Coca-Cola Amatil (CCA) has acquired 100% of Western Australian Feral Brewing Company in an attempt to “step in the fast-growing craft beer segment”. Feral Brewing was founded in 2002 by Alistair Carragher and Brendan Varis and operates a brewery in the Swan Valley, Western Australia with a production of about 72,000 hl of beer per year.
Terms of the deal have not been disclosed but CCA plans a smooth transition with all of Feral’s management team to remain in place. The deal comes shortly after AB InBev announced a similar move by taking over Sydney, Australia based craft brewery 4 Pines Brewing Company through its subsidiary ZX Ventures (inside.beer, 22.9.2017).
Coca-Cola Amatil group managing director Alison Watkins said: “The alcohol and coffee business is an important part of Amatil’s future growth plans and this new relationship with Feral Brewing is a really exciting step for us in the fast-growing craft beer segment.” Coca-Cola Amatil has been hit by struggling soft drink sales in Australia, posting a 4% decline in domestic sales for the first half of 2017
“We have a lot of future plans for the business which, if Feral needed to rely on my personal balance sheet to fund, would take years to execute,” said co-founder and head brewer Brendan Varis. “With the bigger team behind us we will be able to expand our innovation program and have access to a distribution network that will put our beers in front of thousands more craft beer consumers,” he said.
CCA, which is 29% owned by The Coca-Cola Company of the US,16% by British multinational banking and financial services holding HSBC and 11% by investment firm National Nominees (11%), is one of the largest bottlers and distributors of non-alcoholic and alcoholic ready-to-drink beverages in the Asia Pacific, and one of the world’s largest bottlers of The Coca-Cola Company range. The company operates 34 production facilities and employs around 14,000 people in Australia, Indonesia, New Zealand, Fiji, Papua New Guinea and Samoa. The product range includes carbonated soft drinks, spring water, sports and energy drinks, fruit juices, iced tea, flavored milk, coffee, tea, beer, cider, spirits and SPC packaged ready-to-eat fruit and vegetable snacks and products.
Australian Beverages, the company’s Australian arm, which delivers two-thirds of group earnings, has been under immense pressure in the last few years due to intense competition in the drinks category as well as shifting consumer tastes away from sugary drinks such as Coke. In March region boss Barry O'Connell stepped down after being only three years with the company and was replaced by Peter McLoughlin, a member of the Australian beverages executive team pending a search for a new head of the division. In May, Australian Beverages/CCA was forced to replace Coke Life two years after its launch (inside.beer, 3.5.2017).
Results for the first half of 2017 for Australian Beverages have been disappointing with volumes down by 3.9% and a slip in sales by 5.1%. Only Alcohol & Coffee grew organically in the six-month period by 5.4%, showing the first times the sales from Molson Coors'Miller Genuine Draft and Miller Chill brands for CCA. The two companies announced the addition of the brands to their existing tie-up in Australia in October last year.
The purchase of Feral Brewing is not CCA’s first step into the brewing sector. The company already jointly owns with Casella Family Brands the Australian Beer Company brewery in Yenda, NSW. Through its subsidiary Paradise Beverages under the lead of general manager Mike Spencer the company also owns a brewery in Suva, Fiji, and another brewery in Apia, Samoa.