Round-Up with Russell - The week in soft drinks
A round-up of the week's soft drinks news
In what is to become a weekly round-up of global soft drinks coverage, just-drinks' Michelle Russell takes a look at the movers and shakers in the sector over the past week.
It's no secret that global trading conditions remain tough. In a conference call this month Bernstein Research analysts pointed to possible slowdowns for PepsiCo and Coca-Cola Co. But, it wasn't all bad news. The analysts believe integration costs and input inflation can largely be overcome by significant cost savings – something most soft drinks firms will be only too pleased to hear.
Across the Pacific, Asahi Group appears to be battling through the tough conditions pretty well, scooping up everything in its path. The firm kicked off the week with the announcement on Monday (22 August) that it has hoovered up the remaining Charlie's Group shares that it does not already own. The Japanese beer and soft drinks giant has had an expensive six weeks. It signed deals to acquire New Zealand and Australia-based Independent Liquor Group for NZ1.52bn (JPY97.6m, US$1.27bn) and Australia's P&N Beverages for JPY16.3bn (US$202m) in July. A NZ$130m takeover offer for Charlie's earlier this month made it a hat-trick for Asahi.
The news has only served to underline the firm's overseas growth strategy and is without doubt set to increase competition in the Australasian soft drinks market.
Expansion has also been on the agenda for US-based firms Reed's and Bebida Beverage Co (BeBevCo). BeBevCo expanded its distribution agreement with Innovative Products to include the state of Kansas, while Reed's signed its third distribution agreement in the last month, with Total Wine & More stores across the US.
It wasn't all sweetness and light for Reed's this week, however. The Virgil's soft drinks maker has had to defend itself against a US Food & Drug Administration (FDA) ruling that claims the company has misbranded some of its products. Reed's however, is confident it won't have any material impact on its business and is working to address the labelling concerns.
In the UK this week, we picked up on an intriguing report that said Innocent Drinks may engage in a complete sell-out to The Coca-Cola Co. The smoothie maker has flatly denied the report. But, Coca-Cola already owns 58% and Datamonitor consumer analyst, Michael Hughes, thinks a buyout at some point is possible. He told just-drinks that Innocent's ethical image would not be hit too hard with the majority of shoppers, even if a buyout took place.
Last but not least, Coca-Cola FEMSA has finished off the week with the announcement that it is to cut its three business divisions down to two. The Coca-Cola bottler says the move will allow it greater flexibility going forward. One analyst that we have just spoken to said that the move might be a precursor for further mergers and acquisitions outside of the Latin America region. Watch this space, then.
PepsiCo has fired its expected salvo of job cuts and investment promises, but confidence cannot be rebuilt in a day....
PepsiCo is set to launch a NASCAR-themed television advert in the US for its Diet Mountain Dew brand....
Ratings agency Moody's has doubts about Coca-Cola FEMSA's ability to integrate a bottling business in Asia, after it emerged a deal in the Philippines is on the cards....
Tingyi (Cayman Islands) Holding Corp has said it expects to receive approval for its tie-up with PepsiCo next month, according to reports....
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