A new $3bn drinks giant is launching in Australia, with Suntory merging its alcohol business, Beam Suntory, with the non-alc Frucor Suntory, which will create the fourth-largest ANZ beverage group in Oceania.

The new business, Suntory Oceania will have full end-to-end control of its portfolio, including manufacturing, sales, and distribution and preparations are now underway to ensure the partnership is operational for mid-2025 in Australia and 2026 in New Zealand.

Suntory Oceania’s 40 market-leading brands will include Jim Beam and Maker’s Mark Bourbon, Hibiki Japanese Whisky, Canadian Club Whisky, -196, V Energy, Maximus, Suntory Boss Coffee among many more, and spans premium spirits, RTD (ready-to-drink) alcohol beverages, juice, water, soft drinks, coffee, energy and sports drinks.

Mark Hill, Managing Director of Beam Suntory Oceania, explained the history of the business in Australia to National Liquor News, and why the decision was made to make this change.

“Suntory was founded more than 120 years ago and the Suntory Group is now the sixth largest beverage manufacturer with operations in more than 120 countries with over 300 brands,” Hill said.

“In this market, Frucor joined the Suntory Group in 2009 and Jim Beam joined through the acquisition in 2014 and operates under the Beam Suntory brand.

“Locally, we’ve been operating independently but today we’re announcing the creation of Suntory Oceania. By bringing our two businesses together we’re going to create a $3bn multi-beverage group across Australia and New Zealand.”

He added: “Both businesses have been outperforming in this market across key segments and we see the combination of us coming together as providing us with greater agility in our supply chain and also more strategic with the portfolio innovation that we’ll be able to bring.

“Our belief is that with our combined offerings we’ll be able to unlock not only the next wave of growth in core markets, but we will also be able to see growth in adjacent categories as they unfold.

“The businesses will still be separate legal entities with separate leadership teams and separate business plans and making key strategic decisions. Both businesses will still be accountable to their respective brand owners but all within the Suntory Group. But we’ll be driving a single culture across the two businesses, because coming together with a sister company, we already share the same vision and values.”

In terms of opportunities for growth that will arise from the uniting of the two businesses, Hill said that there will be a greater opportunity to bring the best of Suntory’s global portfolio to Australia.

“We strongly believe that we’ll be able to identify new areas of growth,” Hill told NLN. “One area we often talk about is trying to bring the best of Suntory to ANZ and a good example is our -196, which we took Suntory’s leading RTD in Japan and brought it here a couple of years ago, and it’s performed extremely well to the point that it is the number two RTD in the light segment in 2022 it was the brand that contributed the largest amount of growth to that whole category. And we see more opportunities of being able to do that and bring more products that are localised to the consumer palate.”

The Suntory announcement brings to an end the 16-year partnership that Beam Suntory has had with Coca-Cola Europacific Partners (CCEP), with the contract expiring on June 30, 2025.

CCEP’s Regional Managing Director for Australia, Pacific and Indonesia, Peter West said: “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.”

Hill added: “I would like to say up front that we’ve had a long and successful relationship with CCEP and for that we are very thankful. And the new partnership between Frucor Suntory and Beam Suntory will come into existence when the existing contractual arrangements with CCEP expire.

“It’s business as usual for our customers until that transition. It’s a hugely exciting moment for our business.”

CCEP said that it plans to continue to participate in alcohol beyond the expiry of the Beam Suntory contracts and views alcoholic RTD beverages as an attractive proposition given its explosive growth in Australia and New Zealand.

West said: “Our understanding of the spirits and alcoholic RTD market has never been stronger, and beyond the expiry of the Beam Suntory contracts we plan to launch new scalable offerings in both Australia and New Zealand aligned with The Coca-Cola Company.

“Alcohol is a dynamic and important category, and when you look at the growth in alcoholic RTD beverages around the world, two of the most developed markets are Australia and New Zealand. CCEP’s experience in manufacturing alcoholic RTD beverages, our relationships servicing over 21,000 customers across the sector, and our deep consumer and customer knowledge all position CCEP well for a great future in alcohol.”

Suntory added that it plans to expand its current workforce and will be hiring over 400 roles as the partnership comes to life in 2025 and that further work to establish the partnership will occur over the coming year with each partner, Beam Suntory and Frucor Suntory, retaining its own distinct legal entity.

Deborah Jackson

Deb joined Intermedia in 2015 as Editor of National Liquor News and Deputy Editor of The Shout. Since then, she has also worked as the Editor of Beer & Brewer and the New Zealand title, World of Wine....

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