It's a departure from Oscar Mayer, Velveeta, and Nabisco's Chips Ahoy -- and perhaps a welcome one. Kraft Foods (NYSE:KFT) is hoping to juice up its prospects with the purchase of a beverage line that it likely hopes will be seen as a more healthful product than those mentioned above. Kraft said late last night that it's buying Veryfine for an undisclosed sum.
Though Veryfine is known for juice, it's got a product line called Fruit2O, flavored waters that have been quite popular -- in fact, that product's cited as the No. 1 flavored water here in the U.S. Veryfine had $150 million in sales last year.
In addition to Fruit2O, the acquisition will add Veryfine's line of juices, as well as Fruit2O Plus, flavored with Atkins' favorite sweetener, Splenda. It also provides other beverages, including plain, old-fashioned bottled spring water. (Hopefully, the water is trouble-free, given the recent problems that have dogged Coca-Cola's (NYSE:KO) Dasani line.)
Considering that not so long ago, Kraft was whacking jobs to boost profitability, the company's in need of some kind of infusion. Kraft, which is majority-owned by tobacco giant Altria Group (NYSE:MO), has been plagued by healthier eating trends. The beverages Kraft already provides include Tang, Capri Sun, and Kool-Aid -- thirst quenchers that appeal to kids but probably miss the adult market entirely.
Juice hasn't exactly been a fashionable flow lately, what with the impact of low-carb diets on consumer thirst, but maybe the flavored waters will give Kraft a little more of an adult spin on its beverage selection.
While the deal may not be a cure for what's been ailing Kraft, it's probably a step in the right direction. That is, a step away from much of its traditional fare.
Kraft pays a quarterly dividend, something many investors look for in a stock. If you're interested in dividend-paying stocks with good prospects, check out The Motley Fool's Income Investor newsletter.
Alyce Lomax does not own shares of any of the companies mentioned. She was leery of sugary juice long before Atkins hit the scene.
