In another indication that healthier premium beverages are supplanting soft drinks, Coca Cola (NYSE: KO) has agreed to pay Glaceau, the maker of Vitaminwater, for $4.2 billion in cash and stock.
While it's not exactly a cheap purchase, I think it makes a lot of sense for Coke. Vitaminwater has had huge growth of late, and that looks likely to continue. With sales of soft drinks flat or even declining, it needs something to drive revenue growth.
This should also be seen as good news for Berkshire Hathaway (NYSE: BRK.A), a major Coke shareholder. Chairman Warren Buffett is regularly seen drinking Cherry Coke, especially at annual meetings but, as he gets older and investors worry about who will succeed him, a switch to a more healthful, vitamin-filled, lower-calorie beverage could extend his tenure at the helm of Berkshire.
Shares of Coke were up on news of the deal, and the price tag could be used to assign a value to other next-generation beverage companies. It makes Hansen Natural (NASDAQ: HANS) look interesting, with its market cap of around $3.6 billion.
More Vitamin Water news
Beth Gaston Moon: High school vending machines getting more eclectic
Zac Bissonnette: PepsiCo plans a lower-calorie Gatorade
Jonathan Berr: Coke, Pepsi thirst for profits from bottled water
Zac Bissonnette: Experts doubt Snapple will satisfy Coke
Zac Bissonnette: Will Coca-Cola gulp down Snapple?
Joseph Lazzaro: Coke's catching up in the health drink segment
Zac Bissonnette: Coke wants vitamin water
Zac Bissonnette: Coke Zero is no zero, it's a big hit
Sarah Gilbert: Fuze acquisition pits Coke v. Pepsi in ritzy juice war
Cramer on BloggingStocks: Don't paint everything with the jobs brush
Seven banks go up in smoke ahead of the holiday weekend
Sears offering hedge for consumers who lose their job -- good idea?
Reader Comments (Page 1 of 1)
5-29-2007 @ 5:33PM
Lucretia said...
I'm interested in buying some stocks such as, Vitamin Water. Since drink a lot of them.
5-29-2007 @ 5:37PM
SHABAZZ said...
yes this is the best water out here to day i love this sh*t i first try it like 2 yr ago n NYNY -n- fell n love with it my town just got it like the first of this yr i had to have my gurl send it me like 3 tyme a yr she live like 80 miles from me it rock u rock me keep up the good work man we need some more hard rapp out of u like the sh*t u did for EMIN3M back n the day b for u hit it bigggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggg
6-02-2007 @ 8:18PM
ericsmusclecars said...
It is delish....I drink several bottles a day.
http://www.ericsmusclecars.com
6-23-2007 @ 2:04PM
brian said...
While I really like this product, it still isn't that good for you, due to the crystaline fructose, and I have a feeling that coke will try to make it even worse. and by worse i mean cheaper for them to make and unhealthier for us to drink.
Try out this other brand named Langers. Its the same concept only they use pure cane sugar that our bodies actually recognize and properly digest and absorb.
6-26-2007 @ 9:38AM
suma valluru said...
the article is very interesting and informative...
cheers
Suma valluru
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http://www.vitamin-shoppe.org
6-29-2007 @ 7:42PM
Pagaka Tysal said...
I LOVEEEEEEEEEEEEEEEEEE VITAMIN WATER!!!!!
7-22-2007 @ 5:30AM
Betty Stohler said...
To many Vitamins isn't healthy. But, it's a great idea!
The Coke Company's well on the track. How about carbonated fruit and vegetetable juices? There could be carrot, beet, squash. Even watermelon, cantalope, and others. Whoa! up goes the stock market and our health. Would this be excellent for picnics and kept incase of there's need for safety emergency? BETTY J STOHLER
8-15-2007 @ 8:23PM
Don Kienitz said...
I bought one bottle @ Walmart the other week to try it out. It's just another way to waste a dollar. I prefer to drink ice water or iced tea and take a multi-vitamin pill.
8-22-2007 @ 4:15PM
Stantsy said...
I drank this vitamin water in SanFran and Buffalo NY, I live in Toronto, Ontario, Canada, is there anywhere in Toronto you can purchase this stuff?. are there any articles as to if this stuff has any positive impact on the body at all?. I would be interested in reading. Thank you. stantsy