Coca-Cola European Partners’ acquisition of Coca-Cola Amatil closed last month, creating Coca-Cola Europacific Partners (CCEP), the new business unit, which includes Australia, Indonesia, Papua New Guinea, New Zealand, Fiji, and the Pacific Islands.
Reporting its first quarter 2021 results, the company highlights strong post pandemic recovery in Australia and New Zealand where lockdowns have eased. Results in these markets were a stark contrast to Europe where conditions remain challenging.
Looking specifically at the Australia, Pacific, Indonesia (API) region, revenue in Australia is up 8%, Pacific is up 11%, and Indonesia is down 3%.
Damian Gammell, Chief Executive Officer, said: “Trading conditions remained similar to the last quarter of 2020, with renewed restrictions in many of our markets impacting the away from home channel. 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 and 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 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. We will go further, together, creating value for shareholders and a better, more sustainable future for all stakeholders.”
New Zealand outlook
Within the petroleum channel, CCEP accounts for more than half of value sales in the non-alcoholic ready to drink (NARTD) space in New Zealand.
Carbonated soft drinks, water and sports drinks are CCEP’s strongest performers within the channel and the company is also seeing growth from energy drinks off the back of Monster Energy and the flavoured milk category, where its Barista Bros brand is the top performer.
As such an important supplier to the petrol and convenience (P&C) channel, Steve Fielder, National Business Manager – Petroleum, says there have been many highlights for the business over the past 12 months and that there are plenty of opportunities for continued growth in the year ahead.
“The P&C channel is important not only to CCEP, but to New Zealand as a whole. It’s important for us to be a valued partner to our P&C customers and one of the ways we do this is by providing a much loved and trusted range of beverages for their shoppers across the many refreshment occasions.”
Fielder highlights CCEP’s energy drink portfolio and says there is a significant opportunity within the performance energy segment.
“Performance energy is a rapidly growing segment in the energy category globally, so there is a great opportunity to introduce this to the New Zealand market and deliver further growth for the energy category,” he says.
“We have continued to build on our accelerating energy portfolio with the recent launch of Monster Super Fuel – a range of performance energy beverages that not only deliver the energy kick you need for physical activity, but also the hydration benefits through electrolyte delivery.
“We are also transitioning our Barista Bros range to a new recipe with ‘No Added Sugar’. We’ve worked hard to give Barista Bros a great new taste as we know eating and drinking less sugar is important for many people. Reducing the sugar in Barista Bros is one of the many things we are doing to help people make choices that are right for them.”
Throughout 2020, there was a shift in consumer behaviour with shoppers returning to the convenience channel to pick up on the go grocery items to avoid busy supermarkets. As lockdowns have lifted, the channel has been able to retain a lot of those shoppers and the focus for 2021 is to unlock further opportunities.
“We’ve seen the resurgence of the P&C channel as a true convenience destination for consumers as they begin to value convenience and locality more – largely driven by the need/preference to stay within their communities and avoid congested environments,” says Fielder.
“This behaviour for many has stuck. We have also seen the shape of some beverage categories evolve due to changes in consumption occasions. ‘In-home’ occasions have become stronger in the P&C channel while some ‘out of home’ occasions are challenged on the back of workplace transitions, travel, and tourism, and general ‘on the go’ occasions changing quite significantly.
“In general, the beverages category has been relatively buoyant since lockdown lifted in 2020 and the category seems to be good shape. Our focus for 2021 will be very much continuing to work closely with our retail partners to unlock further growth opportunities for the P&C channels and to keep shoppers excited with our ever-evolving NPD pipeline.”
What were the highlights in 2020?
- Winning several awards at the 2020 NZACS Industry Awards Event (Supreme Supplier, Best Head Office Service and Support, Best Service to Stores, and Best Delivery Service).
- Delivering another year of value growth to the P&C channel despite the challenging retail environment.
- Despite suffering more than a 30% revenue drop during the first lockdown, we were able to keep all our people employed and paid in full throughout the turbulent year.
- We repaid the $7.2m we received from the COVID-19 wage subsidy in full.
- We met our recycled plastic ambition and achieved using 100% recycled plastic in all our bottles under 1L and our water bottles across all sizes.
- Being accredited as one of Australasia’s Best Employers for the fifth straight year.
A journey of sustainability
Sustainability is a constant evolution for CCEP and the business has made some significant and market leading steps in its journey.
- CCEP recently announced its 2020-2040 sustainability ambitions, including net zero carbon emissions by 2040.
- In 2020 the business met its recycled plastic ambition and achieved using 100% recycled plastic in all its bottles under 1L and water bottles across all sizes.
- CCEP is supportive of a well-run, not for profit Container Return Scheme in New Zealand, working with government, industry and other stakeholders to help create a best-in-class scheme.
- The business now has a reduced, low, or no sugar variant in all its popular brands and has plans to take this further with a target of 20% reduction in sugar grams per 100ml by 2025 in NZ.
- Through the Coca-Cola Foundation, it has provided a grant to local environment group ‘Sea Cleaners’ worth more than $300k every year since 2018.