PepsiCo Inc. announced August 12 it has agreed to acquire Amacoco Nordeste Ltda. and Amacoco Sudeste Ltda. (Amacoco), Brazil's largest coconut water company. The agreement is the most recent step in PepsiCo's strategic transformation of its beverage portfolio and marks the company's entry into the fast-growing market for coconut water, a source of natural hydration popular in Brazil and dozens of other countries.
Amacoco makes and sells Brazil's top-selling coconut water brands, Kero Coco and Trop Coco, which are highly regarded by consumers as healthy, refreshing hydration drinks. Together they account for the bulk of packaged coconut water sales in the country, making PepsiCo the category leader.
"We're delighted to welcome Amacoco into the PepsiCo family," said Massimo d'Amore, chief executive officer of PepsiCo Americas Beverages (PAB). "Amacoco is an outstanding company that I have known and admired for a long time. Amacoco will complement our current business and enhance our growth prospects throughout Latin America and beyond. Even in the nascent U.S. market, coconut water sales are enjoying extraordinary growth.
"Combining Amacoco's expertise in naturally-healthy coconut water with PepsiCo's strong brand portfolio and R&D capabilities creates the potential for very exciting product innovation. This transaction also brings a process for ensuring a level of product quality and consistency -- from raw coconut to finished product -- that most other coconut water brands cannot match."
Coconut water represents one of the fastest growing beverage categories due to its natural hydrating qualities, great taste and nutritional benefits. It is a great source of nutrients, particularly for people who lead active lifestyles. It contains calcium and magnesium, and the same amount of heart healthy potassium as a banana or a glass of orange juice.
The agreement includes two manufacturing facilities, one in Petrolina in the state of Pernambuco in Northeast Brazil and a recently opened plant in Sao Mateus in the state of Espirito Santo in the Southeast. In addition, the transaction includes exclusive contracts to assure a supply of high-quality coconut water from partners with longstanding expertise in coconut planting and harvesting.
Kero Coco and Trop Coco are currently distributed by a network of independent distributors. PepsiCo will build on the existing network and will utilize the strength of its local distribution system to expand sales across Brazil, as well as to other markets worldwide.
"Amacoco's brands are already very strong in Brazil, and we will harness PepsiCo's expertise in marketing, production and distribution to accelerate the momentum behind Kero Coco and Trop Coco," said Luis Montoya, president, Latin America Beverages, a division of PAB. "This transaction reflects PepsiCo's long-term commitment to investing in Brazil and other major Latin American markets. It follows the acquisitions of Brazilian snack company Comercio de Doces Lucky Ltda., maker of the popular brands Torcida and Fofura, and leading Peruvian snack business Karinto S.A.C., maker of the top-selling Los Cuates corn chips as well as a popular line of nuts and seeds. Within the last year, PepsiCo has announced plans to invest more than $3.3 billion in Latin America over the next several years."
The transaction is subject to approval by Brazil's regulatory authority. Terms of the transaction were not disclosed.