Australia: Coca Cola acquires Mojo kombucha

Just three weeks after buying itself with a $5.1 bn acquisition of Costa Coffee into the coffee sector (inside.beer, 31.8.2018), The Coca-Cola Company continues its inroads into neighboring drinks categories. Yesterday it became known that Coca Cola acquired Organic & Raw Trading Co from Willunga, South Australia, which makes organic kombucha drinks under the Mojo brand. Terms of the deal were not disclosed.

Reuters reported yesterday that Coca Cola might also bid for GlaxoSmithKline’s Indian Horlicks nutrition business and The Economist speculated on Wednesday that the Atlanta-based softdrink giant is taking a closer look at the cannabis-drinks sector. Another Reuters news from yesterday covered Nigeria’s leading juice company Chi, which is well on the way to be completely taken over by Coca Cola early next year after Coca-Cola bought a 40 percent stake in the Nigerian juice and snack producer in January 2016.

Soft drink giants like the The Coca-Cola Company, PepsiCo and Dr. Pepper Snapple fear the growing pressure of levies on sugar-sweetened drinks and therefore diversify in related markets. In November 2016, PepsiCo already entered into a definitive agreement to acquire KeVita, a leading North American creator of fermented probiotic and kombucha beverages. (inside.beer, 25.11.2016)

However, also breweries, which also see their traditional business endangered, have tapped the growing Kombucha market. As of June 1, Molson Coors has acquired based Top Shelf Beverages, a company which operates a kombucha brewery in Fairfield, California and sells the products under the Clearly Kombucha and C Botanicals brands. (inside.beer, 7.6.2018)

Currently Kombucha accounts only for $1.5 billion in global sales. Despite the tiny share of the whole beverage market experts believe that Kombucha has the potential to be “the next big thing”. Especially considering the decline of the soda market in the United States (-3% in 2017) and the minus in overall beer sales (-1% in 2017, despite a rise in craft beer sales), expected compounded growth rates of kombucha sales of 23% over the next five years seem quite tempting for the beverage industry. (inside.beer, 9.7.2018)

Mojo kombucha – which is sold throughout Australia – is made from naturally fermented tea. Kombucha is the fastest-growing beverage category in Australia.

This is the first time Coca-Cola has acquired full ownership of a brand in the category.  For some years Coca Cola already owns a minority share in US-based kombucha maker Health-Ade. The investment was done at that time through First Beverage fund, which was created with several limited partners, including Coca-Cola’s Venturing & Emerging Brands (VEB) unit.

“In just over eight years, Organic & Raw has gone from selling Mojo at a local farmers’ market to producing one of Australia’s leading organic kombucha brands,” said Vamsi Mohan, president, Coca-Cola Australia. “Our goal is to bring Mojo to more Australians by making it available in more places across the country. Consumers will be able to see the same great Mojo products on more store shelves."

He added, “This is another important step in our company’s ongoing work to offer beverages for all occasions, which continues our evolution as a total beverage company. Across Australia, we now have more than 165 products and 25 brands. The addition of Mojo kombucha fits perfectly with the growing popularity of organic, probiotic drinks.”

Anthony Crabb, co-founder and CEO of Organic & Raw, perfected his handmade, fermented drink in his home in 2010. Since then, Mojo has grown rapidly, using the highest-quality organic ingredients, including real fruit for great taste.

Two key leaders who have been responsible for driving Mojo’s growth, Crabb, and Sales and Marketing Director Andrew Buttery, will remain in their current roles.

 “When we started out, we couldn’t have imagined the incredible growth and consumer demand we see today,” Crabb said. “As we continued to innovate, we soon realized that for us to take the business to the next level and provide probiotic beverages to even more people, we needed to find the right strategic partner. We found this partner in Coca-Cola.”

Organic & Raw’s biggest selling kombucha is Mojo Crafted Kombucha, a low-sugar, naturally-fermented, live-culture, organic drink. 

“With this acquisition, Coca-Cola Australia can take a leading role in helping The Coca-Cola Company in the still-emerging, premium-probiotic kombucha category, which is the fastest-growing beverage category in Australia,” Mohan said. “This is a strong opportunity for us.”

 

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