Oatly strikes co-manufacturing deal with Canada’s Ya Ya Foods 

Oatly has struck a production deal with Canada-based Ya Ya Foods Corporation as the alternative-milk group looks to move to an “asset-light” model. 

The agreement will see Ya Ya Foods take control of two of Oatly’s North America-based production facilities and acquire technical equipment. 

Sweden-headquartered Oatly said it will retain full ownership and operation of its oat-base production lines in its facilities in Ogden, Utah and in Fort Worth, Texas. The oat base will then be transferred to Ya Ya Foods to be co-packed on-site. 

Oatly said the deal is part of a “shift towards an asset-light supply chain strategy to expand its hybrid production network globally to better support its growth, capacity needs and product and format innovations”. 

The company added it “expects this hybrid partnership to result in future capital expenditures savings and have a net positive effect on its cash flow outlook”. 

The deal comes as Oatly cut jobs to save costs following disappointing third-quarter results in 2022. It said at the time it expected annual savings of up to US$25m from the reorganisation, announced in November, which will take effect from this year. 

Meanwhile, the deal with Oatly marks Ya Ya Foods’ first foray into the US manufacturing market. The deal is expected to be sealed in the first quarter of this year. 

Toni Petersson, Oatly’s CEO, said: “We believe an increased focus on our oat base technology, innovation, branding and commercial execution will better position Oatly to drive profitable growth, while reducing the capital intensity of our future facilities, and ultimately convert more consumers to plant-based and create more products that are healthy for people and the planet.” 

Ya Ya Foods CEO Yahya Abbas added: “This highly strategic partnership with Oatly is a key step towards achieving our goal of becoming the leading aseptic beverage co-manufacturer in North America.”

AB InBev to invest US$413m in new Colombia brewery  

Anheuser-Busch InBev (AB InBev) is investing around US$413m in a brewery in northern Colombia. 

When the site is operational in 2024, it will produce the beer brands Águila, Poker and Club Colombia. The construction phase is expected to create 1,500 jobs in the region and, once online, the brewery will employ roughly 350 workers. 

The world’s largest beer maker operates in Colombia via its Bavaria subsidiary. Bavaria operates seven breweries across the country, as well as a labelling production site and two barley malting houses. 

The new brewery will be built one hour’s travel from the northern city of Barranquilla. 

AB InBev said it is “expected” the factory will start operations with zero net carbon emissions. Bavaria has said it will use only solar power-generated energy in its breweries from the start of 2024. 

“We firmly believe in Colombia and in the great transformations that the private sector can generate for the benefit of the country. With this new plant, Bavaria is investing long-term on a significant expansion of the industry. It is an example of the spirit of Bavaria, which after more than 130 years, continues to invest in growth and innovation,” Bavaria president Sergio Rincón said. 

According to GlobalData, Colombia’s beer market is expected to grow by roughly US$270m in the next three years. From 2021 to 2025, the Colombian market is set to have a compound annual growth rate of 3.1%. While there are small sales of ales and flavoured beers, the predominant variant is lager, which accounted for $4.45bn of the market in 2022. 

GlobalData research shows Águila made up 37.6% of beer sales in Colombia by value in 2021, the most recent year for which the group has complete statistics. AB InBev’s Poker brand was Colombia’s second-largest beer brand by the same metric, with a market share of 27.8%.

Keurig Dr Pepper buys stake in US energy-drink maker Nutrabolt

Keurig Dr Pepper (KDP) has agreed to pay US$863m for a 30% stake in US energy-drink and recovery-beverage maker Nutrabolt.

The “strategic partnership” also includes a long-term sales and distribution agreement for Nutrabolt’s energy drink brand C4, KDP said.

From next year, C4 will be sold in the “vast majority of KDP’s company-owned direct store distribution territories”.

Nutrabolt, which has a range of functional food and beverage products that also includes US sport-nutrition brand Xtend, sells into D2C platforms including Amazon, as well as into national US retailers.

The deal, due to be closed by the end of the year, has placed KDP as the second-largest investor in Nutrabolt behind the brand’s founder, chairman and CEO, Doss Cunningham. KDP will also have “representation” on the Nutrabolt board, the release said.

Cunningham said the partnership would “supercharge C4 Energy’s current growth trajectory by accelerating household penetration, enhancing distribution and strengthening our overall commercial capabilities”.

The partnership also leaves scope for KDP to increase its share “under various capital raising scenarios”.

KDP CEO Bob Gamgort said: “This partnership represents a win-win transaction between our two companies. KDP gains significant presence in the rapidly growing performance energy drink market and Nutrabolt gains access to a strategic investor with extensive sales and distribution capabilities to further accelerate its growth.

“We believe that bringing together the resources, talent and expertise of both companies will accelerate innovation and growth and drive significant value creation over time.”

KDP said taking on the distribution of C4 would have “limited impact on KDP financial results until 2024, when KDP expects the strategic partnership to become accretive to its financial results.”

In August, KDP moved to pour cold water on speculation it was in talks to buy Bang energy drinks owner Vital Pharmaceuticals, insisting, after Bloomberg reported discussions between the two companies, that it was “currently not pursuing an acquisition”.

However, the Dr Pepper owner did say it was pursuing growth “through M&A and brand/distribution partnerships”.

Two months later, a “strategic partnership” between KDP and Red Bull was announced in Mexico.

Carlsberg to acquire Canadian craft brewer Waterloo Brewing

Carlsberg has moved to strengthen its position in Canada, striking a deal to buy Ontario craft brewer Waterloo Brewing for CAD144m (US$107.2m).

The Tuborg brand owner said it would manufacture both its own and Waterloo Brewing’s brands at the craft brewer’s production facility in Ontario following the deal. Waterloo Brewing has made Carlsberg’s Somersby Cider brand for sale in the Canadian market since 2020.

Carlsberg said the purchase of Waterloo Brewing – which is expected to be closed in the first half of 2023 – would “deliver significant supply chain and revenue synergies” for the group.

Group CEO Cees ’t Hart said: “The acquisition of Waterloo Brewing significantly improves our growth prospects in the Canadian market.”

Anders Rud Jørgensen, Carlsberg’s managing director for Canada, added: “This exciting opportunity will scale our business in Canada. The brand portfolios are complementary. Local sourcing will secure long-term robustness of supply, increase commercial flexibility and speed to market for innovations, step-changing the way we operate.

“Waterloo Brewing’s excellent portfolio of long-standing co-packing relationships will benefit from these combined operations.”

For Waterloo Brewing, the deal provides “provides immediate liquidity” in a time of rising input costs in brewing. George Croft, the brewery’s president and CEO, described the tie-up as “a great fit”.

He added: “We’ve enjoyed a close relationship with Carlsberg and are excited about becoming part of one of the largest brewing companies in the world.”

Waterloo Brewing is Ontario’s largest Canadian-owned brewery. It was founded in 1984 and produces its own range of craft beers, as well as contract brewing and packaging services in beer, coolers and ciders. It also owns the Canadian rights to the Laker, Seagram Coolers, Landshark and Margaritaville brands.

Alongside the news of the deal, Waterloo Brewing booked falling nine-month revenue and profits.

Waterloo Brewing blamed the numbers on consumers trading down and affecting sales of its premium brands, as well as ongoing inflationary pressure in its own supply chain.

Distell deal “economically unviable” without Savanna and Hunter’s brands, Heineken tells competition tribunal

Heineken has reportedly said if it cannot buy both Hunter’s and Savanna as part of its deal to acquire Distell then the transaction will not go ahead. 

According to South Africa’s Business Day publication, the Dutch brewer told the country’s Competition Tribunal it sees the US$2.52bn transaction as “economically unviable” without the inclusion of the two South African cider brands. 

South Africa Breweries (SAB) – Anheuser-Busch InBev’s subsidiary in the country – has reportedly objected to the takeover on the grounds it would remove an effective competitor in the market. 

According to GlobalData, Heineken South Africa – of which Heineken is the majority shareholder – and Distell are the two largest producers of cider in South Africa. In 2021, the two companies recorded volume sales of 6.2m hl and 2.7m hl, respectively. 

The deal – announced in November 2021 – was cleared by South Africa’s Competition Commission in September on the condition Heineken sells its Strongbow cider business in South Africa. 

Other conditions include Heineken investing more than ZAR10bn (US$567.1m) in its business in South Africa over a period of five years, as well as establishing a share ownership scheme and setting up an R&D hub in South Africa. 

SAB, however, reportedly has questions over the strength of Heineken’s Strongbow brand and would prefer to see Distell sell off one of its cider brands instead. 

When approached by Just Drinks, Heineken declined to comment on the specifics of the tribunal, instead providing the following statement: “We’re pleased The Competition Commission has recommended the deal for approval and that it is now with the Competition Tribunal for the next stage of the approval process and we await their final decision in due course. 

“We are very excited to bring together three strong businesses to create a regional beverage champion, and we are committed to being a strong partner for growth and to make a positive impact in the communities in which we operate.” 

SAB did not immediately respond to Just Drinks’ request for comment.

Bacardi resolves Jay-Z dispute, takes control of D’Usse Cognac JV

Bacardi has reached an agreement to take over the majority shareholding of the D’Usse Cognac brand, resolving a lengthy legal battle with US rap star Jay-Z.

The transaction will see Bacardi buy out a majority of Jay-Z’s 50% stake in the Cognac company. The 99 Problems songwriter – real name Shawn Carter – will retain “a significant ownership stake” through his company SCLiquor.

Terms of the deal were not disclosed, although with Bacardi now owning at least 75.01% of a business Carter has valued at US$3bn throughout the public dispute, the stake sale could have netted the rapper as much as $750m.

In a statement announcing the deal, D’Usse was described only as a “multi-billion dollar brand.”

The statement added Carter was “excited to renew” the brand’s relationship with Bacardi, despite the drawn-out and fractious legal battle between the two parties.

Carter said: “Growing D’Usse over the past decade from an idea to one of the fastest-selling spirits in history has been a blessing. The next phase of this journey will further cement D’Usse’s legacy as one of the world’s most respected brands.”

SCLiquor had sought a new owner for D’Usse over fears Bacardi subsidiary Empire Investments – which oversees its day-to-day operations – was mismanaging the Cognac brand.

In response, Bacardi reportedly offered Jay-Z $500m to buy out his 50% stake in the brand and subsequently rejected the rapper’s counter-offer of $1.5bn for its own stake.

The dispute turned ugly after Bacardi won several early rounds of arbitration, with Jay-Z taking the case to court and claiming one member of the arbitration board was a racist, while alleging another held a personal grudge against him.

The 24-time Grammy-winning artist had also claimed in October the Bombay Sapphire brand owner was deliberately running D’Usse into the ground to drive down the value of his stake.

Several legal disputes between the two parties remained pending prior to the announcement late last week.