Carlsberg announced that it had reached an agreement with the United Nations. Britvic acquires BritvicAfter two unsuccessful bids of PS2.99 billion (3.8 billion) and PS3.1 billion (4 billion) in June, the deal was finally concluded with an offer of PS3.3 billion. The deal was ultimately concluded with an offer of PS3.3 billion ($4.23 billion).
Carlsberg's portfolio includes a small number of non-alcoholic soft drinks and beers, but these remain very minor. The shift toward soft drinks is significant and reflects a broader shift away from beer by brewers.
Soft drinks: a new alternative to beer
Carlsberg isn't the only one looking beyond beer. Numbers are at the heart. Carlsberg has ambitious plans for growth: 4 to 6 % per year until 2027. This is ambitious, because the statistics for the beer category as a whole are less optimistic: the UK beer industry declined in volume in 2023. The category faces the fact that consumers are spending less due to inflation, but are also avoiding alcohol altogether.
Heineken is among the brewers looking to expand their portfolio beyond beer. a brand of hard seltzerMolson Coors is exploring different product categories, including Functional drinks and energy drinksAB InBev varies From wine to Kombucha).
Carlsberg has its eyes on soft drinks. The UK may be able to create change in Western Europe.
Soft drinks are available as an alternative to beer for various occasions. It is becoming more and more common to mix beer with other soft drinks, such as lemonade and beer. “under-explored opportunity”Mintel suggests that brands should engage consumers by introducing a low-alcohol drink (for example, 79 % are interested in classic mixed drinks like shandy).
The Britvic brand portfolio is also impressive. Britvic offers a range of brands including well-known British names such as Robinsons, Tango and J2O. It also holds an exclusive license with PepsiCo for brands like Pepsi MAX and 7UP.
PepsiMAX, a sugar-free drink with a growing share of the UK cola market (from 12.9 1TP3Q to 30.7 % by 2023), is an important brand. Its only rival in the UK for cola sales will be Coca-Cola. Carlsberg is also exploring the market potential for sugar-free drinks, which account for 67 % of cola sales in the UK, compared to just 33 % of regular cola sales.
The PepsiCo partnership is also a key element of this acquisition. Britvic will allow Carlsberg to sell PepsiCo in the UK. The two companies have a long-standing business relationship.
PepsiCo endorsement
PepsiCo has approved Carlsberg's purchase of Britvic.
Silviu Popovici is the CEO of PepsiCo Europe. He said: “We are confident that the merger of Carlsberg with Britvic will result in even greater sales and distribution capacity for our brands in important markets. »
We look forward to expanding this partnership in the future to other important markets.
Carlsberg will become PepsiCo's largest bottler in Europe. The acquisition will expand the partnership between Pepsi and Carlsberg across five to seven markets.
Carlsberg says other territories could be added in the coming years.
Britvic has also recently diversified into other areas, such as plant-based dairy (via Plenish) and iced espresso (acquiring Jimmy's Iced Coffee by 2023). The portfolio strategy seems to be bearing fruit: turnover in 2023 amounted to 1.75 billion PS, with growth of 6.6 1TP3Q year-on-year.
Carlsberg takes over Britvic's businesses and brands to create an integrated drinks company called Carlsberg Britvic in the UK.
This company will be able to offer a range of premium quality brands in both the beer and soft drink categories.
Beer and soft drinks are a great combination.
Carlsberg considers soft drinks to be an important part of the Western European market. Soft drinks already represent 16 % of the company's total volume.
By acquiring Britvic, which is exclusively a soft drinks company, it creates a portfolio with approximately 30 % of soft drinks in its volume.
Cost synergies
Carlsberg's acquisition of Britvic is expected to generate PS100 million in cost synergies. Of this amount, 80 million PS will be realized at the end of the third year and the remaining 20 million PS will be realized by the fifth year.
Beer and soft drinks have a lot in common in the beverage industry: they both create synergies and can save money. Britvic's acquisition of Carlsberg UK is expected to have a "transformative" effect on the business. This will create a “very attractive scale multi-beverage supplier”.
Take for example the R&D department: it will be able to collaborate with other departments and share resources in areas like sustainability and taste combinations.
There is also the logistics and distribution aspect: this can be improved by combining warehousing with inventory management. It could even improve the economy or serve smaller customers.
The cans are used to serve beer as well as sodas. This creates an opportunity to can beer and soda on the same canning line.
Carlsberg on Monday announced its agreement to purchase Marston Brewing Company's 40 % share in Carlsberg Marstons for PS206 million. This will help create synergies.
This company was formed in 2020 through the merger between Carlsberg UK and Marston's Brewing Company. Carlsberg can integrate its business interests in the UK by taking charge and integrating them all.
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