The Beverage Company / Enterprise Africa August 2021

T H E B E V E R A G E C O M PA N Y

THE BEVERAGE COMPANY

Essential Refreshments

Keep BevCo Sparkling PRODUCTION: William Denstone

The Beverage Company (The BevCo) was founded just three years ago, but packs the punch of combining two of South Africa’s largest manufacturers and brand owners.

Bringing together important brands, infrastructure and experienced workforce, it was just the foundation required for the newly-formed BevCo to launch its own challenge on the established market order, thriving in one of the few sectors able to continue trading largely unfettered and even show signs of growth amid the chaos of recent months.

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INDUSTRY FOCUS: FOOD & BEVERAGE

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Once pegged as the country’s next big market, South Africa’s alcohol industry is now facing what Beverage Daily calls an ‘economic abyss’. Many businesses are on the brink of collapse in large part due to the repeated bans on the sale of alcohol now totalling well in excess of 100 days since March 2020.

Rising Covid-19 case numbers and increased pressure on the country’s health services have led to strict sanctions on the purchase and consumption of alcohol throughout the pandemic to date; suddenly, no longer was it permitted to sit at a bar and order a glass of wine, nor even buy beer at a store.

COVID-SAFE SECTOR With a void like this left in the overall beverage market, the soft drinks sector has been able to weather the catastrophic impact of the Covid-19 pandemic on many sectors, going as far as to even achieve marginal growth of 0.7% year-on-year between 2019 and 2020, and expected to grow at a 1.5% CAGR between 2021 and 2025, according to Insight Survey’s latest South African Carbonated Soft Drinks Industry Landscape Report 2021.

There can never have been a better time than this to be classed

as an essential commodity, and this billing has meant that soft drinks have been among a select group of products whose movement and availability has been unrestricted during lockdown. The classification has kept them on the shelves and in the fridges of the relatively few retailers which have remained open and sold across retail outlets, immune to the disruption and closures which have plagued so many other markets in this unprecedented epoch.

Additionally, a definite movement towards health and wellness has resulted in the emergence of nonalcoholic beverage alternatives, a trend again bolstered by the country’s Covid19-related alcohol drought.

TOP OF THE POPS Only forming in 2018, The BevCo is the product of a merger of Little Green Beverages and SoftBev, a combination which affords it a rich, staunchly South African heritage. Little Green Beverages was founded in 2006 in Robertville, Western Johannesburg and began producing a limited, select range of carbonated soft drinks in early 2006, the pinnacle of which has to be the universally adored Refreshhh brand.

On sale from South Africa to Mozambique, and everywhere in

// OUR CUSTOMERS AND CONSUMERS SIT AT THE VERY HEART OF OUR BUSINESS // between, the celebrated brand now comes in a raft of 14 flavours, in sizes from two litres to a 330ml bottle, and is continually broadened with additions like energy drinks, mixers and mineral waters.

SoftBev, meanwhile, brought to the mix over 50 years of combined industry experience. A business built on quality, independence and diversity, Softbev was the producer of South Africa’s much-loved Coo-ee and Jive brands, as well as the famous Pepsico franchise brands 7UP, Capri-Sun, Mirinda, Mountain Dew, Pepsi and Pepsi Max. With this enviable head start, which included not only this stuffed portfolio but also five excellent manufacturing plants, 1000 employees and nationwide coverage, The BevCo has wasted no time at all in becoming South Africa’s leading independent manufacturer and distributor of carbonated soft drinks, energy drinks, mixers and still beverages.

“Our customers and consumers sit at the very heart of our business,”

Isando Johannesburg

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INDUSTRY FOCUS: FOOD & BEVERAGE

the company states, “and we aim to delight them with excellent products at an excellent price and with excellent service.”

Rising to the fore over the course of the Covid-19 pandemic have been the locally-produced beverages which proliferate in South Africa, safeguarding them against distribution logistics which have been severely

// ALL OUR BRANDS HAVE BECOME TRUSTED HOUSEHOLD NAMES THAT ARE OF SUPERIOR QUALITY //

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affected. This has suited The BevCo down to the ground, with its concerted effort to not focus solely on the established, global champions of the market but also on an array of the most beloved local heroes in South Africa.

“For us,” former CEO Michael Benjamin outlined when we spoke in 2019, “our vision has always been around promoting local heroes and global champions, and that gives us a unique capability that other beverage companies do not have. No one has the portfolio diversity that we have,” he stressed.

“Each [brand] has its own heritage and personality,” The BevCo goes on, “some formed through South African culture and others through international influence. All our brands

INNOVATIVE.

Progress is part of our DNA.

We have been developing innovative packaging solutions since 1955 and treading new paths along the way.

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have become trusted household names that are of superior quality.

We strive to enhance the lives of our consumers by offering choice and variety at an affordable price.”

KEEPING THINGS FRESH Innovation can mean many things in the world of soft drinks. It is the ability to respond to sometimes sudden, and sometimes drastic, changes in the market and seize upon the opportunities such shifts present. Although important, strong retail promotions are not going to be sufficient alone to achieve the robust market growth forecast; this is also being driven by the launch of innovative carbonated soft drink products and concepts.

THE BEVERAGE COMPANY

INGREDIENT INNOVATION C

THAT’S VALUE DRIVEN

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Globally, this is embodied by the introduction of innovative packaging, catering to the rising demand for sustainable and eco-friendly practices.

The BevCo has always recognised the important role it has to play in South African society, actively considering and implementing initiatives which positively impact the lives of staff, their families, surrounding communities and the wider environment.

“We are committed to deliberately innovating our business, products, operations and supply chain,” the company clarifies, “so that we can reduce any negative impact on the environment and actively consider the health and well-being of the consumers of our products.”

In South Africa, as well as the impact of the Health Promotion Levy, or sugar tax, recently introduced to

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impose a 10% levy on beverages above four grams of sugar per 10cl, more local consumers are also demanding wellness-focused beverages. This has resulted in the introduction of healthier alternatives, including reduced-sugar variants, as well as zero-calorie and fortified carbonated soft drink options.

In typical fashion, The BevCo embraced the principles of this legislation and was way ahead of the curve in adapting to it. “We were already working on our product formulas to make sure that we were compliant with legislation while still delighting our consumers with the quality, flavour and value of our beverages,” the company makes clear, pointing to the example of its hugely successful reformulation of Reboost, which tests showed the vast majority of participants to prefer over its sugar-loaded predecessor.

The perfection of this pairing of a shift towards healthier alternatives with unprecedented constraints on alcohol could almost not have been written, and is sure to keep the BevCo busy and innovating well into its sparkling future.

“Our driving mantra is about giving consumers choice,” Benjamin rounded off. “If our choices are not good enough then they will migrate and enjoy other things.” Through both conscious choice and necessity that choice is firmly in the soft drink arena now, and The BevCo has shown that it has everything needed to keep it that way as we enter the new order of post-pandemic life.

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August 2021

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ENTERPRISE AFRICA

AUG UST 2021