There is an ongoing transformation in the beverage sector as multinational business group Castillo Hermanos is set to acquire Harvest Hill Beverage Co. from private equity firm Brynwood Partners. The deal will enable Castillo Hermanos to add well-known brands like Juicy Juice and SunnyD to its portfolio, which will impact the United States beverage market.
A Notable Strategic Move: The Most Profound in Brynwood’s History
Acquiring Harvest Hill has paid strategically in full for Brynwood Partners. Henk Hartong III, Brywood chairman and CEO, shared, “This is the biggest deal I have seen in forty years.” This rather highlights the magnitude of this deal for the firm.
The Strength of Harvest Hill’s Portfolio: More Than Just Juice
In the competitive beverage industry, Harvest Hill Beverage Company operates 6 manufacturing facilities throughout the U.S. and holds a prized portfolio that not only includes Juicy Juice and SunnyD, but also Veryfine juices, Little Hug and Big Hug fruit drinks, Big Burst, and Fruit2O flavored waters. The company also sells Nutrament energy nutrition drinks, Guzzler nutrition-infused fruit beverages, Daily’s cocktails and mixers, as well as SunnyD Vodka Seltzer. Castillo Hermanos would benefit greatly from this acquisition, as it brings numerous categories of drinks for consumers into their portfolio.
Global Timeline of Castillo Hermanos
Castillo Hermanos is based in Guatemala City and operates as a conglomerate that engages in other industries such as beverages, beer, food, packaging, commerce, and real estate. The company is seeking to gain more control of the U.S. market, which is why the acquisition of Harvest Hill is a monumental leap towards this goal.
Centerview Capital, based out of Greenwich, will help Castillo Hermanos with their expansion goal. These two companies have formed an alliance, allowing Centerview to give financial support while strategically guiding the conglomerate towards achieving success in its U.S. beverage operations.
Retention Focus: Addressing the Workforce
Castillo Hermanos reaffirms its dedication to the employees of Harvest Hill. Plans include retaining Harvest Hill’s entire workforce of over 1,000 employees, along with the managers and leaders, ensuring industry knowledge is not lost during the transition.
An Attractive Product Collection: Blending Strengths
Roberto Lara, CEO of Castillo Hermanos, stated that he is looking forward to the acquisition as it synergizes with the company’s “trusted and iconic brands” alongside the Harvest Hill portfolio, which will provide a “compelling product assortment to cater to diverse consumer needs.” This indicates that the acquisition will enhance competitiveness in the U.S. beverage market.
Capitalizing on Business Expansion Opportunities: Scaling the Business
Harnessing these assets will enable Castillo Hermanos to scale operations and capitalize on the opening growth opportunities within the U.S. beverage segment. Castillo Hermanos perceives significant value within Harvest Hill’s manufacturing facilities, distribution network, and expertise in the U.S. beverage category.
The History of Harvest Hill Shows Growth Through Acquisition
Works in strategies lie behind the incredible growth story of Harvest Hills, for it stems from strategic acquisitions. Harvest Hill came into being in July 2014 after Brynwood Partners acquired the Juicy Juice brand from Nestle USA. Thereafter, Harvest Hill further added to its portfolio with the purchase of American Beverage Corp. in March 2015, followed by Nutrament in December 2016 and Sunny Delight Beverages Co. in February 2016. In May 2017, Sunny Delight Beverages Co. was absorbed into Harvest Hill.
A Bittersweet Goodbye: The View from Brynwood Partners
The sale of Harvest Hill, in the eyes of Brynwood Partners, marks the end of a development investment cycle for Harvest Hill has had its ride of investments. Henk Hartong III referred to the deal as a bittersweet moment, thanking the employees of Harvest Hill and noting the lasting impact the support of Brynwood’s limited partners will leave.
The Beverage Industry’s Future: Consolidation and Rivalry
Acquiring Harvest Hill has Castillo Hermanos trying to benefit from the overarching industry trend of consolidation. As mergers and acquisitions become the new normal for companies looking to grow their reach and improve efficiency, this deal also works toward that goal directly. The success of this deal will rely on Castillo Hermanos to seamlessly join the operations of Harvest Hill, utilize its extensive portfolio of brands, and also operate strategically within the fiercely competitive US beverage industry.
