Coca-Cola is buying the biggest soy-beverage brand in Latin America.
On Wednesday, Coca-Cola said it and the Mexico City-based franchise bottler Coca-Cola Femsa were acquiring AdeS from Unilever for $575 million.
AdeS is the leading seller of soy-based beverages, including milk and fruit juice, in Latin America, with a presence in countries including Brazil, Mexico, and Argentina. The brand generated net revenues of $284 million in 2015, Coca-Cola said.
“AdeS complements and reinforces our noncarbonated beverage portfolio offer, providing our consumers with a wider range of choices,” John Santa Maria, CEO of Coca-Cola Femsa, said in a statement.
The acquisition comes with Coca-Cola eager to expand beyond the sugary sodas for which it is best known.
- AP Photo/Wilfredo Lee
“Over the last 15 years, we’ve gone from stills being a single-digit part of our portfolio to now over 25% of our portfolio,” Coca-Cola COO James Quincey said in an earnings call in April. Still, or noncarbonated, beverages include water, sports drinks, and juice. “We expect to continue to grow faster in stills … and we’ll continue to look for acquisitions to accelerate our growth.”
Coca-Colapurchased a 40% stakein Nigeria’s largest juice maker, TGI Group’s Chi Ltd, in January, with plans to buy the rest within the next three years. In April the company agreed to purchase the beverage business of China Culiangwang Beverages Holdings,which specializes in “multigrain beverages,” for $400.5 million.
Coca-Cola is diversifying its products as soda sales slump globally. In the first quarter of the US, the company’s sales of sparkling beverages, including Coke and other sodas, remained flat, while sales of still beverages increased 7%.
Ultimately, the soda giant needs to diversify to survive. With the acquisition of AdeS, it’s clear that this diversification is not limited to the US.