $100 million in revenue, according to CNBC. It's not clear why the company would want to sell itself now, although it may be that Suja has accomplished what it set out to do — leverage Coca-Cola's distribution network and expand production of its organic, non-GMO, cold-pressed juices. Suja also makes kombucha and probiotic vinegar juice, a pair of beverages that are popular with health-conscious consumers.
It may be that the four co-founders of Suja — James Brennan, Annie Lawless, Eric Ethans and Jeff Church — have other initiatives they'd like to pursue. Selling Suja would bring in significant capital to invest in other directions.
According to a recent report from Million Insights, the global cold-pressed juice market is forecast to grow at a high compound annual growth rate from now through 2024 due to increasing obesity rates, the growing prevalence of chronic diseases such as diabetes, and a general consumer interest in nutrition and health. The report named Suja as one of the market leaders in the category, along with PepsiCo's Naked Juice, Coca-Cola's Odwalla, Hain's BluePrint and Starbucks' Evolution Fresh.
M&A activity involving beverage brands has been brisk lately. In September, Keurig Dr Pepper said it would purchase CORE Nutrition, which makes CORE Hydration bottled water and the CORE Organic fruit-enhanced beverage, for $525 million. Coca-Cola bought a minority stake in the BodyArmor sports drink maker last summer for an undisclosed amount, with the option of buying the entire company later on. Coca-Cola also invested in Australia's Made Group, which produces cold-pressed juice, among other products.
And PepsiCo announced in August that it would purchase sparkling water maker SodaStream for $3.2 billion as the beverage giant minimizes its dependence on sugary drinks. These deals give them a foothold in the better-for-you water, juice, tea and sports drink niche that consumers are looking for.
While Coca-Cola would seem to be the logical buyer of Suja Life, that likely depends on the price and how the brand is positioned for the future. Coca-Cola CEO James Quincey recently noted that his company will continue to use M&A to "accelerate its total beverage company strategy" and that an accountability process is in place to make sure acquisitions are working out as advertised.
"M&A serves many purposes, like filling gaps in our beverage portfolio or entering emerging categories," Quincey wrote. "When we see small companies with great brands, M&A provides the opportunity to acquire or invest — and to create value by making these brands bigger and better than they already are."
Regardless of who, if anyone, purchases Suja, it's likely to command a nice premium considering all the trendy beverages it is producing — making now an ideal time to consider a sale.
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