Carlsberg Group has doubled its focus on soft drinks with this week’s acquisition of UK manufacturer Britvic.
Denmark-headquartered Carlsberg's £3.3bn ($4.2bn) offer was backed by the Robinsons-squash maker's board on Monday (8 July).
The bid was the third the Danish brewer had made for the UK soft-drinks group, which said last month it had rejected two previous offers.
Under its ‘Accelerate Sail’ growth strategy, Carlsberg has been looking beyond its core beer market to grow in categories like cider, seltzers and alcohol-free beer.
It said the acquisition of Britvic will take its soft-drinks “exposure” from 16% to 30%. Combined with its separate ‘Beyond Beer’ offering, which includes Somersby cider and Garage RTDs, the drinks giant’s non-beer offering now forms 33% of its portfolio.
Speaking to analysts on a webcast following the announcement, CEO Jacob Aarup-Andersen said the portfolio diversification would help increase revenue but beer would remain its “core business”
“We're confident that by diversifying our brand portfolio with a number of leading brands, we are in fact improving our exposure to attractive growth categories and by that supporting our Accelerate Sail ambition of 4% to 6% average organic revenue growth annually,” he said.
“It's important to stress that Carlsberg will remain a brewer, with beer being our core business. However, increasing our exposure to the growing soft-drinks category will improve the resilience of the overall business both from a market and from a portfolio perspective.”
Soft drinks already formed over a fifth of the group’s volumes – 27% – in 2023, and 27% in Carlsberg’s Western Europe region.
Geographically, the Britvic buy expands Carlsberg’s presence significantly in Western Europe – which Aarup-Andersen dubbed “a region with attractive cash flows”.
Around 71% of Britvic’s volume sales come from Great Britain, boosting Carlsberg’s presence in Western Europe from 35% of volumes to 43%.
“We are a number one or two player in most markets, including the stable cash generative Nordic markets and Switzerland, where we operate a combined beer and soft-drinks business model,” Aarup-Andersen said.
“We're very pleased with our Western European business and the opportunity to further strengthen this footprint by adding the Britvic business.”
Carlsberg also revealed it is set to acquire Marston’s stake in their UK-based joint venture for £206m ($264m).
Just Drinks took a look at what the next steps will be for Carlsberg in the UK and the rest of Europe.
