Coca-Cola’s Crown Beverages offloads alcohol distribution deal to focus on bottled water business

KENYA – Crown Beverages, a subsidiary of Coca-Cola Beverages Africa (CCBA) and one of the most reputable bottlers of natural mineral water in East Africa has announced that it is seeking to exit the alcohol distribution business to focus on its bottled water business.

“We have seen opportunity in non-alcohol beverages drink categories to be our core business and we can explore more of this. We have decided to focus our assets and investments into these categories.”

CCBA Kenya Managing Director – Xavier Selga

This comes two year after the company inked a deal with Italian branded beverage firm, Campari Group, to distribute premium alcohol brands in Kenya.

The agreement covered the distribution of Glen Grant Single Malt Whisky, Old Smuggler blended Scotch Whisky, Bulldog Gin, SKYY Vodka and Campari Aperitif among others.

“We are exiting that part of the businesses and are in process of depleting the stock,” said CCBA Kenya managing director Xavier Selga.

According to reports by Business Daily, the move has been triggered by CCBA seeing investable opportunities in the non-alcohol beverage drink category.

In addition, the beverage company is seeking to add dairy segment and hot beverages including tea and coffee to its products portfolio, in line with changing consumer preferences.

“We have seen opportunity in non-alcohol beverages drink categories to be our core business and we can explore more of this. We have decided to focus our assets and investments into these categories,” said Selga.

Mr Selga said the firm will execute the investments either through in-house processing or through alliances with co-packers.

This will see the company invest up to US$50 million (Sh5.43 billion) in the plans in the next three years and about US$80 million (Sh8.69 billion) in the next five years.

The global firm, Coca-Cola Company has managed to produce dairy products in other markets like Nigeria, US and India under brands such as Fairlife and Hollandia.

Crown Beverages, which sells the Keringet bottled water brand, became part of the Coca-Cola family following the merger of SABMiller Plc, The Coca-Cola Company and Gutsche Family Investments (GFI) operations in Kenya in 2017, forming CCBA.

After a partnership with local brewer East African Breweries Limited (EABL) fell apart, SABMiller exited Kenya in 2002 but made a quiet re-entry by acquiring the family-owned Crown Beverages Limited.

CCBA Kenya launches COVID-19 recovery campaign

Recently, CCBA partnered with financial services group Absa Group, health service provider Amref Health Africa, and Women Enterprise Fund (WEF) to support over 18,000 eateries and all official Coca-Cola distributors across the country. 

To spear head this initiative, the Coca-Cola System has committed KSH 125 million (US$1.15m) to support small and micro businesses to recover and re-open after the impact of COVID-19 on the economy that saw most of them lose revenue and close.

Under the campaign ‘Open Like Never Before’, the partnership is geared towards helping the food-outlets meet the strict COVID-related safety regulations as well as funds to restock their businesses.

In terms of financing, the soft drinks manufacturer has opened its trading partners’ transactional financial data for use by listed lender Absa Bank Kenya in disbursement of business continuity loans.

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