Coca-Cola has purchased a minority stake in an organic aloe water startup. This latest investment is just one of those made by the beverage company out of its core business, since soda sales in the United States weaken.
Just recently, Coca-Cola stated that it purchased a stake in California-based startup L.A Aloe, which is famous for the firm’s Aloe Gloe brand. The mentioned deal adds to the Venturing & Emerging Brands unit of Coca-Cola. This unit was initially created in the year 2007 as a means for the beverage manufacturer to identify brands that it believes could amount to a billion dollars or more in North America. The Venturing & Emerging Brands segment already added Suja juices, Zico coconut water, and Honest Tea.
According to VEB president Mr. Scott Uzzell, “Our minority investment in Aloe Gloe gives VEB a further entry in the emerging market segment for plant-based beverages.”
Aloe Gloe states that it has posted a 2-year growth rate of 64 percent, citing a Nielsen research.
Aloe Gloe comes in 4 flavors, such as lemonade and coconut, and has a low sugar content. Coca-Cola already collaborated with the brand as a distributor partner.
Coke was able to get Aloe Gloe into about 20,000 stores across the country, including Safeway and Kroger. The minority stake that Coca-Cola unveiled is meant to deepen its relationship with the startup.
In recent times, the beverage maker has initiated a number of bolt-on acquistions. These acquisition deals include a transaction made earlier this month with soy-based drinks manufacturer AdeS from Unilever, amounting to $575 million. Another acquisition deal, which amounts to $400.5 million, was made with China Culiangwang Beverages.
Some of the acquisition deals are meant to support growth in overseas markets, while other investments that Coca- Cola initiated, such as the purchase of a minority stake in Aloe Gloe, provides a chance for the corporation to get on board with fresh trends in the beverage space. Soda sales have softened for several years as consumers try to find alternatives, which they deemed as healthier.
Plant-based beverages and food items, particularly, have obtained a significant amount of attention from Big Food. This development is partly due to the fact that plant-based foods are broadly outperforming in a lot of key categories, such as yogurt as well as other traditional dairy products.
The biggest companies under the food and beverage industry have increased their investment in startups. These huge firms either purchase the startups outright or acquire a minority stake in order to aid them in their growth and expansion. If the demand looks promising, large corporations purchase the brands fully.
Kellogg, General Mills, and Campbell Soup are just some of the Big Food corporations, which have set up different venture capitals in recent times, in order to find ideal startup brands that they can acquire a stake in.
As of the time of writing, the shares of Coca-Cola are changing hands at $44.86, down by 0.60 percent or 0.27. Its market capitalization stands at 194.72 billion, while its dividend yield posts at 3.12 percent.