PepsiCo Still on the Hunt

PepsiCo might still be interested in acquiring more beverage companies, according to CEO Indra Nooyi.

After sitting still for nearly a year following its acquisitions of Naked Juice and Izze, PepsiCo has an interest in filling in gaps in its wide-ranging portfolio. That interest might also be the result of pressure from shareholders who have watched the Coca-Cola Co. pick up the hot brand Glaceau in the past few months.

Indeed, in the past week, reports have surfaced in leading papers that the company was interested in a pair of high-profile acquisitions – Danone and Nestle. In picking up Danone, PepsiCo would likely be able to grab the high-margin water brand Evian out of Coke’s clutches, while Nestle would give it an even broader water portfolio than it has with Aquafina, which is the country’s best-selling label.

Nevertheless, such acquisitions would not fit with what Nooyi termed “financial discipline” as part of its strategy. She said the deals would be likely to fall in the $5 million to $2 billion range, one that counts out high-value players like Nestle.

In fact, some of the acquisitions might fall more in the snack food arena than in beverages, although that would also allow the opportunity for beverage innovation with the right product. According to one analyst, both Kashi cereals and Clif nutrition bars would work well as an opportunity to create healthy beverage offerings along with snack foods.

 Another company mentioned was Nantucket Nectars, part of the Cadbury Schweppes set of brands that is up for bid right now.