USA: Leapin' Lizards! PepsiCo Agrees to Acquire South Beach Beverage Co.
SoBe, whose distinctive logo includes two dueling green lizards, is the fastest growing brand in the rapidly expanding market for non-carbonated alternative beverages. SoBe, which built its business with a highly creative grassroots approach to marketing, offers a wide range of drinks with herbal ingredients.
PepsiCo said that SoBe will be operated as a separate unit and continue to be led by its co-founder and chief executive John Bello (a.k.a. "Lizard King"), who will retain an equity stake in the company. SoBe, which will continue to be based in Norwalk, Conn., will report through Pepsi-Cola North America president and chief executive officer Gary Rodkin.
"SoBe is an extraordinary brand that will be terrific for PepsiCo," said Rodkin. "SoBe enables us to enter the exploding market for new age refreshment. At the same time it will expand our innovation capabilities and strengthen our link with young consumers. And based on the initial popularity of SoBe in several markets outside the U.S., the opportunities for the brand may be truly global."
"We believe that the creative, entrepreneurial SoBe culture will work well alongside Pepsi-Cola Company, which has a long record of innovation and building youthful brands," Rodkin said. "We intend to give SoBe the freedom and autonomy to preserve its unique culture, plus direct access to the advantages of the larger Pepsi-Cola system."
"For SoBe, PepsiCo is the perfect fit," said John Bello, chief executive officer and co-founder of SoBe. "Like Pepsi, SoBe is a special brand that has a special connection with consumers. Pepsi has the talent, resources, energy and commitment to help take SoBe to the next level. It will be a rocket ride. Lizard lovers rejoice!"
The acquisition includes a full range of SoBe products, including fruit blends, energy drinks, dairy-based drinks, exotic teas and other beverages with herbal ingredients.
Pepsi-Cola Company's portfolio of non-carbonated beverages includes: Aquafina, the #1 brand of bottled water; Lipton, the #1 brand of ready-to- drink tea in the United States; Frappuccino, the #1 ready-to-drink coffee beverage; and FruitWorks, a new line of non-carbonated fruit drinks. These brands complement PepsiCo's much larger stable of carbonated soft drink brands, including: Pepsi-Cola, Diet Pepsi, Pepsi ONE, Mountain Dew, Sierra Mist, Slice and Mug.
PepsiCo expects the transaction to be non-dilutive to earnings in 2001 and accretive in 2002.
Terms of the agreement were not disclosed.
J.P. Morgan is serving as advisor to SoBe on the transaction.
The Low-Down on the Lizard: SoBe Facts
* Norwalk, CT-based South Beach Beverage Company -- better known as "SoBe"
-- was co-founded in 1995 by John Bello, CEO and "Lizard King," and
Tom Schwalm, VP and managing partner.
* SoBe is one of the fastest growing brands in the rapidly expanding
alternative beverage market. In the five years since its inception,
SoBe has effectively created the category of beverages with herbal
* With an intensely loyal following among active young adults, SoBe's
iconic logo features a pair of dueling lizards, which has become the
basis for advertising, marketing and an apparel-merchandising program.
The quintessential grassroots marketer, its unique advertising messages
urge consumers: "SoBe Yourself."
* Tightening its connection with active consumers, SoBe's sports marketing
program, "Team Lizard," features a roster of edgy world-class athletes
-- from skateboarding to snowboarding and mountain biking.
* More than doubling its case volume in each of the last three years, SoBe
has a strong presence across multiple categories, including exotic teas,
energy drinks, fruit blends, dairy drinks and other nutrient-enhanced
* SoBe currently offers more than 30 different functional beverages. Its
product lines include 3G Teas, 3C Elixirs, Powerline, Enlightenment,
Lizard, Lean and Essentials, Ice, Sports System and Adrenaline Rush.
* SoBe's package mix includes distinctive 14- and 20-ounce glass bottles,
20-ounce plastic sport bottles, 11.5-ounce cans and 11-ounce aseptic
packages. SoBe is available at convenience stores, grocery stores, mass
merchandisers, warehouse clubs, delis, gas marts, military bases and
other outlets, as well as select restaurants and hotels.
* SoBe has existing agreements with more than 300 independent distributors
-- including various soft drink bottlers, beer wholesalers and
alternative beverage distributors -- operating in parts of all 50 states
and certain international markets. Its most highly developed markets
are in the western United States. SoBe's availability outside the US
includes Canada, Bermuda, Puerto Rico, the Caribbean, the United Kingdom
and a few other markets.
* Ten contract packers in North America currently produce SoBe.
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