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Coca-Cola Diversifies Still Portfolio with Unilever Deal

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In the past couple of years, The Coca-Cola CompanyKO has been making investments in growing companies and the beverage industry. These investments in newer revenue platforms are expected to boost Coca-Cola's long-term sales and profits by diversifying beyond its carbonated beverages which are experiencing a declining demand due to their high calorie content.

On Wednesday, Coca-Cola and its largest Latin American bottler Coca-Cola Femsa SAB KOF announced that they have reached an agreement with consumer products giant Unilever Plc UL to buy the AdeS soy-based beverage business of the latter for about $575 million.

AdeS, a mix of fruit juice and soy, is a leading soy-based beverage brand in Latin America. It has a presence in Brazil, Mexico, Argentina, Uruguay, Paraguay, Bolivia, Chile and Colombia. With this deal, Coca-Cola will debut into the soy-based beverage category.

In Feb 2014, Coca-Cola entered into an innovative partnership with Keurig Green Mountain under which the latter will make and sell Coca-Cola branded single-serve pods for use on its Keurig Cold at-home beverage system. The deal opens up an exciting new packaging format for Coca-Cola's brands. It also holds a 17% stake in Monster Beverage CorporationMNST and signed a deal with the latter in Jun 2015 to expand distribution of Monster products into additional territories.

This will allow Coca-Cola to compete more effectively in the global energy drink category. Coca-Cola has also signed a distribution agreement with Suja, a high growth organic cold-pressed juice company to gain a foothold in this growing market. In China, the company has invested in the plant-based protein drinks market through the acquisition of the beverage business of China Green Culiangwang Beverages Holdings, now China Green (Holdings) Limited. In early 2016, Coca-Cola acquired a 40% stake in Chi Limited, Nigeria's leading value-added dairy and juice producing company.

All these investments in nutritious and healthier products expands Coca-Cola's still beverages portfolio amid rising health consciousness among Americans.

Coca-Cola has a Zacks Rank #3 (Hold).

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COCA COLA CO (KO): Free Stock Analysis Report

COCA-COLA FEMSA (KOF): Free Stock Analysis Report

UNILEVER PLC (UL): Free Stock Analysis Report

MONSTER BEVERAG (MNST): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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