In order to align the business, Coca-Cola Europacific Partners (CCEP) is going to exit the beer and cider market in Australia. The company will finish its cooperation with C&C Group in the first half of 2022. The agreement with Molson Coors will not be renewed in the coming months and CCEP has put up Feral Brewing, a craft brewery in the Swan Valley, Western Australia, for sale and hired boutique investment bank Kidder Williams to run a sale process.
After a strategic review it became clear that achieving scale in beer and cider would require significant investment that is needed in its core business, namely marketing, production, and distribution of Coca-Cola products, other non-alcoholic drinks, spirits and Ready-To-Drink (RTD).
“We are very proud of the journey and performance we have had in our beer and cider portfolio after close to two decades. The next growth phase for the portfolio to become a stronger key partner with our customers would require significant over-investment to accelerate scale,” said Peter West, Coca-Cola Europacific Partners’ general manager for Australia, Pacific and Indonesia.
“As a bottler of iconic brands such as Coca-Cola and Jim Beam, this would come at the expense of focusing our efforts, teams and innovation on our core Spirits, RTD and NARTD [Non-Alcohol Ready-To-Drink] portfolios, where we have a much greater ability to drive category growth.
“A move away from beer and apple cider will allow for greater focus for our teams to execute our exciting growth plans in Spirits, RTD and NARTD and enable the future partners of these beer and apple cider brands to continue to accelerate their performance.”
As a result of the decision, CCEP’s current arrangement in Australia with C&C Group will come to an end during the first half of 2022 and its agreement with Molson Coors will not be renewed in the coming months. CCEP will be working closely with customers and brand partners to ensure a smooth transition that allows for the continued growth of brands that the CCEP team has worked so hard to build,” Mr. West added.
According to industry sources, the sale of Feral Brewing could fetch between AUD 50 million (USD 37.6m) and AUD 60 million (USD 45.1m) as the business has delivered “double-digit growth” over the past four years and has built up strong brand loyalty, according to Mr. West.
CCEP was formed on 10 May 2021 by Coca-Cola European Partners' acquisition of Australian bottling company Coca-Cola Amatil (CCA). (inside.beer, 26.10.2020) It is one of the leading consumer goods companies in the world. The company is operating in 29 countries and has over 33.000 employees.
In Australia and New Zealand, Coca-Cola’s move into the beer and cider sector was mainly performed by Alison Watkins, who headed the business of CCA from March 2014 until the takeover in May 2021. Before joining CCA, she was CEO of GrainCorp, one of the leading malting companies in the world, where she got a deep insight into the beer market.
In 2014, CCA and C&C Group and Coca-Cola Amatil signed a distribution agreement for Magners Cider in New Zealand. In 2016 the cooperation was deepend by a long term agreement for the Magners cider & Tennents beer brands.
In 2016, CCA entered into an exclusive distribution agreement with Molson Coors for Miller Genuine Draft and Miller Chill, thereby extending an earlier agreement for Coors and Blue Moon.
In 2017, CCA acquired 100% of Feral Brewing Company in an attempt to “step in the fast-growing craft beer segment”. (inside.beer, 14.10.2017)
However, after the takeover of CCA by Coca-Cola European Partners and the departure of Alison Watkins, CCEP’s newly appointed Vice President and General Manager of the Australia, Pacific and Indonesia Business Peter West has apparently refocused the business and beer and cider are no longer in the center of attention.
