PepsiCo, Dr Pepper acquisitions aim at health concerns

November 23, 2016 | 10:19

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NEW YORK: US soda giants PepsiCo and Dr Pepper Snapple Group both announced acquisitions on Tuesday of niche producers of healthier and healthier-sounding drinks that have been taking market share from traditional cola.

US soda consumption fell to a 30-year low in 2015 as worries about obesity and diabetes hit sales. (AFP/Justin Sullivan)

PepsiCo bought KeVita, a leader in fermented probiotic and kombucha beverages, for an undisclosed price. PepsiCo praised KeVita for having a "loyal and rapidly growing consumer base in the fast growing functional beverage space."

Dr Pepper Snapple bought Bai Brands, a manufacturer of carbonated flavoured water and other beverages, for US$1.7 billion.

Dr Pepper Snapple chief executive Larry Young praised Bai as a leader in fast-growing beverage businesses and said he would support Bai's efforts "to continue the breakthrough and disruptive branding and innovation that have revolutionised their categories."

US soda consumption fell to a 30-year low in 2015 as worries about obesity and diabetes hit sales. Soda makers have responded with a series of reforms, include use of smaller portion sizes.

Soda manufacturers have also faced punitive laws in US cities such as Berkeley, California and Philadelphia, which have imposed taxes on sugary drinks. In November, several other cities joined this movement, including Boulder, Colorado and San Francisco.

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