CORE has been a KDP allied brand since 2016, with KDP currently managing approximately two-thirds of the brand's US distribution. Following the closing of the acquisition, both CORE Hydration and CORE Organic will continue to be distributed primarily through KDP's company-owned direct store delivery network and independent distributor network, while certain select existing CORE Nutrition distribution partners are expected to maintain their channel coverage.
“CORE has been a valued and successful allied brand partner, and we are pleased that this on-trend beverage will become part of our owned KDP family of brands,” says KDP CEO Bob Gamgort. “Our sales and distribution capabilities have helped fuel significant growth for the CORE portfolio. Through this transaction we intend to realize the full growth potential for the business.”
“We created CORE to meet the increasing desires for innovative, enhanced water offerings with functional benefits for today's modern consumer. KDP has been an outstanding partner for CORE and I am certain that, under its ownership, CORE will continue to see tremendous long-term success,” comments Lance Collins, Founder of CORE. “I am a strong supporter of the KDP strategy and business model and am looking forward to being a shareholder in the company.”
Founded in 2015, the Core Nutrition portfolio includes CORE Hydration, a premium, nutrient-enhanced bottled water, and CORE Organic, USDA-certified organic enhanced fruit hydration, both currently distributed by KDP.
CORE’s line of hydration products are touted as being ultra-purified with “just the right amount of electrolytes and minerals to create a pH balance of 7.4 pH that works in harmony with your body.”
Waters are rising as a share of soft drink launches due to their light fresh and healthy image, Innova Market Insights data has shown.
According to the market researcher, consumers view flavored or fortified water as a way to boost nutrient intake. The category is expanding to include fortified and plant-based waters that consumers believe may have health benefits outside simple hydration.
Beverages with functional benefits are trending, at this year’s Expo West hyper-customization, collagen and functional botanicals in beverages were among the most innovative and prevalent trends, according to an insights report released by Imbibe, a US beverage development company.
Imbibe noted at the time that many brands showcased organic and/or natural energy drinks at Expo West. Examples include Zola Organic Hydrating Energy Drink made with sparkling coconut water and Limitless lightly caffeinated sparkling water.
The mainstreaming of organic beverages with functional benefits was also a key theme at Natural & Organic Awards Europe, which was held in London at the end of April. Similar to FoodEx 2018 last month, premium beverages touting low sugar content or healthful ingredients, played a key role at the Natural & Organic Awards Europe.
KDP was created in January, after Dr Pepper Snapple Group and Keurig Green Mountain entered into a definitive merger agreement. The move led to the, creation ofe a new large-scale beverage company with a portfolio of iconic consumer brands and unrivaled distribution capability to reach virtually every point-of-sale in North America.
The acquisition of CORE Nutrition is reportedly to be funded with KDP common stock, net of KDP's current equity investment and certain other contractual adjustments. KDP expects the transaction to be neutral to its adjusted diluted earnings per share in 2019 and accretive thereafter. The transaction is subject to customary closing conditions and is expected to close by the end of 2018.
The companies report that net sales of all CORE beverages have grown at an average annualized rate of approximately 115 percent over the past three years, with current retail sales across both measured and unmeasured channels estimated in excess of US$200 million in the latest 52 weeks.
