Coca-Cola takes minority stake in Suja Juice: ‘This is a huge complementary opportunity for us’

By Elaine Watson contact

- Last updated on GMT

Related tags: Organic food

Suja Juice generated revenues of $18m in 2013, $45m in 2014 and is forecasting $70-80m in 2015
Suja Juice generated revenues of $18m in 2013, $45m in 2014 and is forecasting $70-80m in 2015
Coca-Cola is taking a minority stake in super-premium organic juice firm Suja and will distribute the San-Diego-based firm’s products through its Odwalla chilled direct store delivery system. 

Suja also confirmed that the Merchant Banking Division of Goldman Sachs has made a minority investment in Suja, which exploded onto the beverage scene in 2012, generated revenues of $18m in 2013, $45m in 2014 and is forecasting $70-80m in 2015 (click HERE​).

While Suja has not struggled to raise money, teaming up with a strategic partner such as Coca-Cola would “provide additional support, specifically as it pertained to distribution, efficiencies and capacity expansion”​, said founder and CEO Jeff Church.

Mike Saint John, President, Value Added Dairy and Natural Health Beverages, Coca-Cola North America, added​: “This is a huge complementary opportunity for us… Suja is one of the fastest-growing players in the natural health beverage segment. They’re on track to double their business this year. Half of this growth is coming from expanded availability, but the other half is due to their sales velocity.”

The idea is to start small and scale fast

Suja’s products are currently sold in around 13,000 US retail outlets, said Coca-Cola, which said the partners would “explore growth opportunities in new channels​” such as college and university campuses.

The idea is to start small and scale fast… to quickly gather learnings and expand into more customer accounts next year​,” said Saint John.

Although Coke’s portfolio includes Odwalla, there is “limited overlap or intra-portfolio competition”,​ claimed Saint John. “For example, Suja is very much a farm-to-table business with a strong vegetable focus, while Odwalla is very fruit-forward​.”

Suja will 'always be organic, non-GMO, cold-pressured, and free of any additives'

While Church reassured fans that Suja Juice would “always be organic, non-GMO, cold-pressured, and free of any additives”, ​Suja has taken some flak for the deal on social media, with one facebook fan noting that "The minute I saw the word Coca-Cola, my heart sank."

According to BevNET, which broke the story, Coca-Cola is investing $90m for a 30% stake in Suja, with some of the cash going into a new manufacturing facility near the company’s San Diego HQ, while tapping into Coke’s distribution infrastructure could increase Suja’s distribution footprint by up to 50% in the next year.

However, Coca-Cola said it "can’t discuss financial details of the transaction".

The partners are not discussing an eventual path to acquisition for Suja over the long haul, noted BevNET​, “but it is expected that Coke will have an option to purchase Suja after three years.”

Our philosophy has been to democratize HPP juice

Much has been made about the hefty $8.99 price tag originally attached to Suja products, which are made by cold-pressing fresh organic fruits and vegetables, bottling the juice, and then pasteurizing it via HPP, which involves putting the bottles into a high-pressure chamber that is flooded with cold water and pressurized (thus the ‘cold-pressured’ moniker).

However, a new three-tiered pricing architecture has changed perceptions that cold pressured juice is just for wealthy hipsters, Church told FoodNavigator-USA in January​, with Suja Classic 16oz bottles now retailing at $7.99; Suja Elements, a 12oz line exclusive to Whole Foods that launched in late 2013 retailing at $4.99; and the Suja Essentials 12oz line - launched in July 2014 - retailing at $3.99.

“Our philosophy has been to democratize HPP juice because $8.99 is not really affordable for everyone," ​said Church. "With Essentials we wanted to hit an aggressive price point - we were thinking a bit like Amazon, if you build it they will come - and then as we grow we absorb that overhead and create that profitability.”

   

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