For Frucor Suntory CEO Darren Fullerton, the partnership with Beam Suntory to create Suntory Oceania, a $3 billion beverage giant, is an opportunity to realise and go beyond the potential of its existing brands and business goals. Fullerton spoke to Food & Drink Business editor Kim Berry.
The announcement on 3 August was “extremely exciting” for Fullerton not just because it was the great reveal but because of what the partnership means.
“It is about bringing the best of Suntory to the region. We talk about it in terms of by coming together we are greater than the sum of our parts. This gives us the opportunity to realise the full potential of our existing brands and categories but to also go beyond it. The technology and innovation that is coming out of Suntory is amazing, and it is our intent to bring that to Oceania,” Fullerton said.
It was only March last year that Frucor Suntory came hot out of the gate with news of a massive investment in Australia and word it was embarking on significant expansion.
Fullerton had been at the helm for less than two years but had come to the role with 18 years at PepsiCo ANZ in its beverage and snacks division. (Sidebar: In 2001, Fullerton was part of the original project team that developed Red Rock Deli Chips, which culminated in PepsiCo’s major investment in the world’s first continuous kettle fryer and created a powerhouse brand.)
“When I joined, there was an overarching theme that the company was a great business and had huge potential, but it hadn’t transformed enough for that potential to be realised,” he said.
Fast forward 16 months, and he – along with Beam Suntory’s CEO Mark Hill – are announcing a $3 billion beverage business.
“It’s amazing how fast things can move,” he said.
It’s all in the timing
For Beam Suntory, the end of its contract with Coca-Cola Europacific Partners (CCEP) was on the horizon – June 2025 for Australia and December 2025 for New Zealand – and as is the standard practice at such a time, discussions were had about the pros and cons of both renewing or ending the deal.
The two had been in partnership for 16 years, with CCEP responsible for the sales and distribution of the Beam Suntory spirits portfolio, as well as the manufacture, sales, and distribution of its alcoholic RTD portfolio in Australia since 2007 and New Zealand since 2015.
Meanwhile, Frucor Suntory’s Auckland facility was at capacity and under a great deal of operational pressure.
The announcement of the company investing $400 million in a beverage production facility in Ipswich, Queensland sent a clear message it was ready to establish a production footprint in Australia to relieve pressure on its New Zealand operations and fuel growth.
At the time, Fullerton told Food & Drink Business, “The Ipswich facility reflects the huge potential we see in becoming a much broader, multi beverage player as we grow our Australian footprint.”
Suntory Beverage & Food (SBF) APAC CEO Taka Sanno said, “We see outstanding growth opportunities and world class talent across the Oceania region and this facility plays a critical role in realising our plans.”
And so, it has come to pass.
“The timing was right,” Fullerton said. “Beam Suntory was looking to gain more agility and bring more innovation into its operations, and we recognised the immense potential of the region we were yet to access. The timing was right to invest in this part of the world.”
“While we are two separate entities, Suntory Oceania will look and feel like one organisation. Our intention is to co-locate and the team responsible for making that happen is already working on how to make it happen.
“We want to demonstrate how these partnerships can create value,” he said.
Core business
Between the two companies there are just over 1000 employees and the partnership will add around 400 new roles. There is a focus on “upgrading talent” and attracting high calibre candidates.
For Fullerton, that requires three criteria: opportunity to work on a broad range of categories and with aspirational brands, and to move within the organisation for career development and advancement; having the right location for headquarters; and to have embedded, qualifiable, and quantifiable ESG principles.
“Sustainability is part of Suntory’s DNA. It has deep seeded historical value in the company, with its ‘Growing for Good’ vision applying to the planet and its natural resources but also to humanity. Suntory Beverage & Food APAC has been joined at the hip with us to make the new facility best in class,” he said.
When the project was announced, SPF APAC CEO Sanno said, “In line with our Suntory ‘Growing for Good’ vision, we want the new facility to set a benchmark for our investment into sustainable technologies to drive efficiency and minimise our carbon footprint.”
Fullerton said the company had recently recruited a new person for head of environment, to recraft its strategy now Suntory Oceania is a reality.
Meanwhile, the build at Ipswich is rocketing along. The multi-beverage facility is on a 17-hectare, greenfield site in the New-Gen Business Park and will include beverage processing, packaging, warehousing, and distribution. It will be able to product up to 20 million cases of drinks a year when it opens in mid-2024.
“We are well and truly on track. It’s all heavy equipment and cranes, the steel frame is up, the roof is about to go on, and there’s 12 alcohol tanks on site. It is remarkable to think last year it was a block of dirt,” he said.
Apart from its size – it will ultimately scale to process 50 million cases a year – it is the environmental credentials that shift the site into another league.
Designed as a net zero facility, Fullerton said there is a chance it could be net positive as the original plans get upgraded with new state-of-the-art technology for efficiency.
The expectation is the site will become operational with some of Frucor Suntory’s range in September 2024.
Ultimately for Fullerton, the launch of Oceania Suntory and the Ipswich facility’s progress capture the potential of the company and its ambitious future.
“We’ll be able to come in, accelerate, and disrupt, which is very exciting,” he said.
