Hot on the heels of a spiked rumor that the company might be looking into an acquisition of major energy drink player Monster Beverage Co., Coca-Cola CEO Mukhtar Kent told Wells Fargo Bank’s senior beverage analyst Bonnie Herzog that the company is not in the market for major purchases, but he did leave the door open to what he called “bolt-on” acquisitions.
Speaking to Herzog at an investor event sponsored by Wells Fargo, Kent also left what appeared to be a pretty wide berth in the definition of “bolt-on” — the term accompanied both smaller, venturing and emerging brand-centered deals like the pickup of Honest Tea as well as the $4.1 billion megadeal that resulted in the acquisition of Glaceau.
Since there aren’t too many brands out there with revenues that matched Vitaminwater’s at the time of that pickup — even though it happened back in 2007 — it does seem that it’s a pretty broad set of potential bolt-ons, indeed.
Still, Kent told Herzog that he believes the best returns will continue to come from the company’s organic growth instead of huge pickups.
Kent discounted one area where Coke has been rumored to be considering a pickup in the size of the Glaceau deal, saying that the company’s tea strategy would center around fast-growing Gold Peak and Honest Tea, as well as Japanese brands and its recently-launched Fuze tea value play. He called acquisition opportunities “minimal,” according to Herzog’s report — which would seem to shut the door on category leader AriZona, which has been the subject of other recent deal rumors for Coke.
That’s not to say it’s discounted entirely — when you think of a $4.1 billion as the cost for a “bolt-on,” who knows how high “minimal” can go?
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