US drinks giant PepsiCo said on Tuesday that it will sell a majority share in its drink brands Tropicana and Naked to French investment fund PAI Partners for $3.3 billion (€2.8bn).

PepsiCo planned to retain a stake of 39 per cent in the joint venture and invest some of the proceeds in “healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet,” a statement said.

Terms of the deal included “an irrevocable option to sell certain (other) juice businesses in Europe” by early 2022, pending regulatory approval, it added.

PepsiCo purchased SodaStream in 2018 for $3.2 billion and sees a bright future for the healthy food and drink market. 

It acquired the Tropicana line of fruit juices in 1998 and Naked, which makes smoothies, in 2007. Juice sales amounted to around $3 billion in 2020 for Pepsi, but the profit margin was not as strong as for other products. In July, the US group raised its 2021 forecasts and now expects core sales to expand by six per cent.

Juice sales amounted to around $3bn in 2020 for Pepsi, but the profit margin was not as strong as for other products

Meanwhile, “this joint venture with PAI enables us to realise significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” PepsiCo chairman and chief executive Ramon Laguarta said in the statement.

PAI managing partner Frederic Stevenin added: “We believe there is great growth potential to be realised through investments in product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories.

“We are also thrilled that PepsiCo will remain involved as our partner in the joint venture.”

Since the early 2000s, PAI has also built up a 50 per cent stake in the yoghurt brand Yoplait.