Coca Cola Bottlers Japan Weighs Sale of Kale Drink Unit

(Bloomberg) -- Coca Cola Bottlers Japan Holdings Inc., the maker and distributor of the carbonated drinks in Japan, is considering a sale of its supplement and skincare unit Q’sai Co., which could fetch about $300 million, people with knowledge of the matter said.

The company is looking to hire an adviser to oversee the potential sale, said the people, who asked not to be identified as the information is private. The divestment could start later this year, the people said.

Q’sai, founded in 1965, was acquired by Coca Cola West Co. in 2010 before the formation of Coca Cola Bottlers Japan, according to its website. Q’sai manufactures and sells a product called “Aojiru,” a vegetable juice drink made of kale. The company also sells skincare products including beauty cream and collagen supplements.

Tokyo-based Coca Cola Bottlers is the largest in Japan, delivering the branded products to more than 100 million customers in the country, according to its website. Soft drink manufacturing accounted for 97% of its revenue in 2019, while the rest came from healthcare and skincare business, data compiled by Bloomberg shows.

The company posted a net loss of about 58 billion yen ($540 million) in 2019 due to a 62 billion yen goodwill impairment, its latest earnings presentation shows. The bottler has kicked off a new five-year “reset and transformation” strategic plan and expects a net income of 9 billion yen this year.

A disposal of Q’sai is part of the company’s strategy to move away from its non-core business, one of the people said.

Deliberations are at an early stage and Coca Cola Bottlers Japan could decide against a sale, according to the people. A representative for Coca Cola Bottlers Japan declined to comment.

--With assistance from Lisa Du and Bhuma Shrivastava.

To contact the reporters on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net;Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Derek Wallbank

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