Beverage manufacturers are looking for sites abroad

#industry news

Against the background of the shortage of aluminum cans in the Russian Federation and the planned introduction of an excise tax on sugary drinks, large manufacturers are looking for ways to enter foreign markets through contract bottling in other countries. Thus, the owner of the Tornado Energy and E-ON Global Functional Drinks brands can organize the production of products in Africa and the Middle East. Such projects can reduce logistics costs and the risks of container damage during transportation.

A major producer of soft drinks Global Functional Drinks (GFD) plans to organize a contract bottling on foreign markets. The corresponding vacancy appeared in the profile of the GFD distributor — SNS GC on the HeadHunter portal. The duties of the candidate include the preparation of a task for the tender for the selection of a contractor for the production of beverages, interaction with the management team of the plant, process control, etc.

The GFD portfolio includes Tornado Energy, E-ON energy drinks, as well as Fresh Bar and Ilyinsky Lemonades brands. According to the SNS website, since 2011 the group has sold more than 1.1 billion bottles. SNS is also considered the second tobacco distributor in the Russian Federation after Megapolis Group, it supplies the range of British American Tobacco (BAT; Dunhill, Kent, Vogue, Pall Mall cigarettes, etc.). Forbes estimated the revenue of SNS in 2021 at 164.6 billion rubles.

GFD told “Ъ” that a decision to launch production in foreign markets could be made before the end of 2022.

According to the company, the countries of Africa and the Middle East are considered among the possible locations. The MENA region (Middle East and North Africa) is one of the key regions for Russian food. As noted in the Agroexport center, the volume of consumption of finished products in the target countries of Africa exceeds $29 billion per year, and soft drinks are one of the most popular categories. For the Russian market, GFD is currently building a plant in the Voronezh Region with a capacity of 800 million units per year and a cost of almost 5 billion rubles.

One of the founders of Famous Amazing Brands (Vanilla Flight and Anarchy drinks) Anton Stelmakov notes that GFD has always had ambitions of a global player and previously the company had an office in the USA. Bottling drinks abroad will allow you to save on logistics, which in the category can be very costly, optimize production against the background of the possible introduction of an excise tax on sugary drinks in Russia, and also get away from the shortage of aluminum cans in the country, he lists.

As the expert notes, there are enterprises in need of more workload in other countries, and the achievement of agreements will largely depend on the conditions that the GFD will offer.

President of the Union of Juice, Water and Beverage Producers (“Soyuznapitki”) Maxim Novikov reminds that “Baltika” first supplied energy drinks from Russia to Uzbekistan, and then organized a joint bottling in the country with a local enterprise. According to him, in addition to saving on logistics, such projects allow to level the risks of damage to containers during transportation. Meanwhile, in Russia, the demand for carbonated drinks is declining. According to NielsenIQ, sales of the category over the past six months have decreased by 7.4% in volume, and in money have grown by 15.8% year on year.