What Will Coca-Cola Acquire Next?

By Trey Thoelcke Updated Jan 11, 6:32PM EST · Published Aug 31, 11:35AM EDT

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What Will Coca-Cola Acquire Next? — © Thinkstock

With its $5 billion acquisition of the Costa coffee shop chain, Coca-Cola Co. (NYSE: KO) once more has shown its commitment to expanding its footprint and the diversity of its offerings through bolt-on acquisitions. Investors must be asking themselves what’s next.

There is no shortage of options, and here are a few that would cost Coca-Cola about the same as the Costa acquisition or even less.

Without straying too far outside its soft-drink category, Coca-Cola might consider New Age Beverages Corp. (NASDAQ: NBEV) or Primo Water Corp. (NASDAQ: PRMW). The former specializes in healthy, ready-to-drink beverages, such as energy and rehydration drinks, and it has a market cap of around $60 million. The latter offers water in multi-gallon bottles, and it has a market cap of less than $800 million.

If Coca-Cola intends to stay focused on coffee for the time being, perhaps Farmer Bros. Co. (NASDAQ: FARM) could be a potential target. This distributor of coffee and other beverage and food products sports a market cap near $500 million.

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DAVIDsTEA Inc. (NASDAQ: DTEA) and Hain Celestial Group Inc. (NASDAQ: HAIN) both are known for their tea offerings. The latter’s products also include snacks, packaged foods and even personal care products. Hain has a market cap of about $3 billion, while other’s is a mere $80 million or so.

If Coca-Cola is interested in expanding into snacks to be more like rival PepsiCo Inc. (NASDAQ: PEP), one place to start may be with either J&J Snack Foods Corp. (NASDAQ: JJSF) or TreeHouse Foods Inc. (NYSE: THS). They both have market caps of less than $3 million. J&J products include pretzels, desserts and more, while TreeHouse offers various snacks, baked goods and condiments. Both also have beverage offerings.

For a little more high-profile option, there is Hostess Brands Inc. (NASDAQ: TWNK), which has a market cap over $1 billion dollars. It is, of course, the maker of Twinkies and so much more.

But back to beverages. It’s not too difficult to image a Coca-Cola takeover of Jamba Inc. (NASDAQ: JMBA), which operates and franchises about 800 Jamba Juice stores that offer smoothies and such. Jamba’s market cap is a little over $200 million. [It turns out that Coke is too late on this one, as Jamba is being acquired by Focus Brands.]

Coca-Cola is not known for its dairy offerings, but an acquisition of Dean Foods Co. (NYSE: DF) could change that. Dean products include milk, butter and ice creams, and it has a market cap of less than $700 million.

And if Coca-Cola really wanted to go outside the soft-drink category, might it consider Boston Beer Co. Inc. (NYSE: SAM), with its market cap of more than $3 billion? Its offerings include not only beer, but hard sparkling water, hard cider and spiked teas as well.

There are many, many other options, including beyond the United States. Or Coca-Cola could decide to not make another acquisition in the foreseeable future. Time will tell.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.