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Nestlé and Coca-Cola: Joint venture to tap rapidly growing beverage segments

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The Coca-Cola Company and Nestlé S.A. announced today the further development of their existing joint venture partnership, Coca-Cola and Nestlé Refreshments (CCNR).

The co-operation will be renamed Beverage Partners Worldwide (BPW) and function as an entrepreneurial unit dedicated to tapping the growth potential of emerging beverage segments, particularly ready-to-drink coffee, teas and beverages with a healthful positioning. A highly successful co-operation formed in 1991, CCNR currently operates directly in 24 countries and enjoys a strong position in the ready-to-drink tea category. CCNR will serve as a solid initial foundation from which Beverage Partners Worldwide will actively expand into new beverage segments. With its increased brand range BPW will have a volume base of 250 million cases.

"Beverage Partners Worldwide will operate with the full commitment of its two equity partners, but with the innovative spirit, speed and culture of a new start-up company,” said Carlos E. Represas, Nestlé’s executive vice-president. “We expect that combination to stimulate rapid growth.” Brands already within the co-operation include Nestea and Nescafé for the ready-to-drink categories. In addition, Coca-Cola will add the Tian Yu Di tea and Yang Guang tea businesses, while Nestlé will be contributing its Belté tea business. Beverage Partners World-wide will also focus on expanding its geographical reach, looking to enter new markets (excluding Japan) with both new and existing products.

As an independent entity, BPW will have the structural flexibility to quickly and decisively capitalize on new opportunities. In addition to its present coffee and tea-based product lines, the company will also participate in the fast growing herbal beverage sector as well as market beverages with a healthful positioning. With a clear focus on marketing and sales, Beverage Partners Worldwide will develop an entrepreneurial management team of approximately 60 professionals. Mr. Hans Savonije, a Dutch national with extensive international experience, and currently Coca-Cola’s division president for Central Europe and the Russian Federation, has been appointed chief executive officer of the company, which will be based in Zurich. Mr. Hans Savonije will report directly to an executive board co-chaired by Mr. Jack L. Stahl, President of The Coca-Cola Company, and Mr. Carlos E. Represas, Executive Vice-President of Nestlé S.A. Beverage Partners Worldwide will enjoy operational freedom while continuing to draw upon the complementary capabilities of the two partners – benefiting from Nestlé’s depth of knowledge in life science, research and development, as well as the traditional marketing expertise and distribution strength of Coca-Cola.

“We have great respect for Nestlé and their special insight,” said Coca-Cola’s president Jack L. Stahl. “Developing a focussed relationship with such a uniquely qualified partner as Nestlé is an important component of our overall growth strategy, and we have very high expectations for Beverage Partners Worldwide.” Beverage Partners Worldwide is subject to approval by regulatory authorities, and discussions have already been initiated with the European Commission. The transaction does not imply any participation in the respective partners’ share capital.