Energy drinks are fastest-growing products in Africa, says Coca-Cola's local bottler

January 20, 2022

As Coca-Cola Beverages Africa (CCBA) prepares to list on the JSE this year, the company says it plans possible "consolidation" on the continent and to capitalise on strong African demand – especially for energy drinks, which is the fastest-growing drink category.

Last year, American giant The Coca-Cola Company announced that it will list its African bottling operation in Amsterdam and on the JSE this year. Bloomberg previously reported that the listing could be worth €7 billion (~R122 billion) – the same size as Shoprite.

The company hosted a "Capital Markets Day" - an online briefing for potential investors, analysts and the media – this week in preparation for its listing.

"We want to unlock what we see as a significant African growth potential for CCBA," CCBA CEO Jacques Vermeulen told the briefing. CCBA operates in 14 countries. Its six key markets are South Africa (its largest and most established market), Kenya, Ethiopia, Uganda, Mozambique and Namibia.

He sees Africa's young population and growing urbanisation on the continent as benefiting CCBA's growth trajectory, offering the  potential for increased per capita consumption, including in the categories of juice, water and energy drinks. Energy drinks is the fastest growing soft drink category in Africa.

Coca-Cola owns a stake in the world’s second-biggest energy drink brand (after Red Bull), Monster. It is also Monster’s official distributor.

CCBA is the largest bottler of non-alcoholic ready to drink beverages in Africa. It accounts for more than 40% of The Coca-Cola Company's African volumes. CCBA is also the eighth largest Coca-Cola bottler by revenue globally.

"The Coca-Cola Company has elected us as its partner to drive further consolidation on the continent and create greater cost efficiency. We will, therefore, invest in opportunities that might arise," said Vermeulen.

"Since 2019 we have been reshaping our operating model to build a better, smarter and faster world class bottler. Our end-to-end digital transformation is also well underway and will provide more consumer insights," said Vermeulen. "CCBA has a deep knowledge of doing business in Africa and we foresee significant opportunities to consolidate the continent's fragmented bottling landscape."

He says the company plans to further invest in opportunities that might arise. "For many years we have already been operating and reporting like a listed company and learnt from global best practice. We have a very strong balance sheet and can leverage that for acquisitions which fit our profile," said Vermeulen. 

CCBA CFO Norton Kingwill said that CCBA cannot continue with a strong growth trajectory without investment. "Our track record gives us confidence. We have been successful in Africa for a long time and can deliver a growth story," he concluded.

CCBA - described during the briefing as "born and bred in South Africa" – was listed on the JSE in a previous iteration, Amalgamated Beverage Industries (ABI). It was delisted in 2004, after SABMiller bought out minority shareholders. 

Then in 2016, CCBA was established after SABMiller merged ABI with the Coca-Cola Company’s Southern and East Africa bottling operations. In the following year, the US giant bought SABMiller’s 55% stake in CCBA for $3.15 billion after that company was taken over by Anheuser-Busch InBev.-fin24

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Last modified on Thursday, 20 January 2022 16:24

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