Plano, TX — In the latest move by a mainstream beverage company into functional beverages, Keurig Dr Pepper has acquired CORE Nutrition, a company that makes nutrient enhanced bottled water and other healthy drink options, for $525 million.
CORE has been an allied brand of Keurig Dr Pepper since 2016, with the company currently managing approximately two-thirds of the brand’s U.S. distribution. The company said once the acquisition is complete, CORE’s Hydration and Organic lines will continue to be distributed by KDP.
Founded in 2015, CORE has grown rapidly with net sales of its beverages growing at an average annualized rate of approximately 115% over the past three years, the company said. Its current retail sales are estimated to be more than $200 million in the past 52 weeks.
KDP CEO Bob Gamgort said KDP’s distribution network should help the acquired company continue to grow.
“CORE has been a valued and successful allied brand partner, and we are pleased that this on-trend beverage will become part of our owned KDP family of brands,” he said in a statement. “Our sales and distribution capabilities have helped fuel significant growth for the CORE portfolio. Through this transaction we intend to realize the full growth potential for the business.”
This acquisition follows a more recent trend of bigger soda companies diversifying their portfolios with a focus on offering healthier options.
In August, PepsiCo agreed to buy SodaStream International Ltd. for $3.2 billion. The company said that acquisition was a part of its “Performance with Purpose” initiative, which promotes health and wellness through environmentally friendly beverages, as we reported.
Following that, the Coca-Cola Company announced that it had acquired Costa Limited, a coffee company founded in London, $5.1 billion.
KDP itself was recently formed by the January merger between Dr Pepper Snapple Group, Inc. and Keurig Green Mountain. Keurig Green Mountain said the merger gave KDP the resources to reach virtually every point-of-sale in North America, and estimated pro forma combined 2017 annual revenues of approximately $11 billion.
Lance Collins, founder of CORE, said he expects his company to see continued success under the new ownership and guidance of KDP.
“We created CORE to meet the increasing desires for innovative, enhanced water offerings with functional benefits for today’s modern consumer,” he said. “KDP has been an outstanding partner for CORE and I am certain that, under its ownership, CORE will continue to see tremendous long-term success.”