Natural, Organic Food and Beverages to Reach $86 Billion
Segment expected to grow at a compound annual growth rate of 10.1% between 2014 and 2019
The retail market for natural and organic food and beverages is expected to grow at a compound annual growth rate (CAGR) of 10.1% between 2014 and 2019. This will bring the annual sales of natural and organic foods and beverages up to $86.7 billion in 2019.
In order to tap into this growing market, Coca-Cola Co. has decided to invest $90 million for a nearly 30% stake in Suja Juice LLC last week. Other investors include Goldman Sachs, who invested a 20% stake at $60 million, bringing the value of Suja Juice to $300 million.
The decision for Coca-Cola to venture into the small but fast-growing niche market of organic, cold-pressed juices is influenced by a growing consumer desire for healthier drink options and Coca-Cola's need for product diversification. Suja Juice beverages include non-GMO ingredients and are created using high pressure instead of heat pasteurization to kill bacteria.
Coca-Cola has the option to purchase the entire company after three years. As more customers continue to scale back on soda purchases, revenue generated from healthier beverages will allow Coca-Cola to hold its place in the beverage market.
Other beverage leaders are seeking alternatives to less healthy drink options. Earlier this month, Pepsi announced its decision to eliminate aspartame from Diet Pepsi. To learn more, visit: http://hubs.ly/H015HCF0.