Briefs: Heineken, Coca-Cola and US energy drinks

By Neil Merrett

- Last updated on GMT

Related tags Heineken Alcoholic beverage Drink Coca-cola

This week, Heineken goes shopping in Belarus; Coca-Cola remains
tip-lipped on Honest Beverages deal; and a US energy drink brand
steps up its distribution in the country.

Heineken announce Belarusian buy Heineken has stepped up its presence within the emerging beer markets of Eastern Europe by acquiring the Belarus-based Syabar brewing company from a consortium.

Syabar, which produces national brand Bobrov, has been operating since October 2005 following the reconstruction of a formerly state owned brewery situated in Bobruysk, South East of the city of Minsk, Heineken said.

The purchase of Syabar from Cyprus-based Detroit Investments Limited and the International Finance Corporation will be funded from the Heineken's existing cash resources and is expected to be earnings enhancing by 2008.

Along with the capture of Bobrov beer, the nation's second best selling beer label, the brewer will also obtain the premium Syabar brand as part of the deal.

In 2007, Syabar's sales volumes are expected to reach 600,000 hectolitres, compared to 370,000 hectolitres in 2006, Heineken said.

The Netherlands-based brewer therefore expects double-digit capacity growth from the country's beer market during 2008, with annual consumption estimated by the company to be about 4.5m hectoliters.

Nico Nusmeier, group president of Heineken's operations in Central and Eastern Europe, said the move reflected a company-wide strategy of obtaining strong market positions in new markets.

"Belarus is a fast growing market and this deal will give us an excellent platform from which to grow both the Heineken brand as well as our imported Russian brands," he stated.

Coca-Cola silent on Honest talks Coca-Cola has refused to comment on speculation that it is in talks with US-based organic beverage group in a bid to step up its presence for non-carbonated beverage alternatives.

A spokesperson for the group was unable to confirm whether talks between the two groups had taken place.

Honest beverages is an organic certified manufacturer of organic tea and fruit-based drinks.

Any potential deal for the company would fit into Coca-Cola's aims to expand its portfolio away from its once core carbonated beverage brands, which continue to face a sales backlash amidst growing consumer health concerns over health.

Coca-Cola acquired Glaceau last June for $4.1bn (€3.05bn) as part of a move increase its share in the market for what it calls "active lifestyle beverages" .

These are products, which target health-conscious consumers - a key area of growth in the drinks market.

Honest Beverages was unavailable for comment.

Burn energizes US distribution strategy Regional US energy drink maker Burn has entered into a new distribution agreement to tap demand within the country for functional beverages.

The group announced yesterday that it had signed a deal with Folsom Distributing to expand its presence within the states of Missouri and Illinois.

Folsom will use a mixture of street marketing, sampling and online promotion to push the brands in these markets, Burn said.

The agreement to push Burn onto the US market could prove a prudent strategy for its manufacturer The US boom reflects continuing worldwide growth for energy drinks, as an increasing number of manufacturers look to tap into consumer demands for functional and health benefits in drinks.

Zenith International's research director, Gary Roethenbaugh said the US was becoming an increasingly significant market for energy drinks, and as such was driving global growth for the product.

US consumers drank 990m litres of energy drinks during 2006, a 47 per cent increase over the previous year, making the country the largest global market for the product, Roethenbaugh said.

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