Coca-Cola Amatil (CCA) has signed a deal to distribute Swedish cider Rekorderlig in Australia from January 2014, and said its sales and distribution strength would help consolidate the brand’s market-leading position.
The firm revealed the news in a trading update ahead of its 2012 full-year results, wherein MD Terry Davies hailed CCA’s anticipated 4-5% net profit growth for 2012 (2011 net profits totaled AUS $591.8m or $624m) that he said saw the firm continue “to outperform its peer group”.
The move follows the expiry of a restraint agreement – linked to SAB Miller’s takeover of Foster’s Group – preventing CCA from distributing or manufacturing beer or cider in Australia until December 16 2013.
“Alcoholic cider is the fastest growing alcoholic beverage category in Australia, growing at over 20% per annum, and generating annual retail sales of over $550m,” CCA said: Rekorderlig is the first cider brand in the drinks giant's portfolio and it takes over as distributor from Red Island.
The Swedish-brewed brand is the top cider brand by value in the Australian off-trade. Launched in 2009, it has a 17.5% volume share in packaged cider and accounts for 40% of the category’s AUS $41m value growth in 2011.
“Despite their [CCA’s] size, they maintain an entrepreneurial nimbleness enabling them to move quickly, which is massively attractive to us,” said Kieron Barton, MD of Rekorderlig’s development partner Chilli Marketing.
Rekorderlig leads Australian market
John Murphy, MD of Australian Beverages, said that CCA’s large-scale sales and distribution expertise gave him confidence that it would further strengthen Rekorderlig’s market-leading position.
He said: “CCA is the leading non-alcoholic beverages and partner for the licensed trade, and the future partnership with Rekorderlig will materially strengthen our brand portfolio in this important channel.”
Updating the market on the progress it has made with its new alcohol business, CCA said that new entity Paradise Beverages (Fiji), previously Foster’s Group Pacific Limited, was exceeding expectations.
Following the acquisition of Foster's Fiji Business 10 weeks ago , CCA said it begun marketing Fiji Bitter Draught in the country and launched a new low-carbonate beer, Valima Pure.
Launches on the spirits side are a new premium 12-year old rum from the Fiji Rum Company and a new RTD Bounty Mojito; a new multi-year brewery upgrade is also underway.
Delight with San Miguel assets...
Commenting on these moves, Murphy said: “We are delighted with the opportunities created by the acquisition, its potential exceeds our initial plans for the business.
“The upgrading of the facilities will give us more production capacity and the ability to produce export quality beer, and we have launched a number of new products in the local market already.
Murphy added that CCA had also begun distributing Corono in Fiji and Coors Light and Blue Moon in New Zealand, and would start distributing Carlsberg in Q1 2013.
CCA also announced the acquisition of San Miguel Indonesia’s non-alcoholic beverage bottling assets in Jakarta today, following the latter’s decision to cease production at the 20,000m2 facility.
There was potential to expand the 100,00m2 site, Davis said, while the firm planned to install a new PET line for carbonates – CCA will spend AUS $45m on the acquisition and the new line – to boost production capacity by 20% over the next 12 months.
“There is potential to add a further three beverage production lines, which could increase Indonesian PET capacity by a further 35-40%, providing the business with an immediate low-cost expansion option in the key densely populated West Java region of Indonesia.”