On April 3, Castillo Hermanos, a multinational diversified business group, announced an agreement with Brynwood Partners to acquire Harvest Hill Beverage Company, which is responsible for brands such as SunnyD, Juicy Juice and Little HUG, according to a press release, for nearly $1.5 billion dollars.
The $1.5-billion price tag opened eyes, especially considering drinks like orange juice have generally seen declining consumer interest for years.
“In recent years, the company has been working to open itself to the world and bring to life our goal to create global brands that ensure sustained growth,” Juan Monge Calderón, Chairman of Castillo Hermanos, stated. “This acquisition marks a milestone in our history.”
This acquisition will significantly expand Castillo Hermanos’ presence in the U.S. The business has had success in over 35 countries with brands including Gallo Bee – known as Famosa Beer in the U.S. – and Raptor Energy Drink.
“This is a key moment in our history as we set out to meaningfully expand our reach into the U.S.,” Roberto Lara, CEO of Castillo Hermanos, stated. “We look forward to working closely with Harvest Hill’s experienced leadership team to unlock key growth opportunities, leveraging their manufacturing facilities, distribution network, and understanding of the beverage category in the U.S.”
The acquisition of SunnyD may come as a surprise, as consumers seem to be becoming more and more health conscious. Compared to its competitors Tropicana and Simply, which are 100% juice, SunnyD contains only 5% juice and is sweetened with corn syrup and artificial sweeteners.
However, it may prove to be a smart business move on Castillo Hermanos’ part, as U.S. grocery sales of SunnyD are actually on the rise from last year, according to an article by The Wall Street Journal.
Last year, sales of SunnyD were up nearly 7%.
This may be due to the fact that it is attractively priced at under $4, versus Tropicana and Simply which are around $7. Right now, especially, when the threat of another recession is looming, cutting costs has become a priority for most Americans, and for many it may take precedence over health.
It’s also worth noting that SunnyD isn’t the only beverage brand that’s part of the aforementioned acquisition. For more health-conscious consumers, Juicy Juice drinks are 100% juice.
And Castillo Hermanos has made it clear that it plans to meet consumers’ evolving needs, which could include using more natural ingredients, fewer artificial dyes and no high-fructose syrup in SunnyD.
Only time will tell if this business move will pay off, but with the right team behind it, SunnyD could be well-positioned to make a comeback.
The Food Institute Podcast
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Tariffs, geopolitical tensions, and inflation are all weighing on the food and beverage industry and consumers alike, but what can industry leaders do to persevere amid uncertainty? Lou Biscotti from CBIZ’s Food and Beverages Services Group shares his insights on The Food Institute Podcast.
