Acquiring a majority stake in O.N.E. (One Natural Experience), Los Angeles, CA, PepsiCo, Inc., Purchase, NY, has increased its investment in the coconut water company. Terms of the transaction were not disclosed. This represents a second round of investment in O.N.E. by PepsiCo and Catterton Partners, a private equity firm based in Greenwich, CT. “With demand, supply, distribution, consumer education and the capital to fuel them all lining up, we expect 2011 to be the year that coconut water goes mass market,” said Rodrigo Veloso, O.N.E. founder and CEO.

“Coconut Water is one of the fastest growing categories in the U.S. beverage market and one in which we see a great deal of potential. Our investment in O.N.E. is an investment in the future,” said Massimo d’Amore, CEO, PepsiCo Beverages Americas. “Since we first invested in O.N.E., just over a year ago, the company has demonstrated to us that they have what it takes to succeed—a great product, a strong brand, experienced leadership, deep understanding of the marketplace and robust supply.”

Supply had been a limiting factor for coconut water producers in 2010, but O.N.E. has successfully addressed the issue by developing strong partnerships with three of the largest coconut processors in the world, based in the Philippines and Indonesia. With the investment, distribution of the full line of O.N.E. coconut water-based beverages—including O.N.E. Coconut Water, O.N.E. Active and O.N.E. Kids—will extend beyond the current predominantly warehouse distribution to include expanded DSD distribution through PepsiCo’s bottling arm, Pepsi Beverages Company, in 2011.

In other investment news, PepsiCo agreed to acquire 66% of Wimm-Bill-Dann, Russia’s leading branded food and beverage company, for $3.8 billion pending the required government approvals. Following successful completion, PepsiCo will offer to acquire the remaining shares. According to PepsiCo, the transaction will raise the company’s annual global revenues from nutritious and functional foods from approximately $10 billion today to nearly $13 billion. This moves the company closer to its strategic goal of building a $30 billion nutrition business by 2020. Wimm-Bill-Dann is a leader in both traditional and value-added dairy products, with a solid position in juice.

“Adding Wimm-Bill-Dann to PepsiCo’s portfolio is financially attractive and gives us a strong, high-growth platform in the dairy category,” said Indra Nooyi, PepsiCo chairman and CEO. “It also gives us clear leadership in the food-and-beverage industry in Russia, a fast-growing, strategically important market offering abundant opportunity. At the same time, Wimm-Bill-Dann’s strong, value-added dairy business immediately advances our global nutrition strategy to provide consumers around the world nutritious foods and beverages that are accessible, affordable and advantaged by science. Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience.”

Health and wellness trends around the globe are accelerating, and dairy products offer several fundamental health and nutrition benefits, including natural ingredients like calcium and protein, as well as functional benefits like bone health. In Russia, the dairy market has grown at a rate of 22% since 2006 to $17 billion, and is expected to grow at a low-double-digit rate for at least the next three years. Over the next five years, Russia is forecast to be one of the largest contributors to global dairy growth.