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Refresco, a global independent beverage solutions provider for A-brands and retailers in Europe and North America, announced it has completed the acquisition of HANSA-HEEMANN, following the receipt of regulatory approval from competition authorities.

Refresco announced that it had entered into an agreement with HANSA-HEEMANN, a family-owned independent beverage manufacturer, to acquire its five production sites in Germany. Now that the acquisition has been completed, Refresco has nine bottling facilities strategically located in Germany, resulting in national coverage to serve customers’ demands. With this acquisition, Refresco also further enhances its position in terms of product and brand portfolio.

Hans Roelofs, CEO Refresco Group: “I am very pleased to add HANSA-HEEMANN to the Refresco Group, as it further diversifies and strengthens our business in Germany, which will benefit our customers. Through this acquisition, we significantly expand our offering in mineral water and soft drinks, and we are going to accelerate our operational excellence through HANSA-HEEMANN’s know-how in the water category. In addition, we will be able to improve transport efficiencies and leverage our global scale to further drive change in improving the sustainable use of resources.”

Refresco, one of the world’s largest independent bottlers for retailers and A-brands in Europe and North America, today announces it has entered into an agreement to acquire HANSA-HEEMANN. This transaction is subject to regulatory approval.

HANSA-HEEMANN, headquartered in Rellingen, Germany, is a family-owned, independent beverage manufacturer with five production sites spread across Germany. Its operational excellence, industry expertise and integrated value chain enable HANSA-HEEMANN to offer customers best-in-class service. The vast majority of HANSA-HEEMANN’s volume (60 %) is in mineral water, with the remaining 40 % of its volume in carbonated soft drinks (CSD). HANSA-HEEMANN serves three different market segments: private label, own brands, and contract manufacturing for A-brands. HANSA-HEEMANN employs over 800 people with an annual revenue of approximately €300 million.

Strategic rationale

Today’s announcement is a continuation of Refresco’s successful buy-and-build strategy which is a key driver of the company’s ongoing growth and value creation. With this acquisition, Refresco further enhances its position in terms of product and brand portfolio, and geographical coverage.

Acquiring HANSA-HEEMANN will bring Refresco:

  • Diversification of its business with additional products and capabilities, while maintaining a well-balanced business mix and customer base
  • Strong brands such as Fūrst Bismarck, hella and St. Michaelis
  • Expansion of its offering in water and CSDs
  • Increased presence in Germany, now offering nationwide coverage to retail customers
  • Acceleration of its operational excellence through HANSA-HEEMANN’s know-how in the water category

A changing market

Water is the largest category within the non-alcoholic beverage market. The landscape is highly competitive and rapidly changing with many smaller local and regional players who maintain a strong foothold. Branded players with a wide range of water products are looking for opportunities to grow with retail discounters.

In addition, the focus on sustainability continues resulting in for example, increased demand for recycled PET and reduction in operational carbon footprint.

Within this highly competitive and changing market, the acquisition of HANSA-HEEMANN will enable Refresco to enhance its presence in Germany – not only broadening relationships with German retailers, but also improving transport efficiencies and reducing CO2 emissions. Furthermore, Refresco will be able to leverage its global scale to further drive change in improving the sustainable use of resources.

One of the fastest growing demands relates to better-for-you food and drink products with a natural and balanced level of sweetness. Symrise has done a deep dive into consumption behaviors and focused on revealing the diversity of sensorial preferences. It has conducted studies to guide the development of new taste solutions that meet the latest consumer taste preferences. The resulting solutions balance the taste of a reduced sugar level from cookies to cocktails while keeping a maximum level of indulgence in different ways, for different consumers.

Established and new labelling systems like the UK’s traffic light system or the Nutriscore are helping consumers to navigate their purchase. “The desire for a healthy weight and more natural sweetness in products has led to an increasing number of people looking for sugar-reduced products. These should taste good and, ideally, contain fewer calories,” says Dr. Dariah Lutsch, Sensory & Consumer Insights Research Manager of the Flavor Division at Symrise. “A purchase simulation shows that 75 percent of consumers would choose reduced-sugar versions within nearly all product categories”, adds Lutsch.

This refers to a study on sweet taste perception in Europe, Africa and the Middle East Symrise has recently carried out. It has found that multiple routes exist to reduce the sugar level while at the same time meeting taste preferences.

  • Route #1 – tastes as sweet as the full sugar version and 33 % of respondents prefer it.
  • Route #2 – tastes similar and less sweet and 20 percent of consumers prefer this route.
  • Route #3 – The third group of about 22 % behaves more adventurous. They are looking for a new unique flavor composition and accept a difference in taste compared to the full-sugar version.

Ideal sweetness for soft drinks

With a further study on the ‘Ideal Level of Sweetness’ in 2019 for Cola CSD (carbonated soft drinks) in Germany, Symrise wants to determine the optimal sweetness level with different sugar contents from 106 g/l to 75 g/l sugar. The study re-confirmed the findings and also revealed that consumers perceive a sample with 75 g/l as lacking in sweetness. Knowing that sugar reduction in beverages impacts the overall taste profile and sweet taste dynamics from mouthfeel, Symrise conducted a second study and tried to increase the consumer liking of sugar-reduced products by applying Symrise taste balancing solutions with Symlife®. The team succeeded in dramatically increasing the overall liking of sugar reduced cola versions 85g/l and 75g/l by adding the taste solution of Symrise.

Regardless, which route consumers prefer and which target consumer food manufacturers would like to reach, Symrise supports their customers in reducing calories in a range of beverage products – from ice tea to CSDs – and offers the final taste profile consumers love across all three scenarios.

The iGeneration (also known as Gen Z) is the name given to people born between 1995-2007, following Generation Y. The “i” represents the technology that this generation has grown up with, for example, iPhone, iPod, Wii and iTunes.

Digital Dilemma

The iGeneration are known to consume large amounts of media on a daily basis, averaging between six and nine hours. They use social media such as Facebook, Twitter, YouTube, Instagram, Pinterest and Snapchat as information sources and a way to connect with brands.

Growing Purchasing Power

As this generation graduate from school and college, they begin to have a growing purchasing power, and by 2020, they will account for 40 percent of the consumer market. Influenced by their level of control, identities and globalization, these behaviours and characteristics are shaping the beverage industry, as they look for products to improve their physical and emotional health, as well as helping the environment.

Teetotalism

This digitally-connected generation are more concerned over safety, taking fewer risks and drinking less alcohol than former generations. In comparison to previous generations, the iGeneration have become conscious of what they put in their bodies. This is driving the explosion of variety in low alcohol or no alcohol alternatives on the supermarket shelves.

This is driving the explosion of variety in low alcohol or no alcohol beverages on the supermarket shelves, driving the desire for more sophisticated drinks. Mocktails are becoming more inventive with savoury and spicy notes, appealing to the iGeneration’s broad and adventurous palates. The iGeneration are one of the most ethnically diverse groups and therefore more receptive to ethnic flavours, driving an appeal towards botanical-infused drinks.

Better-for-you

This generation have been educated to make healthier choices, particularly around ever-growing concerns over the consumption of sugar. With CSD’s in decline, bottled and flavoured water has noticeably increased as a replacement, along with cold brew coffees and teas, with more innovative flavours and ingredients.

Transparency is also valued, leading to a higher number of clean label claims. According to Global Data’s study in 2018, 42 % of iGeneration “are often or always influenced by how ethical, environmentally friendly, or socially responsible a product is in the following sectors” in comparison to only 28 % from the silent generation.

Healthy Grab-and-Go

The iGeneration are revolutionising the eating experience. Convenience has become key to meet on-the-go lifestyles and creating grab-and-go convenience opportunities for not just meals, but snacks and beverages. As told by Global Data, “Gen Z and Millennials are most likely to use out-of-home services on a regular basis compared with older age cohorts.” They often prefer to stay at home and use technology to get a food delivery.

According to a study by the International Foodservice Manufacturers Association (IFMA) and the Centre for Generational Kinetics, 24 % of the iGeneration order a takeout three or four times in a typical week, exceeding any other generation. It is worth noting that these deliveries are mostly healthy in order to keep up to go with their on-the-go lifestyles. As told by Tufts Nutrition, 41 % of Gen Z say they would spend more on foods they perceive as healthier, in comparison to only 32 % of millennials and around 21 % of baby boomers.

Source Treatt: www.treatt.com

Following the news that PepsiCo is set to buy Rockstar Energy Beverages; Andy Morton, Drinks Deputy Editor at GlobalData, a leading data and analytics company, offers his view:

“This agreement will fill a gaping hole in PepsiCo’s beverage portfolio just as The Coca-Cola Co looked to have the drop over its historic rival in global energy drinks.

“In recent years, Coca-Cola has taken a minority stake in Monster Energy owner Monster Beverage Corp and launched its own energy drink under the Coca-Cola brand. The moves targeted fast growth in energy that has stolen share from carbonated sodas such as Coke and Pepsi and threatened the traditional business strategies of the larger beverage multinationals.

“As Coca-Cola cosied up to Monster, PepsiCo’s lack of action in energy became more apparent. Energy offerings from PepsiCo so far have largely been from its Mountain Dew soft drinks brand, with niche consumers such as gamers served with the likes of Amp Game Fuel and athletes with a caffeinated version of Gatorade called Bolt24.

“The Rockstar acquisition hands PepsiCo an off-the-peg solution to its lack of a bespoke energy brand while offering new angles for those already in its portfolio. According to GlobalData, Rockstar accounts for just 4 % of the global energy drinks market by value, but the company offers a platform to bigger things.

“The purchase also sounds the starting gun for a new frontier in PepsiCo and Coca-Cola’s beverage war as the world’s biggest soda companies finally get serious in energy.

“For years, the global energy drinks market was dominated by the upstart Red Bull. Recently, however, Monster – buoyed by a sea of cash from domination in the US – has closed the gap by stretching its tentacles beyond the country, with exports boosted by a distribution agreement with Coca-Cola. With Rockstar now set to join PepsiCo, it too could become a global player and expand beyond its current few dozen export markets.

“There’s much to play for – according to GlobalData, the global energy drinks market grew by 8.9 % in 2018, making it the fastest-growing category in non-alcoholic beverages. That growth was driven by Asia (+18.7 %), Eastern Europe (+16.9 %) and Africa (+14.0 %). China, meanwhile, became the world’s biggest energy drinks market after overtaking the US, signalling that the real action in the category lies beyond PepsiCo and Coca-Cola’s developed markets.

“Prepare to be buzzed – the energy drinks showdown is going global.”

The carbonated soft drink (CSD) sector in Australia is facing continued pressure amid consumer concerns about sugar. New research from global market intelligence agency Mintel reveals that total volume sales of Australia’s CSD category are expected to see a 2.3 % decline in 2017. In fact, CSD sales dipped 4.7 % in 2016 since 2014.

Mintel research indicates that negative sentiments towards sugar have driven many Australians to reconsider their sugar intake. One in three (34 %) metro Australian consumers* say that they are limiting the amount of sugar/sugar substitutes in their diets, while three in 10 (29 %) are avoiding items with sweeteners. Furthermore, as many as three in five (58 %) Australians say they are limiting their consumption of sugar and sugar substitutes in an effort to to watch their weight, while over half (53 %) do so because of future health concerns (eg. developing diabetes).

Jenny Zegler, Global Food & Drink Analyst at Mintel, said:
“With concerns about obesity rates and overall health in Australia, many consumers are now focusing on sugar and sweetener content when choosing food and drink, with some limiting the amount of sugar or sweeteners in their diets. These concerns have especially taken a toll on Australia’s carbonated soft drinks category, which is forecast to see further sales declines by the end of 2017. Carbonated soft drink companies that seek to reconnect with consumers must take into account that concerns about sugar and sweeteners will continue to be a focal point for consumers moving forward.”

Indeed, it seems there is close scrutiny on the sugar content found in CSDs among Australian consumers; over a third of (35 %) metro Australians say that they check for the level of sugar/sweetener content in CSDs and 30% check for the types of sugar/sweeteners.
While personal preferences for or against sugar or specific sweeteners may vary by the individual, it appears that many Australians have a desire for more clarity around sugar content. More than three in five (64 %) metro Australians say they feel cheated when a company is not clear about the high sugar content of its products. What’s more, as many as three in four (76 %) agree that food and drink companies should make it easier to understand how much sugar is in their products.

Shelley McMillan, Trend & Innovation Consultant, ANZ, at Mintel said:
“Our research points to the necessity for simple and direct communication to reassure Australian consumers who are wary of their sugar consumption. To avoid consumer confusion or concern, products could define the amount and type of sugar or sweeteners on product labelling to ensure that consumers can easily understand the sugar content of food and drink. Currently, the provision of front-of-pack sugar descriptions by carbonated soft drink companies are few and far between. This challenges more companies to be transparent in their claims.”

Meanwhile, even though consumers are looking for reduced sugar products, innovation activity does not necessarily align with interest. According to Mintel Global New Products Database (GNPD), ‘low/no/reduced sugar’ is a claim carried by just 12 % of CSD product launches in Australia in the two years to October 2017**. This is just below the already low global average of 15 % of CSD introductions launched globally in the same time period.
Finally, Mintel research shows that consumers think that manufacturers could be more aggressive in creating reduced-sugar formulations, with three in four (74%) metro Australians agreeing that food and drink companies should be doing more to reduce the amount of sugar in their products.

“Though there is a demand for reduced sugar food and drink products, companies are not doing enough when it comes to new product development. In fact, our research indicates that there is a definite opportunity for players in the carbonated soft drink industry to introduce more low, no or reduced sugar offerings into the Australian market. Another key way of enticing consumers to stay engaged with the category is for CSD brands to consider developing low, no or reduced sugar limited edition flavour offerings,” Jenny concludes.

*1,406 internet users aged 18+ from major metropolitan cities in Australia, polled in 2017
**November 2015 to October 2017