Nestlé USA announced Wednesday that it has sold Juicy Juice, a well-known but declining juice brand for kids, to investment firm Brynwood Partners. Financial terms of the deal have not been disclosed, however, The Wall Street Journal reports that the total price, including debt raised, couldn’t exceed $200 million.
The deal serves as Brynwood’s sixth acquisition from Nestlé USA and the third in the past 14 months. The Juicy Juice agreement marks the largest buy-side transaction for the firm, which was founded in 1984.
Henk Hartong, senior managing partner with Brynwood, said that his firm has built a reputation as a reliable and willing buyer for corporate carve-outs. Annual sales of Juicy Juice have slid from more than $500 million six years ago to about $275 million today. Hartong said that the figures correspond with Nestlé’s reduction of marketing investment in the brand, he said.
“The deprioritization by the prior owner obviously makes a difference,” Hartong said.
Brynwood, meanwhile, intends to gradually fund the brand through its newly-formed portfolio company, Harvest Hill Beverage Company, with a focus on marketing, innovation and management. It’s a matter of paying more attention to the brand than had Nestlé USA, which has been busy unloading its stake in a number of other brands. Its list of recent divestitures includes Givaudan, a Swiss manufacturer of flavors and fragrances, and the Jenny Craig weight loss business, among others.
While Brynwood’s familiarity with Nestlé mitigates the executional risk of the transition, the firm has conducted transactions beyond carve-outs with a number of other consumer goods companies — notably Procter & Gamble, Unilever, PepsiCo, ConAgra Foods, Sara Lee, Kraft Foods and Mondelez. Yet, corporate carve-outs like the Juicy Juice deal seem to fit well with Brynwood’s model because of its ability to dedicate a specific team toward one brand, Hartong said. If you’re looking for a good example, start in the morning with the firm’s Juicy Juice management.
“The first thing they think about is Juicy Juice,” he said. “And when they close their eyes at night, that’s the last thing they’re thinking about as well.”
Much of the brand’s decline can be attributed to marketing reductions, he said, but one must also consider the growing competition in the juice category. Juicy Juice, the pioneer of the 100 percent juice claim, no longer holds its place as the dominant player of the juice market for kids. More brands have come along to challenge its market share and more retailers have further developed their private label offerings, he said.
There’s also a perception that Juicy Juice, which packs 26 grams of sugar per 8 oz. in its Fruit Punch flavor, for example, has too much sugar for the modern marketplace. However, Hartong said that the brand shouldn’t be compared to colas with high fructose corn syrup. The sugar in Juicy Juice is sourced from natural ingredients that provide vitamins, he said.
“You can’t look at every beverage that has sugar content in the same light,” he said.
The Brynwood team believes that the $7 billion juice category, according to Hartong, remains a key part of consumer shopping habits. Even if the category stays flat or experiences modest declines, he said that a push toward gradual gains in market share could revive the Juicy Juice brand.
“The brand has wonderful equity and has a long history with families over multiple generations,” Hartong said. “We think we can nourish that back.”
The press release from Brynwood follows:
GREENWICH, Conn. — Brynwood Partners VII L.P. announced today that its newly formed portfolio company, Harvest Hill Beverage Company, has acquired the Juicy Juice business from Nestlé USA. Terms and conditions of the transaction will not be disclosed.
Juicy Juice, an iconic 37-year-old brand, enjoys national distribution through leading retailers in the food, mass and club sectors as well as in the foodservice channel. Juicy Juice is widely recognized as one of the pioneer brands in the 100 percent juice category.
“We are delighted to announce the acquisition of the Juicy Juice business from Nestlé USA,” said Henk Hartong III, Senior Managing Partner of Brynwood Partners. Mr. Hartong continued, “We look forward to bringing renewed focus and attention to this great brand that has, and continues to hold, a special place with families over many generations. By further leveraging the brand’s nutritional and wellness attributes, we plan to continue providing our loyal customers with its high quality, great tasting products in innovative packaging formats. We thank Nestlé USA for the opportunity to work with them on this transaction and look forward to a smooth transition of the business.” The company, which expects to announce its management team in the coming weeks, will be based in Stamford, CT.
Brynwood Partners has completed six acquisitions from Nestlé USA, with this acquisition being the third in the past 14 months. Last year, two transactions were completed with Nestlé USA: Brynwood Partners VII L.P. acquired Joseph’s Gourmet Pasta Company and Pearson Candy Company, a Brynwood Partners VI L.P. portfolio company, acquired the Bit-O-Honey brand. The Juicy Juice acquisition marks the Firm’s largest buy side transaction since it was founded in 1984.
Brynwood Partners has a well-established track record of acquiring and reviving brands or businesses that are divested from large corporations. In its 30-year history, Brynwood Partners has acquired 41 corporate brands from 15 different corporate sellers.
Brynwood Partners has a strong investment track record in the food space with active investments, including:
- Joseph’s Gourmet Pasta Company (Brynwood VII portfolio company) a manufacturer and marketer of high-quality stuffed pasta and sauce products to the foodservice and retail channels.
- Back to Nature Foods Company, LLC (Brynwood VI portfolio company) a marketer of Back to Nature natural food products, including crackers, cookies, nuts, granolas and juices as well as the recently acquired SnackWell’s healthy cookies and snacks business.
- Pearson Candy Company (Brynwood VI portfolio company) a manufacturer and marketer of widely recognized confectionery brands, including Pearson’s Salted Nut Roll, Pearson’s Mint Patties, Pearson’s Nut Goodies, Pearson’s Bun Bar and Bit-O-Honey.
- Lightlife Foods, Inc. (Brynwood VI portfolio company) a manufacturer and marketer of soy-based vegetarian burgers, hot dogs, tempeh and other refrigerated and frozen items in the meat alternative category under the Lightlife brand.
Prior investments by Brynwood Partners in the food sector include DeMet’s Candy Company, Richelieu Foods, Inc., Sun Country Foods, Inc., Balance Bar Company, Lincoln Snacks Company and Signature Snacks Company.
About Brynwood Partners
Founded in 1984, Brynwood Partners is an operationally-focused private equity fund that makes control investments in North American based lower middle market companies in the consumer sector.
Brynwood Partners currently manages more than $900 million of private equity capital for its limited partners, which include U.S. and international pension funds, fund-of-funds, endowments, high net worth family investment offices and financial institutions. For more information on Brynwood Partners, please visit www.brynwoodpartners.com.