Nestlé has sold two of its iced tea brands in North America to private equity firm Fireman Capital Partners (FCP) and Dunn’s River Brands (DRB).
The Sweet Leaf Tea and Tradewinds businesses, which were bought in 2011, have been acquired from Nestlé Waters North America.
The move forms part of a strategy announced earlier this year in which Nestlé plans to focus on high-growth categories like coffee, infant nutrition, pet care and bottled water.
Since then it has acquired Blue Bottle Coffee, Chameleon Cold Brew, plant-based food brand Sweet Earth and vitamin producer Atrium Innovations, among others.
Nestlé has been under pressure to sell underperforming areas of its business after hedge fund Third Point invested $3.5 billion in the company in June.
In June it said it was considering putting its US confectionery business up for sale, which includes the Butterfinger and BabyRuth brands and generated $924 million in sales last year.
Terms of the Sweet Leaf Tea and Tradewinds transaction were not disclosed and the transaction is expected to close before the end of the year.
DRB and FCP said the purchased iced tea brands will “serve as the base for additional DRB acquisitions of smaller high-growth brands”. Based in Dallas, DRB is a strategic beverage platform that aims to support a portfolio of next generation drinks companies.
Kevin McClafferty, DRB CEO, said: “The entire DRB team and I are delighted to partner with Fireman Capital Partners. FCP’s successful track record with consumer and beverage products, such as their current craft beer platform CANarchy and legacy juice brand, Evolution Fresh, make them the ideal partner for DRB as we grow the Sweet Leaf Tea and Tradewinds brands.
“With FCP’s support, we are well-positioned to attract world-class beverage brands and support the next generation of beverage companies.”
FCP managing partner Dan Fireman added: “We are excited to partner with the highly talented Dunn’s River Brands team to build a world-class beverage platform. The Sweet Leaf Tea and Tradewinds brands represent a terrific foundation for the DRB portfolio as consumer demand for specialty, local and functional beverage products continues to increase.
“I am confident that FCP and DRB’s combined consumer and beverage sector expertise will position the DRB platform for long-term growth and success.”
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