PepsiCo Says Bye to Tropicana and Other Juice Brands

Earlier this month PepsiCo revealed that it would be selling its Tropicana juice brand along with other juice brands for cool pretax proceeds of $3.3 billion

PepsiCo has agreed to sell Tropicana, Naked and other North American juice brands to a private French equity firm.

The company will additionally receive a 39% stake in a newly formed joint venture with buyer PAI Partners, a French private equity firm.

Pepsi said it will use the proceeds to strengthen its balance sheet and invest back in its business.

The deal with PAI Partners will net pretax cash proceeds of $3.3 billion for the beverage giant.

“This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,”

Pepsi CEO Ramon Laguarta stated.

PAI will also have the irrevocable option to buy certain Pepsi juice businesses in Europe.

The transaction is expected to close in late 2021 or early 2022.

“In part, the news of Tropicana and Naked reflects the uncertain role of fruit juice in the consumer’s routine long term and the ongoing concern about sugar, particularly in North America where Tropicana is largest,” said Howard Telford, head of soft drinks at Euromonitor International.

“While the category in the U.S. enjoyed a boost in off-trade sales in 2020, with consumers seeking more vitamin C for immune support, the long-term trend has been one of decline.”

Shares of Pepsi have risen 5% this year. The company reported net sales of $70.37 billion in 2020.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.