Drinks giant Pepsi is selling juice brand Tropicana in a $3.3bn (£2.4bn) deal as health-conscious consumers ditch sugary drinks in favour of lower-calorie options.
PepsiCo will offload its juice brands, which also includes Naked smoothies, to French private equity firm PAI Partners but retain a 39pc stake through a joint venture.
PepsiCo bought the Tropicana range in 1998 and Naked in 2007, adding SodaStream three years ago for $3.2bn.
Ramon Laguarta, chief executive of PepsiCo, said: “This joint venture with PAI enables us to realise significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands.
“It will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet.”
PAI also has a joint venture with Nestlé for brands including Häagen-Dazs ice cream.
Pepsi agreed the tie-up with PAI after a decade-long decline in demand for juices and fruit drinks as consumers trade them out for less sugary options.
Research from Beverage Marketing Corp found that people were drinking almost a fifth less juice and fruit drinks than they were a decade ago.
The trend was partly reversed last year when orange juice sales rose as consumers loaded up on vitamin C amid growing concerns over Covid.
However, demand has since waned, accelerated by Government efforts to reduce sugar consumption, such as the introduction of the sugar tax in the UK in 2018.
Manufacturers including Pepsi and rival Coca-Cola have been attempting to cut the sugar content in their drinks. Pepsi launched a range of “Lean” Tropicana juices late last year, which contained less sugar and fewer calories.
Both Tropicana and Naked are among the most popular juice brands in the UK , generating global sales of about $3bn last year but with lower margins than other products.
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