PepsiCo is seeking to boost energy drinks

PepsiCo is seeking to boost its presence in the fast-growing energy drinks category, announcing it will buy Rockstar Energy Beverages for $3.85 billion. The deal reflects the trend among big beverage companies like PepsiCo and Coca-Cola to overhaul their portfolios to shift their reliance on sales of sugary, fizzy drinks and towards options ranging from tea and coffee to water of both still and sparking varieties, which appeal to health-conscious and millennial consumers. Neither PepsiCo nor Coca-Cola own a major brand in the energy drinks category, which is forecast to grow to more than $80 billion over the next five years, and is currently dominated by Red Bull. Ramon Laguarta, PepsiCo chief executive, described the acquisition as “highly strategic”… The deal would mark one of the first big moves for Mr Laguarta, who took the reins from Indra Nooyi in 2018, and comes at a time when sharp moves in financial markets have prompted investors and bankers to rapidly reassess the outlook for merger and acquisition activity… PepsiCo has distributed Rockstar in North America since 2009. Its own stable of energy drinks is limited to Mountain Dew Kickstart, GameFuel and AMP. Coca-Cola owns a stake in Monster Beverage… 

Peter Wells