PepsiCo Inc., the Purchase-based beverage and snack food giant, is buying Brazil’s largest coconut water company as it looks to expand its business in one of the world’s fastest growing markets.
The acquisition of Amacoco Nordeste Ltda. and Amacoco Sudeste Ltda. also marks another step in PepsiCo’s ongoing efforts to capture additional customers by broadening its beverage portfolio into new categories.
PepsiCo’ food and beverage lineup already includes 18 different product lines that each generate more than $1 billion in annual sales. Executives see promise in adding coconut water to a product mix that also includes soft drinks, Gatorade sports drinks and Tropicana orange juice because coconut water is a popular beverage in Brazil and other countries.
Amacoco makes and sells Kero Coco and Trop Coco, Brazil’s top-selling coconut water brands.
“Amacoco will complement our current business and enhance our growth prospects throughout Latin America and beyond,” Massimo d’Amore, chief executive officer of PepsiCo Americas Beverages, said in a written statement. “Even in the nascent U.S. market, coconut water sales are enjoying extraordinary growth.”
PepsiCo touts coconut water as a good source of nutrients that “contains calcium and magnesium, and the same amount of heart healthy potassium as a banana or a glass of orange juice.”
PepsiCo gains contracts with coconut water suupliers and takes over two Brazilian factories as part of the acquisition. The company added that it hopes to expand sales in Brazil and other countries by building on the strength of its own distribution system and a network of independent distributors that currently distribute Kero Coco and Trop Coco.
The acquisition, which must be approved by Brazilian regulators, follows other investments that PepsiCo has made in Latin America. Those include buyouts of of Brazilian snack company Comercio de Doces Lucky Ltda. and the Peruvian snack business Karinto S.A.C.
“Within the last year, PepsiCo has announced plans to invest more than $3.3 billion in Latin America over the next several years,” said Luis Montoya, president of Latin America Beverages for PepsiCo.
Terms of the transaction were not disclosed.