Major US-based private equity firm, KKR is in the midst of acquiring an 85% stake in Dayao Beverages, a Chinese soda brand which is growing in popularity in northern part of China.
Dayao initially plans for IPO to raise fund to expand, however this takes a different turn with the entry of KKR.
Dayao is one of China’s fast growing beverage companies, and it started by targeting the foodservice channels competing alongside established brands like Coca-Cola. Its success was rare and phenomenal, with more than 70% of its existing sales now coming from this channel. Dayao now partners with more than 1,000 distributors and has presence in over one million retail outlets across 31 provinces, autonomous regions, and municipalities in China. In several districts of Beijing, Dayao sales surpassed even Coca-Cola and Arctic Ocean, another popular local soda brand.
KKR is actively investing in China aligning its strategy alongside the country’s industrial development plan. In the past, KKR has acquired major Chinese companies like COFCO Meat as well as Haier.
In 2023, Dayao announced plan to go national within 5 years. As of now, not a single Chinese soda brand has achieved nationwide footprint. However, with KKR management and operational support, Dayao stands a larger chance to expand into larger retail chains, and transforming itself eventually into a national brand.
