Nestlé and Coke scale down Beverage Partners Worldwide JV

By Ben Bouckley

- Last updated on GMT

Related tags Rtd tea Coca-cola

Nestlé and Coke scale down Beverage Partners Worldwide JV
Nestlé and The Coca-Cola Company have announced plans to ‘rescope’ their Ready-to-Drink (RTD) business Beverage Partners Worldwide (BPW), with the Swiss firm cagey about the decision to phase-out the existing global JV and focus primarily on Canada and Europe.

Each company has a 50% stake in BPW, which posted mid single-digit growth in 2010. Brands include Nestea (a CHF 1bn brand, although this figure includes powdered Nestea, not part of the JV) and Chinese brand Yuan Ye.

Nestlé’s deputy head of corporate media relations, Chris Hogg, told the firm was not providing further details “at this stage”​ about the next steps for the BPW partnership in the new focus markets of Canada and Europe.

But he said: “This new arrangement allows Nestlé and The Coca-Cola Company to play to our respective strengths, while giving BPW a very clearly defined geographic scope...BPW continues to deliver greater value to both parent companies in markets throughout Europe and Canada.”

US Nestea license ends

Both BPW parent companies would be free to develop opportunities in RTD tea in other markets, and Hogg said it was one of the fastest-growing segments of the beverage industry and “offers Nestlé tremendous growth opportunities”.

Aside from Europe and Canada, the only markets where the JV will now operate will be Taiwan and Hong Kong, where The Coca-Cola Company will enter into a license agreement with Nestlé for the Nestea brand.

“In all other territories, the joint venture will be phased-out in a transition to be completed by the end of 2012 subject to any regulatory approval,” ​Nestlé said a statement.

The company also noted that the license for its Nestea brand granted to Coke in the US was due to expire at the end of 2012.

In a recent ‘datagraphic’ (pictured) Euromonitor International analysts predicted strong growth for RTD tea, which it said – together with sports and energy drinks – could trump other soft drinks categories in terms of value growth between 2011 and 2016.

RTD tea’s Asian prospects?

Identifying potential in healthier categories such as sports and energy drinks, RTD tea and fruit/vegetable juice, Euromonitor said growth in the former would be focused in developed markets.

However, the research firm predicted that RTD tea growth would be focused on Asian market, while fruit/vegetable juice growth would be more broad-based in countries as diverse as China and Canada.

Euromonitor said the global implications of soft drinks growth depended on whether the focus was on volume or value.

Bottled water was the fastest-growing based on volume in 45 countries, the research firm said, but based on value bottled water was growing fastest in only 17 countries.

Elsewhere, Euromonitor predicted that carbonates would show more balanced global growth distribution, with volume growth highest in 20 countries and value in 21.

“Value growth from 2011-2016 is forecasted to be the fastest primarily in countries located in Latin America. Increasing incomes are allowing for more indulgent soft drink purchases,”​ Euromonitor said.

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