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Double digit growth for Coca-Cola Amatil Alcohol & Coffee

Double digit growth for Coca-Cola Amatil Alcohol & Coffee

Coca-Cola Amatil's Coffee and Alcohol division has recorded double digit growth its half-year results. 

Shane Richardson, Managing Director, Alcohol and Coffee said: “The alcohol division has been delivering 30% EBIT growth for the past two years and we are celebrating another double digit result."

However, Amatil suffered an overall 29.3% drop in half-year profit due to challenging trading conditions in its Australian Beverages division - trading revenue fell 5.1% to $1.23 billion, while underlying earnings fell 13.2% to $182.9million. 

Amatil said Australian beverages suffered from competitive pressure in the cola and water categories and the impact of higher costs of goods sold.

Overall, Amatil made $140.1million in statutory net profit, down from $198.2million a year ago, while trading revenue fell 3.7% to $2.42billion.

Managing Director Alison Watkins said: "Since Easter we have seen pricing pressure in sparkling beverages ease compared to the prior half and volume in branded water has grown with investment in price in the last few months."

Amatil's earnings from its New Zealand and Fiji, Indonesia and Papua New Guinea and Alcohol and Coffee divisions were strong despite soft economic conditions in some markets.
The Indonesia and Papua New Guinea division lifted earnings 41.4% to add $13.7million to the company's total earnings.

Amatil said it expects underlying net profit for the full-year to be broadly in line with last year's $417.9million.

Richardson's star performers

Among highlights of the 2017 financial year for Richardson were the success of RTDs Canadian Club 4.8% and Premium.

“Canadian Club is now the fourth largest RTD in the market – we’re very proud of its meteoric rise,” he said.

Richardson noted that NPD was also delivering strong results, particular Maker’s Mark, which he said was now the fourth largest bourbon brand in Australia.

“It’s a premium product offering craftsmanship and versality,” he explained.

The popularity of Maker’s Mark was also driven by the revival of the ‘Old Fashioned’ as a cocktail. 

Richardson said the company’s Spirits Exchange and new Beer & Cider Exchange teams were a crucial component of the division’s success. The teams were focussed on educating bartenders and retailers about products, while helping them “tell their stories.”

“We’re not tells bartenders how to be bartenders,” he explained. “We’re just assisting them to create better drinks.”

As part of the company’s holistic mixology strategy, for example, a premium Old Fashioned would be created using Amatil products including Australian Bitters and Maker’s Mark, while a Lemon, Lime & Bitters would be created with Australian Bitters and Sprite. 

Richardson said he saw huge growth potential for the alcohol division in 2018, both domestically and internationally.

He pointed to Yenda Crisp being exported to Singapore and Ratu Rum recently winning Double Gold at the San Francisco Spirits Competition as examples of superior Amatil products with big futures.

Ratu, which is created by Fiji’s leading beverages manufacturer Paradise Beverages, which is part of the Amatil Group, was launched in Australia last year.

“These fantastic quality rums are already very popular in Fiji and they’re beginning to attract global interest after winning a number of big awards in London and San Francisco,” Richardson said. 

“Australian craft beer is also attracting a huge amount of international attention and we believe there are further export opportunities for Yenda.”

Richardson said the addition of Miller Genuine Draft and Miller Chill, plus Sipsmith Gin and Magners Cider to his division meant Amatil’s alcohol offering had evolved to be well-rounded and “a beautiful portfolio”.