It’s October: ZICO and Coke Still Courting, Not Consummating

There’s no reason to cancel the band or the Justice of the Peace, but it’s obvious that the rumored rush to the altar by Coca-Cola Co., Inc. and Zico Coconut Water didn’t take place by the end of September.

The brand — along with the category — grew well ahead of projections but there’s still a strong due diligence process in place, according to sources, and a deal, which would see Coke expand its minority slice of Zico to a majority stake,  may not take place until after the end of the year.

While that doesn’t mean Zico, which started a relationship with Coke’s Venturing & Emerging Brands unit in 2009 as part of a $15 million investment round, won’t eventually be majority-owned by Coke, it’s also clear that reports indicating that it was imminent didn’t have the time frame right.

Zico's Rampolla: All dressed up, but still no wedding ring!

From a ZICO operations standpoint, it looks like there won’t be major changes even as it opens its books to deep scrutiny by the bigger beverage company. The brand is still signing up smaller DSD operations — like Buckeye, in Ohio, and others in the Midwest — and shows few signs of cutting over more dramatically into the Coke system, despite previous moves to Coke and Coke-owned Odwalla delivery in some geographic regions, including Southern California.

Even after a deal occurs, the brand is likely to remain largely independent, with certain caveats that are fairly broadly defined — like no Pepsi distributors, for example, or no major changes in the course or direction of the business, according to sources.

Insiders — including several early shareholders in the company — had told BevNET and other media outlets that they had been notified that ZICO would sell a majority stake to Coca-Cola by the end of last month. Such a move would have proven difficult last month, anyway, as Zico founder and CEO Mark Rampolla pulled a week of jury duty in September, making official business take place at a much slower pace (Rampolla relocated Zico’s home base from New Jersey to California in 2009 — guess he got a California license somewhere along the line).

Rampolla himself refused to discuss any part of the deal with BevNET.

“We are still going full steam ahead,” was all he offered BevNET during the NACS conference in Chicago.