Purity Organic has acquired Dunn’s River Brands, an Austin, Texas-based management company created by investment firm Fireman Capital to run its beverage portfolio, including iced tea brands Sweet Leaf and Tradewinds, for an undisclosed fee.
Sweet Leaf and Tradewinds will be integrated into San Francisco-based Purity Organic’s portfolio of shelf-stable beverages, which includes coconut water, juice and flavored sparkling water. The deal marks the third ownership change for the two companies in less than a decade.
“We believe there is tremendous potential for all our brands as the organic beverage market continues to expand,” said Douglas Abrams, chairman of Purity Organic, in a press release. “ We will continue to deliver great tasting, organic beverages with a variety of strong brands.”
Sweet Leaf, founded in 1998 by Clayton Christopher and David Smith, offers a range of sweetened and unsweetened teas primarily sold in 16 oz. single-serve PET bottles. Meanwhile, Tradewinds is a non-organic brand available mainly in 64 oz. jugs in the Great Lakes region. Two years after taking a 35% stake in the brand for $15.6 million in 2009, Nestle Waters acquired Sweet Leaf in full in 2011. The company was sold, along with Tradewinds, to Dunn’s River Brands for an undisclosed fee in 2017.
Last July, Dunn’s River sold its controlling interest in its other portfolio company, turmeric-based beverage brand Temple, to Dutch food company Natur International Corp.
The deal is the first for Purity Organic under the leadership of new CEO Mary Page Platerink, a former Coca-Cola director and the former CEO and founder of functional shot brand First Aid Shot Therapy (F.A.S.T.). In 2018, Purity Organic was acquired by an investor group led by current CEO Douglas Abrams. Prior to that, the company had been operating under interim CEO Bob Nakasone, a managing director with First Beverage Group.
Adding Sweet Leaf allows Purity to expand its core mission of building a nationwide organic beverage brand through DSD providers, Platerink said. The two brands have synergies in distributors and customers, she added, noting that Sweet Leaf’s strong presence in the Southeast, for example, can help open opportunities for Purity Organic in the region.
“In the past few years, independent distributors like Big Geyser have built brands like Honest and Zico and then someone comes in and buys those brands and puts them on their own trucks,” she said. “They are left with a hole in their portfolios. Our strategy is to look for opportunities in the market and look for ways we can bring solid, everyday beverages into these independent distributors and grow along with them.”
Under Purity, Sweet Leaf has the chance for a fresh start. The brand’s primary focus for the moment is distribution, Platerink said, but further changes, including new labeling and reduced sugar formulations, are already being discussed. The company will run sales under Purity Organic’s current team, with some Sweet Leaf team members making the transition. In the meantime, Sweet Leaf is going into production with its existing branding and formulations and will begin shipping product in 4-5 weeks.
“We are going to try to keep our overhead low and our expenses down and get to profitability as fast as possible,” she said. “We are going to focus on brand building and outsource a lot of non-essential pieces.”
Tradewinds, however, will not be part of Purity Organic’s future plans. According to Platerink, the deal for Sweet Leaf was contingent upon also taking on its sister brand, a stipulation that “kind of deterred other potential acquirers.” Calling Tradewinds a “great brand” with a different type of consumer, format and channel focus from Sweet Leaf, Purity Organic’s CEO said the two companies will continue to be run as a single entity with “lots of shared services” while the search for a buyer continues.
A representative for Fireman Capital declined to comment for this story.