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Snacks and beverage major PepsiCo said its Indian beverage business will not be seeing any changes after it announced plans to sell a majority stake in Tropicana and other juice brands to private equity firm PAI Partners in certain regions.
A PepsiCo India spokesperson said, “The transaction announced by PepsiCo applies to the company`s juice brands only in the US, Canada and Europe.”
PepsiCo says India posts double-digit organic revenue growth in Q2
The company on Tuesday said that it has entered into an agreement with PAI Partners to sell Tropicana, Naked and other select juice brands across North America, and “an irrevocable option” to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of approximately $3.3 billion. It added it will be retaining a 39 per cent non-controlling interest in a newly-formed joint venture and retain exclusive US distribution rights to the portfolio of these juice brands.
Last month, the company had said that its India business clocked double-digit organic revenue growth in the June quarter. It also said that volumes of both snacks and beverages witnessed double-digit growth during this period in India.
PepsiCo India reports high single digit organic revenue growth in Q4
PepsiCo’s juices portfolio in India consists of Tropicana Essentials, Tropicana 100%, Tropicana Delight and Tropicana Slice.
Covid headwinds
Experts pointed out that the packaged juices segment in the country faced headwinds in the past financial year with the outbreak of the Covid pandemic impacting away-from-home channels and consumers’ shifting preference for lower-priced products such as aerated beverages and milk-based products. Players have been witnessing recovery trends in the past few months.
In the June quarter, Varun Beverages, the company’s largest franchise bottler in India, reported that volumes of the non-carbonated beverage portfolio grew by 38 per cent year-on-year to 11 million unit cases. It said this growth was driven by Tropicana juices besides energy drink Sting, according to an analyst note by Motilal Oswal.
Meanwhile, PepsiCo in its statement said that these juice businesses (Tropicana, Naked and others) delivered approximately $3 billion in net revenue in 2020.
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