Victor Forge
In 2019, PepsiCo Inc. announced that it had purchased the CytoSport brand from Hormel for an undisclosed sum, with some sources stating the amount to be $465 million. CytoSport is the manufacturer of Muscle Milk, a range of protein products that feature the nutrients demanded by an active lifestyle. Muscle Milk's products include ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews. This acquisition by PepsiCo is a strategic move to expand its presence in the sports nutrition category and leverage its distribution partnership with CytoSport and the Muscle Milk brand.
| Characteristics | Values |
|---|---|
| PepsiCo's acquisition of Muscle Milk | PepsiCo acquired Muscle Milk from Hormel Foods in 2019 for $465 million |
| Muscle Milk's products | Ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews |
| Muscle Milk's growth | Muscle Milk posted double-digit growth in 2022 and is expected to replicate that in 2023 |
| Sales performance | For the 52 weeks ended May 23, 2022, sales increased by 16.9% to $413 million, while unit sales jumped 5.6% |
| PepsiCo's plans for Muscle Milk | PepsiCo is exploring ways to bring Muscle Milk into other food and drink offerings to provide consumers with additional ways to get their protein |
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What You'll Learn
PepsiCo acquired Muscle Milk from Hormel Foods in 2019
PepsiCo, Inc. acquired the sports nutrition business CytoSport, the maker of Muscle Milk, from Hormel Foods Corp. in 2019. The financial terms of the transaction were not disclosed, but Hormel Foods had acquired CytoSport Holdings for approximately $450 million in 2014.
Muscle Milk's product range includes ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews. The brand has been posting strong sales growth and volume expansion, outpacing the protein shakes and powders category.
The acquisition of Muscle Milk by PepsiCo aligns with the company's strategy to build a consumer-centric portfolio of brands that offer a diverse range of options in the sports nutrition category. PepsiCo intends to leverage its expertise and experience in sports nutrition to drive growth for the Muscle Milk brand.
In recent years, PepsiCo has been expanding its presence in the plant-based category. Muscle Milk has introduced plant-based protein shakes, specifically formulated to meet the needs of athletes and active individuals, containing 30 grams of protein, essential amino acids, and vitamins. This move allows PepsiCo to cater to consumers who are increasingly incorporating plant-based options into their daily routines, including muscle building and fitness regimens.
The acquisition of Muscle Milk by PepsiCo demonstrates the company's recognition of the growing consumer demand for healthier options and its commitment to providing a diverse range of products that support active and health-conscious lifestyles.
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The deal was worth \$465 million
In 2014, Hormel Foods acquired CytoSport Holdings, the manufacturer of Muscle Milk, for approximately $450 million. Five years later, in February 2019, Hormel sold the company to PepsiCo for $465 million. The deal was PepsiCo CEO Ramon Laguarta's first acquisition.
The acquisition of Muscle Milk, a brand of protein powders, shakes, and sports nutrition products, was a strategic move by PepsiCo to expand its presence in the sports nutrition and wellness space. Muscle Milk was a good fit for PepsiCo's portfolio, which already included the popular sports drink Gatorade.
The deal was worth $465 million, a slight premium over the $450 million that Hormel had paid for the brand five years prior. This premium reflected Muscle Milk's growth and potential in the market. Indeed, in the 52 weeks ending on May 23, 2022, Muscle Milk posted sales increases of 16.9% to $413 million, according to the market research firm Circana.
The acquisition of Muscle Milk by PepsiCo was expected to be completed within two months of the announcement. The CEO and president of Hormel Foods, Jim Snee, acknowledged PepsiCo's expertise and experience in sports nutrition, stating that they were the "right long-term owner" of the Muscle Milk business.
Since the acquisition, PepsiCo has been exploring ways to integrate Muscle Milk into other food and drink offerings to provide consumers with additional ways to get their protein. This includes expanding beyond the brand's traditional association with health clubs and hardcore athletes to find broader appeal among consumers.
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Muscle Milk is a range of protein products
The protein blend in Muscle Milk products includes whey protein isolate, whey protein hydrolysate, whey protein concentrate, milk protein isolate, calcium sodium caseinate, and lactoferrin. These products are often marketed towards athletes and fitness enthusiasts, with the promise of supporting muscle growth and workout recovery.
Muscle Milk is a popular choice for those seeking a high-protein, low-carbohydrate supplement. However, it's important to note that it also contains additional ingredients, such as vitamins and minerals, which may be beneficial for some but a cause for concern for others. For example, those with kidney conditions should be cautious when consuming Muscle Milk due to its high protein content, and those with milk protein allergies should avoid it altogether.
While Muscle Milk can be a convenient way to increase protein intake, it's always advisable to consult a healthcare professional or registered dietitian to determine if it aligns with your specific health goals and nutritional needs. As with any supplement, understanding the ingredients and their potential effects is crucial before incorporating them into your diet.
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PepsiCo is exploring ways to bring Muscle Milk into other food and drink offerings
PepsiCo has been on a mission to make Muscle Milk more inclusive since acquiring the brand from Hormel Foods in 2019. The company has been exploring ways to bring Muscle Milk into other food and drink offerings to provide consumers with additional ways to get their protein. While specific new items have not been disclosed, PepsiCo has mentioned that they are "looking into different forms and protein sources" and "continuing to show consumers different ways to use our current product."
Muscle Milk has traditionally been associated with health clubs and hardcore athletes, but it is now finding broader appeal among consumers as an ingredient in coffee, ice cream, and baked goods. The brand has also been engaging with its consumers on social media, learning about the novel ways in which they use the product. This strategy is part of PepsiCo's platform geared toward athletic performance and wellness, which includes its multi-billion-dollar Gatorade brand.
Muscle Milk's sales increased by 16.9% to $413 million in the 52 weeks ended May 23, with a 5.6% jump in unit sales, indicating that the brand's success is driven by both demand and price increases. The brand has been a key contributor to PepsiCo's growth, with double-digit growth in 2022 and expected replication in 2023.
PepsiCo's deep expertise and experience in the sports nutrition category, as well as its long-standing distribution partnership with Muscle Milk, have positioned the company well to grow this dynamic business. The acquisition of Muscle Milk aligns with PepsiCo's focus on health and wellness, with its portfolio of healthier food and beverage options, and its commitment to helping individuals manage their active lifestyles and overall health.
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Muscle Milk is a key component of PepsiCo's athletic performance and wellness platform
PepsiCo Inc. made headlines in 2019 when it announced its acquisition of the sports and wellness brand Muscle Milk from Hormel Foods Corp. The deal, worth $465 million, marked the first acquisition by PepsiCo's new CEO, Ramon Laguarta.
Muscle Milk, known for its range of protein products, including powders, shakes, ready-to-drink beverages, nutrition bars, and energy chews, has become an integral part of PepsiCo's athletic performance and wellness platform. The brand aligns with PepsiCo's focus on sports nutrition and complements its multi-billion-dollar Gatorade brand.
As a key component of this platform, Muscle Milk has experienced significant growth. In 2022, the brand posted double-digit growth, with sales increasing by 16.9% to $413 million. This success has continued into 2023, with Muscle Milk expanding beyond the gym and finding broader appeal among consumers. No longer solely associated with health clubs and hardcore athletes, Muscle Milk has become an ingredient in coffee, ice cream, and baked goods, appealing to a wider range of consumers seeking protein in their diets.
To further extend its growth, PepsiCo is exploring ways to incorporate Muscle Milk into other food and drink offerings. While specific details have not been disclosed, the company is considering different forms and protein sources while showcasing novel ways to use their current product. This strategy aims to make the brand more inclusive and empower consumers to own their strength, both physically and mentally.
Through its acquisition and strategic utilization of Muscle Milk, PepsiCo has reinforced its commitment to athletic performance and wellness, offering consumers a diverse range of options to support their health and fitness goals.
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Frequently asked questions
Yes, PepsiCo Inc. acquired the CytoSport sports nutrition business, the maker of Muscle Milk, from Hormel Foods Corp. in 2019.
The financial terms of the transaction were not disclosed, but sources suggest the deal was worth around $465 million.
Muscle Milk is a brand of protein products that feature the nutrients demanded by an active lifestyle. Its product range includes ready-to-drink beverages, protein-based powders, sports nutrition bars, and energy chews.
PepsiCo is exploring ways to bring Muscle Milk into other food and drink offerings to give consumers additional ways to get their protein. Muscle Milk has also become more engaged with consumers on social media who use the product in novel ways.
