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Just three years after PepsiCo sold Tropicana and its portfolio of smaller brands, its CEO said the spinoff is poised to accelerate growth in the beverage category through innovation and expansion.New consumption opportunities.
“This is a growth catalyst. We inherited a group of brands with a lot of potential and industry leadership.” Monica McGurk“This is the biggest reason we come to work every day,” said the CEO of Tropicana Brands Group (TBG) North America in an interview. “We think there’s a lot of upside, and that’s why we’re focused on razor blades.”
PepsiCo sold Tropicana, smoothie maker Naked Juice, probiotic drink KeVita and other beverage brands in North America and Europe to private equity firm PAI Partners for $3.3 billion in 2021. PepsiCo retained a 39% stake. Non-controlling It was noted that at the time of the sale, the operating profit margin of the division was below the company-wide benchmark.
Monica McGurk, CEO of Tropicana Brand Group North America.
Licensed by Tropicana Brands Group.
As part of PepsiCo, McGurk said TBG The juice portfolio did not receive the attention it needed as it was competing with its competitors. Other beverage and snack businesses worldwide for the CPG giant.
Since becoming an independent company, TBG has been able to focus its portfolio on new products and formats by providing more resources and support beyond its signature Tropicana orange juice. We've cut our time to market for new products in half and become more responsive to consumer demands.
Recent innovations include Naked's low-sugar products. Tropicana launched new formats such as a sparkling beverage and lemonade platform, while KeVita launched aluminum cans.
““When you’re a small fish in a big pond, money has to be prioritized, and we often have to choose where to allocate the money we’re given,” she said. “Now, as a company, we can take a more holistic approach to portfolio management and pull additional levers.”
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Courtesy of Tropicana Brands Group
TBG also actively promoted drinks, especially Tropicana, as an afternoon option instead of the morning option that most people consume. For example, Tropicana Sparkling uses real fruit associated with the brand but reduces sugar and juice. It targets consumers looking for a refreshing option or as a complement to a snack or meal.
TBG didn't miss out on the orange juice business at Tropicana. The beverage maker promoted the juice as an option for mimosas and partnered with Milk Bar to offer soft serve.
That success is paying off as more than 50% of the U.S. portfolio is seeing both volume and sales growth, a notable achievement in the food and beverage sector at a time when inflation is driving consumers to spend less and most companies to cut volume.
The Chicago-based company has spent time improving its existing brands as a standalone business, but McGurk said TBG could eventually engage in some M&A activity on its own.
She declined to give specifics on what types of drinks TBG serves. You may end up buying it, She said the company operates on a proposition that resonates with consumers. The public has shown a wide interest in functional beverages, she noted.
TBG is “continuing to … evaluate” acquisition targets that could benefit from its marketing, innovation and other capabilities, McGurk added. “We think (TBG) is a great chassis to plug into other things.”
