Energy drinks are the fastest-growing product in Africa, says local Coca-Cola bottler

  • Coca-Cola Beverages Africa is listed in Amsterdam, with a secondary listing on the JSE this year.
  • The company operates in 14 African countries and sees strong future growth on the continent, with energy drinks being the fastest growing category.
  • Coca-Cola has a partnership with energy drink brand Monster.

As Coca-Cola Beverages Africa (CCBA) prepares to list on the JSE this year, the company says it is planning possible “consolidation” on the continent and wants to capitalize on strong African demand – particularly for energy drinks, the fastest growing drink category.

Last year, American giant The Coca-Cola Company announced that it will list its African bottling operation in Amsterdam and on the JSE this year. Bloomberg previously reported that the listing could be worth €7 billion (about R122 billion) – the same size as Shoprite.

The company held a “Capital Markets Day” — an online briefing for potential investors, analysts and the media — this week in preparation for its listing.

“We aim to unlock what we see as significant African growth potential for CCBA,” CCBA CEO Jacques Vermeulen said at the briefing. CCBA operates in 14 countries. The six key markets are South Africa (the largest and most established market), Kenya, Ethiopia, Uganda, Mozambique and Namibia.

He sees Africa’s young population and increasing urbanization on the continent as beneficial to CCBA’s growth trajectory as it offers the potential for increased consumption per capita, including in the juice, water and energy drinks categories. Energy drinks are the fastest growing soft drink category in Africa.

Coca-Cola owns a stake in Monster, the second largest energy drink brand in the world (after Red Bull). It is also the official distributor of Monster.

CCBA is the largest bottler of non-alcoholic ready-to-drink beverages in Africa. It accounts for more than 40% of The Coca-Cola Company’s African volume. CCBA is also the eighth largest Coca-Cola bottler by revenue worldwide.

“The Coca-Cola Company chose us as their partner to further drive consolidation on the continent and create greater cost efficiencies. We will therefore invest in opportunities that arise,” said Vermeulen.

“Since 2019, we have transformed our operating model to build a better, smarter and faster world-class bottler. Our end-to-end digital transformation is also underway and will deliver more consumer insights,” said Vermeulen. “CCBA has in-depth knowledge of doing business in Africa and we see significant opportunities to consolidate the continent’s fragmented bottling landscape.”

He says the company plans to continue investing in opportunities that may arise. “We have operated and reported as a public company for many years and have learned from global best practices. We have a very strong balance sheet and we can use this to make acquisitions that fit our profile,” said Vermeulen.

Norton Kingwill, CFO of CCBA said that CCBA cannot continue on its strong growth trajectory without investments. “Our track record gives us confidence. We have a long history of success in Africa and we have a story to tell of growth,” he concluded.

CCBA – described during the briefing as “born and raised in South Africa” – was listed on the JSE in an earlier iteration, Amalgamated Beverage Industries (ABI). It was delisted in 2004 after SABMiller bought out minority shareholders.

Then, in 2016, CCBA was formed after SABMiller ABI merged with The Coca-Cola Company’s bottling operations in South and East Africa. The following year, US giant SABMillers bought SABMiller’s 55 percent stake in CCBA for $3.15 billion after the company was acquired by Anheuser-Busch InBev.


Comments are closed.