With Coca-Cola’s acquisition of Billson’s Beverages finalising, Coca-Cola Europacific Partners (CCEP) is taking on the responsibilities of sales and distribution for the brand’s range of alcoholic ready-to-drink (ARTD) beverages. In an exclusive with Food & Drink Business, CCEP general manager – Licensed, Australia, Mitchell Lenaghan, and Coca‑Cola vice president of ARTD, ASEAN and South Pacific (ASP), Matthias Blume, explain what it means for the business.
The Coca-Cola Company acquired Billson’s Beverages brand late last year, after it had gone into voluntary administration in July. The family-owned company was based in Beechworth, Victoria and had been operating for seven years.
Billson’s had run into financial trouble and underwent two restructures, laid off half its workforce (100 employees) and “tried everything imaginable over the past six months” to avoid going into administration.
But its banker, NAB, enlisted McGrathNicol to review Billson’s finances, capital, and short-term cash flow. The six-week review resulted in McGrathNicol being appointed administrator.
When Coca-Cola announced the acquisition, Blume said they were excited about adding Billson’s to its Australian brands.
“This acquisition allows us to expand in the dynamic and growing alcoholic ready-to-drink category in Australia and aligns with our vision to provide a beverage for every occasion, always keeping the consumer at the centre of everything we do.
“Of course, we know that offering options with alcohol brings new responsibilities for us, and we take these seriously. Our Responsible Alcohol Marketing Policy determines how we responsibly go to market with alcohol brands,” Blume said.
What does the acquisition signify for Coca-Cola and CCEP?
Lenaghan: Integrating the much-loved Billson’s range into our portfolio is a taste of what the future holds for CCEP’s participation in alcohol in Australia. Supporting the Billson’s brand aligns with our future growth aspirations in the category and our business ambition to strengthen our strategic alignment with The Coca-Cola Company (TCCC), our major brand partner.
This year marks the end of CCEP’s 19-year partnership with Beam Suntory - what are CCEP's plans to leverage the manufacturing, sales relationships, and industry knowledge it has built over that time?
Lenaghan: We have five months until our 19-year partnership with Suntory Global Spirits (SGS) comes to a close. It will mark the end of a significant chapter in the history of our business, and one that we are very proud of.
For close to two decades, we have worked together to successfully grow some of the biggest brands in alcohol, such as Jim Beam and Canadian Club, and launch innovations that have shaken up the ARTD landscape, exemplified by Minus 196.
Throughout this journey, we’ve strengthened our category knowledge and depth of expertise across all aspects – manufacturing, sales and distribution – and provided our customers with a high-standard of service, guided by a relentless ambition to deliver mutual growth.
This doesn’t change beyond 30 June. We plan to participate in the alcohol category, harnessing our energy, enthusiasm and expertise to break new ground together with our brand partners, including The Coca-Cola Company.
Blume: Since launching Lemon Dou in Japan in 2018, Coca-Cola has expanded its ARTD portfolio to more than 30 markets globally, delivering considerable ARTD growth worldwide, and we're excited to continue this success in Australia.
Where will the brand’s ARTDs be manufactured? What does CCEP envisage in terms of its potential/growth?
Lenaghan: The manufacturing of Billson’s ARTD products will continue to reside with one of its existing co-packers based in Victoria, Garage Beverages.
Our focus is on setting the brand up for success from a sales and distribution perspective, involving integrating Billson’s ARTD products into our established systems and processes as quickly as possible to ensure a smooth transition and a good experience for our customers.
Our exceptional sales and logistics teams are well-positioned to support the brand, and we look forward to collaborating with The Coca-Cola Company to bring Billson’s innovative and great-tasting products to an even broader audience.
Blume: Billson’s is a leader in Australia’s dynamic and rapidly growing ARTD market and this move not only strengthens our presence here in Australia but also aligns with our broader global strategy to lead in the ARTD space.
Australia is one of the most developed markets for ARTDs, what opportunities and challenges does that present for CCEP?
Lenaghan: While Australia may be considered one of the most developed markets for ARTDs, there remains plenty of growth potential. According to Roy Morgan’s Alcohol Consumption Report Sept 2023, the number of consumers drinking ARTDs doubled between 2020 and 2023, and this growth is expected to continue. IWSR figures forecast ARTDs out-performing the rest of the liquor market from 2024 to 2028 (RTD +4.6% vs Total Liquor +1.4% in value).
It’s an incredibly explosive category with lots of opportunity, particularly with respect to innovation. It’s also a category that consumers are highly engaged in, and they are open and willing to try new offerings. The enthusiasm we’ve seen from the devoted Billson’s ‘flavour chasers’ is great evidence of this.
The key challenge for us is navigating the change in portfolio. For many years, we’ve manufactured, sold and distributed some of the most popular alcohol products in the market. During this time, we’ve been able to accomplish some outstanding results; achieving number one ARTD supplier in Australia for the first time ever in 2022 was a particular highlight.
Ed: The top five RTD suppliers in Australia are CCEP, Diageo, CUB, Asahi, and Campari.
When our successful 19-year partnership with Suntory Global Spirits comes to a close at the end of June, we’ll enter new territory where we’ll be building a new alcohol portfolio from the ground up. This challenge is also an opportunity, and we are in the fortunate position where we can collaborate with brand partners, including The Coca-Cola Company, to forge a new path for our business in alcohol.
We'll have the hunger and drive of a challenger brand, with the expertise of a seasoned market-leader. Our portfolio will change, but our commitment to our customers won’t, and we will continue to harness our depth of category knowledge and excellence in manufacturing to affirm our position as a player in the category for years to come.
Blume: We know Australia is quite sophisticated when it comes to the ARTD category and has some of the highest standards when it comes to advertising and selling alcohol. With Coca-Cola's global success in more than 30 markets, we can ensure our brands and ARTD experience along with our partnership with our bottling partners we can ensure we continue this success.
Billson’s founders, Nathan and Felicity Cowan will continue to produce cordial, soda, and beer under a new brand name, and run their hospitality business in Beechworth.
“We are thrilled to have entered into an agreement to sell the Billson’s brand and ARTD range to a company like Coca‑Cola,” Nathan Cowan said. “We wholeheartedly believe that the brand is in the best possible hands for it to thrive long into the future.”
Felicity Cowan said, “This will allow us to dedicate ourselves to what we love most: the Beechworth venue experience and our historic cordial range. We’ll also have more time to focus on our passion for soda, liqueurs, beer and alpine spring water.”
