ATLANTA — A little more than three years after acquiring a minority interest in El Segundo, Calif.-based Zico Beverages, L.L.C., the Coca-Cola Co. on Nov. 22 said it has acquired all the outstanding ownership stake in the coconut water maker.
Founded in 2004, Zico was one of the three original coconut water brands, along with O.N.E. and Vita Coco. Shortly after PepsiCo, Inc. invested in O.N.E., Atlanta-based Coca-Cola in 2009 joined a group of entrepreneurs, distributors and celebrities in acquiring a 20% minority stake in Zico. In 2012, Coca-Cola bought a majority stake in the brand, and earlier this year began distributing the company’s products along with its signature beverages in the United States and Canada.
“When we made our investment in Zico, we did so because we saw it as a burgeoning premium brand with the potential to be a significant leader in a high growth category,” said Deryck van Rensburg, president and general manager of venturing and emerging brands for Coca-Cola North America. “Over the past four years we have watched the coconut water category see an impressive spike in revenue and household penetration and Zico solidify its position as one of the leading brands in this category. With our acquisition, we plan to innovate in all aspects of the consumer experience and increase both velocity and distribution to position Zico for even more growth. This announcement is the sign of a continued beginning for the brand, with more resources, support and cachet to come.”
Coca-Cola said the coconut water category has seen impressive sales growth since its inception, nearly doubling its revenue every year since 2004. The U.S. coconut water market had more than $153 million in sales during the 52 weeks ended July 6, according to data from The Nielson Co., up 42% from the same period a year ago.
In the period since Coca-Cola’s initial investment in Zico, the brand has expanded its distribution footprint from six markets to national presence, adding such retail partners as Kroger, Target and Wal-Mart.
With five electrolytes and as much potassium as a banana, Zico Pure Premium Coconut Water is available in both a tetra carton and a re-sealable, recyclable, on-the-go HDPE bottle. The company’s beverages are available in natural, chocolate, pineapple, mango, latte, passion fruit, strawberry banana and tropical.
“We always believed coconut water would eventually become a major beverage category and Zico a household name, even when we were running the company from my garage and selling out of a rented truck,” said Mark Rampolla, founder and chief executive officer of Zico. “Over the past four years, it has been exciting to see Zico excel as our partnership with The Coca-Cola Co. matured. Now, with full access to the resources of the Coca-Cola system, we have the opportunity to bring Zico and the healthy, replenishing benefits of coconut water even further into the mainstream and realize our original goals.”
As part of the transaction, G. Scott Uzzell has been named president of Zico Beverages, L.L.C., with responsibility for day-to-day management. Mr. Rampolla will remain as a non-executive adviser to Zico supporting the transition and long-term strategic initiatives.Mr. Uzzell most recently was chief commercial officer and executive vice-president of sales at Zico for the past year. Earlier, he held numerous leadership roles for Coca-Cola, including vice-president of the McDonald’s business unit and vice-president/general manager, incubation for VEB.