Cold-pressed juice brand Suja Life has been acquired by investment group Paine Schwartz Partners, the company announced today. Financial terms of the deal were not disclosed.
Who is Suja?
There was a time when organic, cold-pressed juice was just a speck on the radar amidst a category packed with either pasteurized or shelf-stable, from-concentrate products. But since launching in May 2012, Suja has been one of the major players in creating space for a new level of premium refrigerated juice in both single and multi-serve formats at grocery stores nationwide, and bringing innovative items like vegetable-based green juice to consumers.
With premium juice benefiting from interest in better-for-you RTD products, Suja did numbers out of the gate: in its first year, it did $18 million in revenue, according to the company, and won the Whole Foods Supplier of the Year award. In 2014, Forbes billed Suja as “the country’s fastest growing beverage company,” and expansion to national chains like Kroger, Costco and Target followed soon after. In 2018 the company was named Refrigerated & Frozen Foods’ Refrigerated Foods Processor of the Year.
Along the way, the company picked up a handful of notable celebrity investors — Leonardo DiCaprio, Jared Leto and Sofia Vergara among them — as well as backing from Boulder Brands ($8.8 million) and ACG ($17.5 million) in 2013. But the big leap came in 2015 when Coca-Cola acquired a 30% stake in the company for a reported $90 million and Goldman Sachs picked up 20% for $60 million at the same time; in 2017, Coke upped its stake by a further 3%. That backing helped the company, operating out of its own 200,000 sq. ft. production and toll processing facility in Miramar, California, to expand to a wide variety of juice-based drinks, including kombucha, enhanced water, sparkling juice and shots with functional ingredients.
What led up to the sale?
Though no announcement was expected today, speculation over a potential exit for Suja has been rife ever since Coca-Cola’s investment, which included an option to buy Suja outright after three years. At the time, the juice company was valued at a reported $300 million, with around $100 million in revenue. In 2018, CNBC reported that Suja had enlisted investment bank Evercore to explore a potential sale.
However, the soda giant’s venture growth strategy has changed dramatically since then: rather than bringing early stage innovative startups into the fold, in recent years Coke has made a concerted effort to shed some of the underperforming brands it had acquired — Odwalla and Zico top among them — and focus on big-ticket bets in big categories, such as coffee (Costa) and sports drinks (BodyArmor), that are a natural fit within its robust ambient distribution network.
That shift echoes some of the greater struggles for the premium juice category during that time. After helping establish HPP as the gold standard for the segment, several of its pioneering names — BluePrint Juice, Daily Greens, the aforementioned Odwalla — have folded in the face of consumer concerns about high sugar content, plus limited shelf presence in mainstream retail and the challenge of establishing nationwide, cross-channel cold-chain distribution.
Underscoring the difficulty of maintaining success, another premium juice company, Bolthouse Farms, once seen as a flagship progressive brand within Campbell Soup Company’s portfolio, was acquired for $510 million in cash in April 2019 — roughly $1 billion less than what Campbell’s paid when it acquired the 104-year-old food and beverage brand in 2012.
Suja has changed behind the scenes as well. Following former CEO Jeff Church’s departure to energy drink maker Rowdy in 2019, three of the brand’s original founding team — Church, Eric Ethans, and Annie Lawless — have all gone their separate ways, with only James Brennan remaining until the end. Former Coca-Cola veteran Bob De Borde took on the role on an interim basis after Church left, and was elevated to the position permanently last year.
Under his leadership, the company has rebounded back into growth: according to co-founder James Brennan, Suja began turning things around in the second half of 2019, and has continued to post “strong double-digit growth in EBITA” through the past year.
What was the turning point?
As Brennan tells it, the decision to seek an exit was precipitated by Coca-Cola’s aforementioned decision to shut down Odwalla and its accompanying chilled DSD network in July 2020. The move gave “a signal to the markets and to the community at large that it wasn’t a category that (Coke) was potentially interested in,” he said, and Suja responded by beginning the process of buying out Coke’s share, a transaction led by Goldman Sachs.
With one of its largest stakeholders now divested, Brennan said the board felt it was the right time to start the process of exploring a sale in March. Reflecting on the company’s long journey to this point, he credited the leadership of Church, Ethans and De Borde specifically for helping Suja ride out some rough patches to eventually reach an exit.
“This was really a testament of resolve to the people who built and ran this company, because it was truly a bumpy road” Brennan said. “We went through the highs of partnering with Coke and then the lows of them basically saying they don’t want you, to rebound back to where we are today — I don’t think that can be overlooked. When you lose momentum like that, you’re usually shopping for coffins at that point. To pull ourselves back up, buy Coca-Cola out of the business and get to where we are today is probably something that I’ll look back on over my entire career and point to as the hardest thing that was ever done.”
Who are Paine Schwartz Partners?
Suja marks a new chapter for San Mateo, California-based private equity firm Paine Schwartz Partners, which is focused on “sustainable food chain investing,” according to its website. The group’s portfolio includes a variety of agri-tech companies spanning from research to manufacturing to supply chain and ingredient solutions.
According to a press release, Paine Schwartz and Suja have a “shared purpose in offering consumers better-for-your plant-based options,” with CEO Kevin Schwartz calling the moment an “inflection point in the company’s growth trajectory.”
“Suja sits at the center of our company’s investment ethos – products that deliver great-tasting, functional ingredients that are as healthy for you as they are delicious,” said Schwartz. “Personally, I am also a longtime, loyal consumer of Suja’s innovative product line. We look forward to supporting the company in this next phase of growth, investing behind new products and expanding distribution to bring Suja to even more consumers everywhere.”
Once the transaction closes, which is expected to happen in a matter of weeks, Suja’s new owners will move forward with the company’s entire existing team and existing distribution structure (as well as the California facility) still in place.
Evercore served as financial advisor to Suja in the deal, with legal counseling by Davis Polk & Wardwell and Giannuzzi Lewendon.
Correction: A previous version of this story inaccurately referred to James Brennan as CEO of Suja, rather than as a co-founder. The article has been corrected.