Coke Lights the FUZE

Posted February 1, 2007 10:06 am by BevNET.com Staff

FUZE, one of the last remaining core New Age beverage companies, has been acquired by the Coca-Cola Co. for an undisclosed sum, according to the Reuters news agency and a leading Wall Street analyst.

FUZE markets several nutraceutical and vitamin-enhanced products that incorporate juices, teas and dairy mixtures. It had revenues last year of around $90 million, according to Morgan Stanley’s Bill Pecoriello, who reported in a note to investors that the acquisition “should be well received by Coke’s bottlers who have been pressuring the company to improve its non-carb offerings.”

Those bottlers have indeed been pressuring the Atlanta-based soft drink behemoth to broaden its portfolio: a recent Wall Street Journal story mentioned the growing number of instances in which non-Coke products were being sold through the Coke distribution network, including Honest Tea and Cinnabon coffee drinks.

FUZE, owned by creator Lance Collins, has shown increased momentum over the past three years, although its distribution is still largely limited to the Northeastern U.S. With a Super Citrimax-enhanced “Slenderize” line, as well as lines called “Refresh,” “Vitalize,” three tea products and the fast-growing NOS energy drink, the company has a broad footprint in non-carbonated and functional drink categories.

Coke’s ability to keep up with chief rival PepsiCo’s portfolio of non-carbonated products has been questioned by investors and industry experts alike. Upon regulatory approval of the purchase, Coke would allow Fuze to operate as an independent entity, according to the company.