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Coke swallows VitaminWater

By Mark Isaac Thyss

Healthier premium beverages are beating out soft drinks, and Coca Cola (NYSE: KO) is making this very clear.  Coke has agreed to pay Glaceau, the maker of Vitaminwater, $4.2 billion in cash and stock for the chance to push vitamin-infused water.

While it’s not exactly a cheap purchase, it makes a lot of sense for Coke.

Vitaminwater has had huge growth of late, and that looks likely to continue. With sales of soft drinks flat or even declining, Coke needs something to drive revenue growth.

This should also be seen as good news for Berkshire Hathaway (NYSE: BRK.A), a major Coke shareholder.

Chairman Warren Buffett is regularly seen drinking Cherry Coke, especially at annual meetings but, as he gets older and investors worry about who will succeed him, a switch to a more healthful, vitamin-filled, lower-calorie beverage could extend his tenure at the helm.

Shares of Coke were up on news of the deal, and the price tag could be used to assign a value to other next-generation beverage companies.

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