Dr. August Oetker KG, family owned parent company of Germany’s largest private brewing group Radeberger has bought Flaschenpost, a four year old startup company involved in the home delivery service for beverages in Germany. The price, as reported by deutsche-startups.de is said to be EUR 1 billion (USD 1.17bn). Flaschenpost (German for “Message in a bottle) runs its service in 23 German cities. Orders are placed via the app and the drinks are delivered free of charge within two hours.
Flaschenpost recorded sales of EUR 27 million in October and had a negative cash flow of 2.5 million per month. Nevertheless, the high rating can be justified by the high growth rate of 200% last year (inside.beer, 16.8.2019) and a contribution margin of 50%. Analysts also point to companies like Amazon which have not earned a cent for years before reaching a critical mass.
While more and more companies seek to get direct access to their final consumers via internet, a startup like Flaschenpost which is also market leader in its segment can be the key.
For long, Oetker tried to conquer the market with a copycat of Flaschenpost called Durstexpress. However, Flaschenpost had the advantage as a first mover and seemed to be better positioned than its clone. Under the new structure, Durstexpress will become part of Flaschenpost. The two companies will have combined 30 hubs in 25 cities and will provide Oetker with a national distribution for its service straight away.
Oetker has presumably not only secured direct access to customers for its various beer brands like Radeberger, Jever, Ur-Krostitzer, Allgäuer Büble and Schöfferhofer, but has also stopped competing groups from entering this promising market. Reportedly, other leading German brewing groups like Krombacher and/or Bitburger in conjunction with Coca-Cola also wanted to secure the deal.
The buyer also hopes to keep the momentum achieved during the pandemic and its lockdowns. People got used to ordering online, not only fast-food like burger and pizza but also beverages.
The purchase is a continuation of the vertical integration strategy that Radeberger had already implemented under his former management spokesman and CEO Dr. Niels Lorenz. Lorenz, who performed this role since 2013, surprisingly quit his job for private reasons and took seat in the advisory board of the Radeberger Group at the end of April. His successor as spokesman of the management and CEO was his management colleague Guido Mockel, who was previously responsible for the brewery business.
The deal has not been officially confirmed yet. People close to the matter say that the real purchasing price is lower than reported, most likely closer to EUR 800 million (USD 931m). In any case, it will be enough to convince all investors including Cherry Ventures, Tiger Global, Vorwerk Direct Selling Ventures, and founder Dieter Büchl to sell 100% of their shares to Oetker.
Financing should also not be a problem because Oetker sold four years ago the world's seventh-biggest container operator, Hamburg Süd, to Danish conglomerate AP Moeller-Maersk and received EUR 3,7 billion (USD 4.3 at today’s exchange rate) in return (inside.beer, 3.12.2016).