Beam Suntory and Frucor Suntory create $3bn multi-beverage Suntory Oceania

Following news that Coca-Cola Europacific Partners (CCEP) and Beam Suntory will part ways in 2025, Beam Suntory spirits and non-alc Frucor Suntory announce Suntory Oceania, a new AU$3bn multi-beverage partnership.

Operating across premium spirits, Ready-to-Drink alcoholic beverages, juice, water, soft drinks, coffee, energy and sports drinks, the new conglomerate become the fourth-largest ANZ beverage group with full end-to-end control of its portfolio.

Mark Hill, Managing Director of Beam Suntory Oceania told Drinks Trade why it made sense for the two sister companies to merge across the Australia and New Zealand market.

"Suntory has got these two businesses down here and both those businesses are leaders in [their] own right, but we're always looking for new ways to amplify the scale and expertise of Suntory.

"We've got unique growth opportunities here in Oceania with our product offering and we believe we can unlock a lot by coming together with end-to-end control," he said.

Suntory Oceania said preparation will start now to ensure the partnership is operational for mid-2025 when Beam Suntory's contract with CCEP ends in Australia on 30 June 2025 and in New Zealand on 31 December 2025.

Darren Fullerton, CEO of Frucor Suntory, said the new venture will bring the best of both companies to Oceania.

"With the ability to accelerate our growth trajectory, we strongly believe it will redefine market dynamics and offer more consumer beverage moments from sunrise to sunset, unlocking innovation for our customers across retail and hospitality industries," he said.

The combined power of Suntory Oceania will feature 40 well-known brands like Jim Beam and Maker's Mark Bourbon, Hibiki Japanese Whisky, Canadian Club Whisky, -196, V Energy, Maximus, Suntory BOSS Coffee and many more.

To augment their current operations in Auckland, the construction of a new AU$400M, net zero facility in Ipswich, Queensland, represents the most significant FMCG investment in Australia in over a decade and will facilitate the partnership's growth ambitions.

The Ipswich site will house an additional beverage processing, packaging, warehousing, and distribution centre and will be operational in mid-2024 with the ability to produce 20 million cases on start-up and over 50 million cases in the future.

"The new site sets the industry standard in terms of investment into sustainable technologies to drive efficiency and minimise our carbon footprint. We are looking at a multi-pronged strategy through a CleanCo solar power purchase agreement, over 14km of solar panels on site, biomass boiler and state-of-the-art production equipment," said Fullerton.

This announcement means to end of a 16-year partnership between Beam Suntory and CCEP, which will come to a close when the current contract expires on June 30, 2025.

"I'd like to really highlight that we've had a long term, successful relationship with our current partner CCEP, we're very thankful to them for the support that they've given us over that period of time," said Hill.

Since 2007 in Australia and 2015 in New Zealand, CCEP has been responsible for the sales and distribution of the Beam Suntory spirits portfolio and the manufacture, sales, and distribution of its Ready-to-Drink (RTD) portfolio.

Peter West, Regional Managing Director for Australia, Pacific and Indonesia at CCEP, said the partnership between the companies had successfully driven strong growth in the spirits and RT categories in the region.

“We are incredibly proud of the results and capabilities we have built over the last 16 years. It’s been an exceptionally successful partnership, achieving rapid growth and driving strong category leadership, including recently becoming the MAT market leader in alcoholic RTD in Australia.

“Until the contracts end, it remains business as usual for our customers and the great service we deliver. We intend to continue maximising our business performance and the category performance for the remainder of the contracts,” he said.

Post break-up, CCEP plans to launch new “scalable offerings” using their understanding of the market in collaboration with brand partner The Coca-Cola Company to make the most of the explosive growth of alcoholic RTD beverages in Australia and New Zealand.

"With Suntory Oceania, we are looking to the future with optimism and a wholly owned platform from which to build the long-term growth of our brands for years to come. It is the perfect opportunity for us to build upon the strength of Suntory as the global leader across the beverage sector," concluded Hill.

Featured Image: Darren Fullerton CEO Frucor Suntory Oceania (L) and Mark Hill Managing Director Beam Suntory Oceania (R).

Stay up-to-date with the latest industry news with the Drinks Trade e-newsletter.