Coca-Cola Europacific Partners springs into action: ‘We will unlock new, higher growth opportunities’

By Rachel Arthur contact

- Last updated on GMT

The combined porfolio spans soft drinks, alcohol and hot drinks. Pic:getty/alterphoto
The combined porfolio spans soft drinks, alcohol and hot drinks. Pic:getty/alterphoto

Related tags: Coca-Cola Europacific Partners, Australia, New zealand, Indonesia, Europe

Coca-Cola European Partners’ acquisition of Coca-Cola Amatil closed yesterday, creating Coca-Cola Europacific Partners. Reporting its Q1, 2021 results this morning, the company sees the impact of the pandemic start to ease, particularly in Australia and New Zealand.

The first three months of 2021 have been a tale of two markets: Australia and NZ having largely recovered from the pandemic and showing the positive impact of increased mobility; while Europe is still hit with shutdowns or restrictions in the on-trade, albeit with improving trends and strong at-home consumption.

Meanwhile, Indonesia shows a differing dynamic again: a highly populous market still affected by the pandemic, but with ‘significant headroom for growth’ over the longer term.

Australia and NZ: model for pandemic recovery 

Coca-Cola European Partners was already the world’s largest Coca-Cola bottler: a position now solidified by the acquisition of Amatil (Adding together European Partners' revenues of around €13.5bn a year with Amatil’s €2.9bn means the new Europacific Partners can expect revenues in the region of €13.5bn / $16.4bn compared to, for example, Latin American bottler Coca-Cola FEMSA, at €7.5bn / $9.12bn).

Part of the logic of the acquisition comes from the similarity of the Australian and New Zealand markets to Europe, with the new Coca-Cola Europacific Partners (CCEP) intending to take ‘a proven and successful playbook in Europe’ and apply it to the Australia, Pacific and Indonesia (API) area. Meanwhile, new learnings from Amatil’s API region can enhance the European market: particularly in areas such as alcohol and hot coffee.

CCEP also, however, champions the geographical and product diversity of the new company – something already highlighted in Q1 with an upbeat performance in API as Australia and New Zealand enjoy their recovery from the pandemic while Europe continues to deal with shutdowns and restrictions. Learnings from Australia and NZ, therefore, can help inform how the European market will recover. 

Q1 2021

Europe:​ volumes down 10%, revenue down 7.5%

Australia, Pacific & Indonesia (API):​ volume down 2.5%, revenue up 6%

The Australian business – which only returned to revenue growth in 2019 after six years of decline – enjoyed 8% revenue growth in Q1.

"Trading conditions remained similar to the last quarter of 2020, with renewed restrictions in many of our markets impacting the away from home channel,”​ said Damian Gammell, CEO, Coca-Cola Europacific Partners.

“We have been able to keep on winning, gaining value share in store and online, through our ability to adapt, strong execution and continued focus on our core brands.

“While the pandemic persists and the precise nature and timing of the recovery is unknown, there is optimism ahead. Indeed, the strong post pandemic recovery in two of our new markets, Australia & New Zealand, highlight the positive impact of increased mobility, which will in time come to our other markets.

“In Europe, although conditions remain challenging, we are encouraged by an improving trend across the quarter, especially in GB, with good at-home consumption. Early and decisive in-market actions taken by our colleagues, our disciplined investments in the longer term and our focus on driving efficiencies throughout our business, collectively ensure we will emerge stronger than before.

“We are delighted that as of yesterday the acquisition of Coca-Cola Amatil has closed and we are now Coca-Cola Europacific Partners. Bringing together two of the world’s best bottlers provides exciting growth opportunities and an even stronger strategic relationship with The Coca-Cola Company.”

Indonesia, meanwhile, will be the key market to watch. As the world’s fourth most populous country it has a young population, and is undergoing rapid urbanisation with a growing, more affluent middle class. It is expected to grow GDP at over 5% over the medium-term.

And yet penetration of sparkling beverages is currently low: however, ‘with proven demand, there exists significant headroom for growth’, says the company.

“Indonesia’s growth prospects are particularly exciting, with CCEP now working in one of the world’s most populous and dynamic emerging markets,” ​said Gammell.

Overall, Europacific Partners now covers 29 markets: with others in Western Europe alongside Fiji, Papua New Guinea and Samoa.

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