Nestle SA, the world’s biggest food company, sold the Juicy Juice fruit drink brand to Brynwood Partners LP as the Nescafe maker trims underperforming assets.
Terms of the deal weren’t disclosed. The sale marks the Vevey, Switzerland-based company’s sixth deal with Greenwich, Connecticut-based Brynwood, a private-equity firm led by Henk Hartong III, according to a statement today from Brynwood.
Brynwood has a track record of excelling with small consumer brands that larger companies have struggled with, as a result of tactical planning. The firm bought the rights to Zest soaps in the U.S. and repackaged the brand with an eye towards the Wal-Mart consumer. For more, see "Life in the Lower Middle Market."
Nestle CEO Paul Bulcke has jettisoned slow-growing food and beverage brands as he ramps up investment in new areas such as skin care and nutrition. The company has also sold PowerBar snacks, Joseph’s Gourmet Pasta and most of its Jenny Craig diet center business over the past year.
“This is consistent with Nestle’s portfolio management approach of focusing on core brands while divesting non- strategic ones,” Nestle spokesman Robin Tickle said by phone.
Founded in 1977, the brand was acquired by Nestle in 1986 when consumer demand for shelf-stable juices in the U.S. was growing. The market has since waned on rising concerns that sugar-laden drinks contribute to obesity. An 8-ounce serving of Juicy Juice’s apple juice contains 26 grams of sugars, according to the brand’s website, which also says that “the best time” to begin drinking fruit juice is when a child is six to eight months old.
The $7.3 billion shelf-stable U.S. juice market has shrunk 3 percent a year since 2011 and has lower margins than categories like coffees and creamers, Nestle said in an investor presentation last month. In that time, Juicy Juice’s market share has declined from 4.6 percent to 3.9 percent, the company said. The brand’s annual sales have declined to about $275 million from more than $500 million seven years ago, Hartong told the Wall Street Journal.
The U.S. is Nestle’s single-largest market, accounting for about 25 percent of its $100 billion in sales.
Additional reporting by Allison Collins