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Hansen Natural Corp., a Corona beverage company faced with mounting competition and declining profits, has acquired a Junior Juice Co., a manufacturer of children's juices. Terms were not disclosed.
Hansen, which has built the greatest name recognition for its energy drinks, said Junior Juice is a leading juice brand in the toddler market and strategically complements Hansen's own multi-vitamin juice drinks geared primarily for older children, according to Beverage World a sister publication of Convenience Store News.
The Junior Juice line is mainly distributed through grocery chains in California, Texas, the Midwest and certain Northeastern states. In the six months ended March 31, Junior Juice achieved net sales of $3.78 million. By contrast, Hansen reported net sales of $79.7 million in 2000.
Bret Hendrickson, a food and beverage analyst for B. Riley & Co. in Los Angeles, said he was surprised to learn of the Junior Juice acquisition because it comes so soon after Hansen's purchase of Blue Sky Natural Beverages late last year.
Hendrickson said he had expected Hansen instead would be looking for a suitor interested in buying its own brand. He said an increasingly competitive marketplace for energy drinks, which has recently attracted players as Coca-Cola Co., Pepsico Inc. and Anheuser-Busch, is placing significant pressure on smaller companies like Hansen.
"It will be difficult to grow the bottom line consistently for this company because they are in such a competitive business," Hendrickson said. He speculated that Hansen will be swallowed up by a larger company in the next 18 months.
If Hansen is preparing to be acquired, Hendrickson said, he was "not sure how Junior Juice fits in." He said he assumes that the purchase price for Junior Juice was not high, because Hansen's management has been generally unwilling to shoulder much debt. However, Hendrickson also noted there is a consolidation underway in the beverage industry, with smaller players merging to attract more attention from supermarket chains and convenience store distributors.