Soft drink maker PepsiCo Inc is in talks to acquire All Market Inc, the owner of coconut water brand Vita Coco, whose celebrity investors include Madonna and Matthew McConaughey, people familiar with the matter said on Friday.
The acquisition would help PepsiCo diversify its offerings as it grapples with stagnant sales, amid a shift of many consumer tastes' away from sugary drinks and snacks towards healthier options.
Purchase, New York-based PepsiCo has offered less than the $1 billion that All Market's owners have been seeking to sell the company, and there is no certainty that negotiations will result in a deal, the people said.
The sources spoke on condition of anonymity because the negotiations are confidential. PepsiCo did not respond to a request for comment, while Vita Coco declined to comment.
Founded in 2004 by two childhood friends in New York, Vita Coco now has sales in 30 countries and is the global leader in coconut water, with a 26 percent share of a market worth $2.5 billion, according to data tracker Euromonitor International.
Extracted from young, green coconuts, coconut water now enjoys prime placement in coolers across North America and Europe.
Verlinvest, the family office of one of the Belgian families related to brewer Anheuser Busch InBev NV, took a stake in All Market in 2007. Singer Madonna and actors McConaughey and Demi Moore are among other investors in the company.
In 2014, All Market sold a 25 percent stake to T.C. Pharma, the owner of Red Bull China, in a deal that brought the drink to the world's most populous country. That deal valued All Market at $665 million (519.73 million pounds).
As part of its healthy initiative programme, Pepsi announced late last year that it aims to have sales of its "everyday nutrition" products, including grains, dairy and hydration, outpace the rest of its products by 2025.
PepsiCo, which also owns Quaker Oats oatmeal, Frito-Lay chips, energy drink Gatorade and orange juice Tropicana, has looked to acquisitions to boost its healthier offerings before.
Its latest acquisition in the healthy drinks sector was probiotic drinks maker KeVita Inc, which it agreed to buy last year. In January, PepsiCo competitor Dr Pepper Snapple Group Inc acquired antioxidant beverages maker Bai Brands LLC for $1.7 billion.