A Talking Rain representative dismissed as rumor a report from Japan’s Nikkei Asian Review that massive Japanese brewing conglomerate Asahi Group Holdings was planning to purchase Talking Rain, the parent company of fast growing Sparkling Ice.
“We don’t comment on rumors,” Nina Morrison, the company’s VP of Community and Customer Relations, stated in a message to BevNET. “As you know, we are continually working on our global expansion and our international distribution. As a privately held company, in this competitive environment, we will not make any further comment.”
The report, which indicated that the maker of Asahi beer and other food and beverages was preparing to spend close to $400 million — 50 billion yen — to purchase Talking Rain outright, said an agreement is expected soon, allowing Asahi the opportunity to reach the larger markets available in the U.S. Bloomberg later reported that an Asahi spokesman that the company was considering different partnerships but no decision had yet been made.
It came at the same time that Talking Rain is itself looking outside the U.S. as a way to grow revenue. The company has been in massive growth mode for the past two years, skyrocketing from about $40 million in sales to more than $400 million this year. The company has been adding staff and outsourced manufacturing capacity, while also completing a national DSD network to get the product to market. CEO Kevin Klock recently mentioned the brand’s potential for international expansion, as well as food service and increased presence in the convenience channel, as areas with strong revenue potential for Sparkling Ice.
Those DSD partnerships, which have steadily grown since 2013 and now include powerful independents like New York’s Big Geyser and L.A.’s Haralambos Beverage Co., could make the company a valuable acquisition target for an international strategic acquirer.
According to a Bloomberg news report, Asahi has been rumored to be in the mix for acquisitions, including bids for SABMiller’s European beer brands. And it does have a broad portfolio of soft drinks, which are largely for sale in Japan. A new probiotic brand, Calpico, is available in the U.S. and could benefit from access to Talking Rain’s portfolio of wholesalers.
Talking Rain, meanwhile, has been the subject of frequent sales rumors that have been roundly downplayed by CEO Kevin Klock; lately, in fact, he has positioned the company as an acquirer, capable of tucking new brands into its network and helping them scale nationally.
Speaking at BevNET Live on Dec. 7, Klock told the audience that the company’s growth had helped it increase margin growth ahead of schedule — a key point in increasing the company’s value as both an acquisition target and as a going concern.
“The team is starting to settle in and really work well,” he said, adding that in recent years, as the company has grown, “we were building tracks in front of the train.”
The company had engaged Rabobank in 2013 to look into potential investors, but a Wall Street Journal report that the company might be sold for a comparatively paltry $100 million — at the time its sales exceeded $250 million — was later retracted.