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Just three years after PepsiCo sold Tropicana and its portfolio of other smaller brands, top executives said the spinoff is poised to accelerate beverage growth through innovation and expansion into new markets.New consumption opportunities.
“This is about unlocking growth. We inherited a family of brands with great potential and industry leadership,” Monica said. McGurk“This is the primary reason we come to work every day. We think there’s significant upside potential, and that’s where we remain sharply focused,” Jonathan McClellan, CEO of Tropicana Brands Group’s (TBG) North American operations, said in an interview.
PepsiCo sold its North American and European beverage brands, including Tropicana, smoothie maker Naked Juice and probiotic drink KeVita, to private equity firm PAI Partners for $3.3 billion in 2021. PepsiCo retained a 39% stake. Uncontrolled The company noted that at the time of selling its stake in these brands, the division’s operating margins were below its overall benchmark.
Monica McGurk, CEO of Tropicana Brands Group’s North American operations.
Used with permission from Tropicana Brands Group.
As part of PepsiCo, McGurk is the chairman and CEO of TBG. Juice’s portfolio was competing and therefore could not garner the attention it needed. The CPG leader’s other beverage and snack businesses operate globally.
Since becoming an independent company, TBG has been able to bring a new level of focus to its portfolio by providing more resources and support to products and formats beyond Tropicana orange juice. We’ve cut the time it takes to bring new products to market in half, allowing us to be more agile and responsive to consumer needs.
Recent innovations include Naked’s low-sugar products. Tropicana introduced new formats such as sparkling drinks and lemonade platforms, while KeVita introduced aluminum cans.
““When we were a small fish in a big pond, money had to be prioritised and we often had to carefully choose where to allocate our given spend,” she said. “Now, as an independent company, we can take a more holistic approach to portfolio management and take further steps.”
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Courtesy of Tropicana Brands Group
TBG has also aggressively promoted its beverages, particularly Tropicana, as an afternoon option rather than the morning when most consumption occurs. For example, Tropicana Sparkling uses real fruit named for the brand but is low in sugar and juice. The beverage is targeted to consumers looking for a refreshing drink or as a snack or meal complement.
TBG also hasn’t lost sight of its Tropicana-affiliated orange juice business: The beverage maker is promoting orange juice as a mimosa option and partnering with Milk Bar to offer soft-serve ice cream.
The company’s success is paying off, with over 50% of its U.S. portfolio experiencing volume and sales growth — a remarkable achievement in the food and beverage industry at a time when inflation is causing consumers to cut back on spending and reducing sales volumes for most companies.
The Chicago-based company has spent time improving its existing brands as an independent company, but McGurk said TBG may eventually conduct its own M&A activity.
She declined to provide details about what types of drinks TBG sells, but said: I might end up buying it She said the company aims to offer products that resonate with consumers, noting that the public has shown widespread interest in functional beverages.
TBG is “continuously evaluating” acquisition targets that could benefit from its marketing, innovation and other capabilities, McGurk added. [TBG] It’s a great chassis to hook other things onto.”
