NEW YORK, April 26 – The Wall Street Journal reported yesterday that Coca-Cola Co. is in talks to purchase some, or all, of “enhanced water” maker Glacéau, in a deal that would significantly enhance Coke’s position in the non-cola drink market.
Apparently no deal has been reached yet, but Glacéau is being valued at more than $2 billion, after it sold 30% of itself in August to Tata Group, an Indian conglomerate that also owns the Tetley tea brand, for $677 million.
Glacéau is best known as the producer of the popular drink Vitaminwater, which is starting to gain a bigger reputation among athletes as a substitute to industry giant Gatorade (owned by Pepsico, Inc.). David Wright has become a partial owner of Glacéau, and can be seen in print ads for the power-c dragonfruit flavor of Vitaminwater. Additionally, Brian Urlacher was recently fined $100,000 by the NFL for drinking Vitaminwater and wearing a Vitaminwater hat during Media Day at the Super Bowl (Gatorade is the official beverage of the NFL). Glacéau contacted Urlacher and offered to pay the fine for him, but was turned down. In response, the company made a $100,000 donation to the United Way (the official non-profit organization of the NFL) in Urlacher’s name.
Coke has been desperately trying to diversify its bottled drink portfolio, as sales of its signature cola have been declining for years. After purchasing energy, tea and vitamin-enhanced drink maker Fuze Beverage LLC in February, the company also had talks to purchase the Arizona Beverage Co., making of Arizona teas.
If the company is able to complete a deal to buy Glacéau, it will be interesting to see if they try to work with their new subsidiary to develop additional flavors to the already popular Vitaminwater line (Glacéau also makes fruitwater and smartwater). Possible new creations could be a carbonated Vitaminwater, or a low calorie option made with splenda.