US: Sunny Delight Beverages Co sells W Europe business to Orangina Schweppes

Sunny Delight Beverages Co has sold its Western European Sunny Delight juice drink business to Orangina Schweppes, while looking to up its focus on North America.

The company, which is majority-owned by private equity firm JW Childs Associates, confirmed late last week that it will divest its business in Europe and North Africa for an undisclosed amount. At the same time, Sunny Delight Beverages Co (SDBC) said that it is investing around US$70m to upgrade its five North American manufacturing facilities and data systems and to acquire a plant in Sherman, Texas.

Japanese drinks company Suntory Holdings, which acquired Orangina Schweppes last year, said last week that the purchase of Sunny Delight's European and North African franchise, which draws two-thirds of its business from Spain, signals its desire to boost its European, Middle East and African presence through Orangina Schweppes. The company said Sunny Delight's market presence and distribution network would also allow it to enter other market segments.

Financial terms behind the transaction were not disclosed.

SDBC said that the divestment would enable it “to be debt-free and to focus its resources on growing its much larger and more diversified North American business”.

In the US, SDBC has signed an agreement to purchase The JM Smucker Company's plant in Sherman, Texas. Again, terms of the purchase were not disclosed. SDBC has been leasing space at the site since 2004 to produce its SunnyD brand. JM Smucker will continue to produce its Folgers coffee brand at the site until April next year.

"The North American supply chain and data system upgrades, and our purchase of the Sherman plant, will improve corporate profitability, manufacturing efficiency, and our environmental footprint," said Ellen Iobst, senior vice president of manufacturing and technology at SDBC. "This investment will lower our costs ... and will further enhance our sustainability efforts ... . The result will be more highly efficient beverage operations across North America better capable of producing our seven brands.”

SDBC produces its beverages at sites in Anaheim in California, Sherman in Texas, Atlanta in Georgia, South Brunswick in New Jersey and Littleton in Massachusetts.