T H E B E V E R A G E C O M PA N Y

THE BEVERAGE COMPANY

The BevCo on Marathon

Journey to Success
PRODUCTION: Karl Pietersen

Operating in the highly-competitive soft drinks manufacturing industry in southern

Africa is no easy business, and only those with a clear and considered strategy succeed.
A relatively new player to the market, in its current form, The Beverage Company
is looking to constantly grow by offering a range of ‘local hero’ brands combined
with globally recognised champions. CEO Michael Benjamin tells us more about the
company’s establishment, growth, and ambition during these tough economic times.

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INDUSTRY FOCUS: MANUFACTURING

//
A leading soft drinks STRENGTH IN DEPTH looking to take our share, so we always
manufacturing business In 2018, after years of planning and need to be growing our business – if
in South Africa is coming strategizing, The BevCo was launched you’re not growing then you’re dying,”
up with a plan that will delight after a consortium, led by Ethos, he says.
customers by delivering a range of acquired Little Green Beverages (LGB) “I would love to be number one
locally prominent brands combined and Softbev, two of the country’s large but we have to stand back and look
with internationally-recognised manufacturers and brand owners. at whether that is a realistic dream in
staples. A forward-thinking and LGB was strong in the Eastern Cape, a five year period – and in that time
modern organisation, The Beverage Mpumalanga and Gauteng, and Softbev frame it is unrealistic. By any measure,
Company (The BevCo) was officially was strong in KZN, the Western Cape, Coca-Cola is the leader in the market. I
established in 2018 after the merger and Gauteng through its subsidiaries always say it’s like running a marathon.
and acquisition of several regional Shoreline and Quality Beverages. If you can run the marathon in four
players, creating a nationally With the acquisitions came important hours, that is great. But if you want to
significant business. brands including Coo-ee, Jive, Refreshhh, get to world-class levels, there are many
Headed by industry veteran Reboost, 7UP, Capri-Sun, Mirinda, hurdles to overcome. As you get quicker
Michael Benjamin, The BevCo has, Mountain Dew, Pepsi and Pepsi Max. and quicker, things become slightly
in a short period of time, utilised This created a platform from where easier. That is the journey we are on.
the existing infrastructure at its The BevCo could become an able We need to concentrate not only on
disposable to create a powerful challenger. Today, the business has market share but our building blocks of
South African business with more than 1000 employees across five penetrating each market, making our
exposure across all of the southern manufacturing locations in all of South brands relevant, investing behind the
African nations. Africa’s major metros. scenes – whether that is refrigeration,
Right now, there are plans CEO Michael Benjamin, a big communication, or ensuring product
bubbling away behind the scenes sports fan, talks to Enterprise Africa quality. By doing all the right things, we
that will see The BevCo grow further about the ambitions of this young and will get to grow the business, but you
to take on some of the mighty names vibrant company, using the marathon can’t preordain growth or market share.
in the highly competitive industry, as his analogy. There is a realisation that we are going
while all the time remaining “I don’t sleep happy at night through the hard yards and you can’t
sustainable and responsible. knowing we are number two. Others are wave a wand to achieve success.”

Michael Benjamin CEO

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 THE BEVERAGE COMPANY

8. Western Cape Marketing presentation-TBC Conference 26.9.18 Day 1

PACEMAKERS people who are midway through their TRUE EXCELLENCE

A strategic decision was taken a long careers and have plenty of time left yet The BevCo brings an unrivalled product
time in advance of the founding of where they want to achieve rather than portfolio to its clients. Choice is a key
The BevCo to ensure that the whole seeing this as their swansong.” factor in its offering for consumers
organisations stays thirsty for success. By making the entire leadership and, between its local heroes and
This decision saw an Exco and team shareholders, The BevCo has global champions, customers are given
management team appointed that has ensured that its top people are invested excellent variety. But the portfolio is
impressive industry experience but has in results. “It drives a very different never finished, and Benjamin admits
not been fatigued. It is packed with decision-making process. They are tied much is happening behind the scenes to
energy and has been given freedom to to the credibility of the business and develop the product range.
go out and build on a robust platform. they are invested in the growth agenda,” “It doesn’t take a rocket scientist
“Within these businesses, there says Benjamin. to work out that there is a massive shift
are incredible entrepreneurs and Ensuring that a forward thinking in global consumer trends and these
entrepreneurs tend to move with speed – approach is instilled throughout the impact our local trends. For us to stay
we don’t want to lose that,” says Benjamin. organisation, leadership takes the time relevant, we believe we need to gain a
“The collective leadership has every quarter to get out to each of the bigger portfolio. We have a number of
a very sough-after track record,” he company’s sites and talk to employees categories we are very actively looking
adds. “We haven’t gone for ivory tower face to face, in a transparent manner, at. To give you an indication, R&D will be
people; we have gone for people who to further understand performance quadrupled next year and that should
have run operations and are specialists statistics and look at what is working indicate, from a strategic point of view,
in their fields. We have a number of and what is not. This is all part of a wider our level of investment and belief in what
vision for the business. “It all comes back we need to do to stay relevant.”
to our purpose,” explains Benjamin. Without revealing exactly what
// FOR US TO STAY “If we get it right, each employee sort of brands are being investigated,
RELEVANT, WE will improve the financial situation for Benjamin says that the company is
their family through investment in skills extremely interested in global trends and
BELIEVE WE NEED and their own learning. If this happens, will invest accordingly.
TO GAIN A BIGGER it will improve returns to shareholders, “Health and wellness is certainly
and that will help us build an African a focus,” he says. “There are unique
PORTFOLIO // legacy of true excellence.” challenges with water quality in

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INDUSTRY FOCUS: MANUFACTURING

// R&D WILL BE manufacturing base. With sites in recyclable, strong, adaptable and have
Johannesburg, Cape Town, Durban and the ability to sustain carbonation.
QUADRUPLED NEXT East London, The BevCo has South Africa “Anytime a commercial imperative
YEAR AND THAT well covered and will not look to invest
into further premises at this time.
meets a sustainable imperative,
you’ve got a winner for business,” says
SHOULD INDICATE, However, true excellence is an Benjamin. “The canning line gives the
ongoing and everchanging journey, and ability to play in a wider market, it gives
FROM A STRATEGIC so The BevCo is looking to make the most us the ability to be better with recyclable
POINT OF VIEW, of its existing infrastructure, expanding material, and it delivers efficiency. We
and improving what is already in place. were one of the first companies, if not
OUR LEVEL OF “We are looking at expanding our the first, to go into recycled PET and the
INVESTMENT AND five manufacturing facilities,” details
Benjamin. “All of our sites have different
challenge there is putting in carbonation
that lasts. Sustainability for us is not only
BELIEF IN WHAT WE areas where they are strong and weak. in packaging.”
We have identified pockets of excellence He goes on to explain how a
NEED TO DO TO STAY which we think we can share and use wider sustainability drive is helping the
RELEVANT // to improve the operating level of the company to become efficient at a world-
business. We are putting in canning lines class level.
Africa and so some categories are which gives us flexibility for innovation “Cape Town is known for its water
about sustaining life rather than just and materially improves our canning scarcity. We managed to move our
refreshment. There are other categories volume - these can be put in on existing water ratio down from 1.8 litres per litre
that surround meal replacement. There sites. There is not a strategic need produced to 1.3 litres which is globally
are categories that have a growing to go and expand our footprint, and world-class. We use new software which
awareness around packaging and carbon subsequent costs, when we do have the monitors our sustainability with water,
footprints – we are looking at a wide facilities that we can grow and evolve.” electricity, wastage and more. The result
range of options.” With reduction in plastic usage has been all of the figures being driven
True excellence in the product range on the radar for all manufacturers, the down. Even decisions like where we
can only be achieved if true excellence canning line comes at the prefect time position our distribution centres have
is chased across the company’s for The BevCo. Aluminium cans are fully been made with sustainability in mind.

7. Justin Geyve Chief Commercial Officer and Ernie Els with Els for Autism Water

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 THE BEVERAGE COMPANY

Truck volumes, distances, centre of sugar content that exceeds four grams // WE HAVE A
gravity – everything is done to ensure per 100ml, from 1 April 2019 this has
we align a commercial imperative with a increased to 2.21 cents per gram of RALLYING CALL ABOUT
sustainability imperative.”
Structuring in this way has helped
sugar. The first four grams per 100ml
are levy free and fruit juices are exempt.
RISING UP. WE RISE
the company to expand its presence Initially, there was major concern among UP AHEAD OF THE
across southern Africa, with demand for manufacturers that the tax would hit
its brands continuing to grow. Already the bottom line hard, but for those that ECONOMY, WE RISE
available in Namibia, Botswana, Zambia, were prepared and willing to innovate, a UP AHEAD OF THE
Lesotho, Eswatini and Mozambique, The concern has become an opportunity.
BevCo will undoubtedly look for further “For me, that was a major shock in INDUSTRY, AND WE
opportunities on the continent.
“It’s no secret that there is
the industry,” remembers Benjamin. “We
had to decide on a strategy in a very
RISE UP AHEAD OF
population growth around Africa and tense operating environment. We did a OUR OWN PREVIOUS
with that comes available disposable lot of testing in the background and we
income and a broader range of choice engaged widely with stakeholders. We RESULTS //
which we can create that might not eventually took what we considered to
be available in those markets,” says be a calculated bet by diverting all of our “Take energy drinks which are
Benjamin. “Because of this, growth in R&D to developing our underpinning growing in popularity globally – we see
Africa and bolstering exports into Africa consumer promise of offering as good now as the perfect time to reformulate
is most definitely part of our strategy. a taste as any competitor, at a better and offer a healthier drink that still
All of the original entrepreneurial price. We worked hard to make sure we matches what consumers want in terms
businesses have developed really strong stuck to the taste promise. In November, of taste, mouthfeel, tanginess. In October
relationships with a number of role we put reformulated products into the last year, we took our biggest energy
players in these markets, and they are market one by one, six months ahead of brand, Reboost, and reformulated it from
committed to a growth agenda.” the sugar tax, to see how they interfaced 12 grams of sugar down to four, and 88%
with consumers. Market testing is of people preferred it. We were able to
TAXING SUGAR PROBLEM one thing but many things fail when go into peak with the same full-body
While The BevCo has achieved much in consumers finally come into contact with mouth feel, at a competitive price point,
its short life, there have been challenges them, but we had no adverse feedback which is better for the consumer. It stood
that needed swift and decisive action or anything else. When the sugar tax up against the tests and has been a real
– primarily the Sugary Beverages Levy, came about, we were very comfortable success,” says the CEO.
introduced in April 2018. with our ability to deliver a product
Known as the ‘sugar tax’, the idea that consumers wanted. On the 31st of SPARKLING WHILE OTHERS GO FLAT
is to help reduce health concerns in March, we closed production for a day Demonstrating the typical
South Africa that are attributed to over so there was absolute clarity between entrepreneurial fashion that Benjamin
consumption of sugary goods. As the pre and post sugar tax with us only wants to flow throughout The BevCo,
sub-Saharan African country with the producing below the levels required for the CEO is not willing to let a slow South
highest rate of adult obesity, the country the authorities.” African economy put a dampener on the
certainly has work to do. The sugar This success was almost unmatched company’s growth prospects.
tax was fixed at 2.1 cents per gram of by The BevCo’s competitors. Preparation, The country has not posted
innovation, and ongoing communication significant growth figures for almost
with customers allowed the company to a decade, and has also been through
// ANYTIME A deliver exactly what the market required. several technical recessions. But with
COMMERCIAL “It has certainly given me a boost as I the political situation now seemingly
know that we can try new things and be stable, and with business very much
IMPERATIVE MEETS successful,” says Benjamin. at the forefront of government’s
A SUSTAINABLE Now, The BevCo is going approach to economic development,
even further and exploring ways now is a good time for companies with
IMPERATIVE, YOU’VE to constantly adapt the product a strong strategy.
portfolio so that health conscious,
GOT A WINNER FOR taste conscious, and value conscious
BUSINESS // consumers are all satisfied. Continues on page 10

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 SUSTAINABILITY, INNOVATION and ENVIRO-FRIENDLY OPPORTUNITIES

It is our intention to be a supplier that looks at the Safest and most economical way to wrap a pallet. This does not
mean that we must be the cheapest per roll or per kilogram, rather we want to offer a package whereby the full
value of packaging is achieved. This means that we can offer the knowledge of how plastic and the wrappers should
be run, without having to rely on the OEM to always be on site to do adjustments. As plastic specialists we are
backed by our NEWTON TEST CENTRE who are on hand to offer solutions to all types of packaging and machinery.

With the use of technical development Taigan has been able to offer innovation through the fact that we have moved
from a 3 layer cast stretch film to now being the Company that offers 33 and 55 layer NANO stretch film to the
South African market, a feat that no other manufacturer can match. This development was made in order to look
at reducing the amount of plastic required to wrap a pallet without detracting away from the importance of why
wrapping is being used. It is not a sake of downgauging to protect manufacturers margins, it is done to improve
packaging by using high tech raw materials that allows for NANO technology to be successful worldwide.

Sustainability is a key influence for any market. The understanding that if we did not look at improving efficiencies
in extrusion and the correct use of raw materials, this would leave us at a stagnate situation. It is for this reason
and the belief that for us to succeed, new equipment such as 2 more 55-layer NANO CAST LINES are on order or
being installed, thus offering a monthly extrusion tonnage of 10000 tonnes.

Traceability also has developed with NANO extrusion and we are able to track the exact extrusion conditions of
each roll and at what position on the shaft by checking the BARCODE in each roll core. This information gives the
DNA of each roll extruded and supplied to our customers. Rolls of our NANO film is protected by individual cartons,
although this might seem a bit expensive handling conditions are eliminated, and no waste occurs due to damaged
edges.

NANO film is 100% recyclable. The film is OXO degradable which means it is not BIODEGRADABLE, but the portions
break down into smaller pieces which makes it easier to recycle. When we supply our hand wrap rolls it is our
intention to create a footprint whereby we look to recycle the returned core and offer a savings to the customer. Our
hand wrap cores are manufactured in Green for identification.

NANO film is ENVIRO FRIENDLY as it is manufactured to offer thinner film which means less plastic is needed to
contain a pallet of goods. The correct use of raw material in extrusion by adding layers such as 33 or 55 allows for
the strength and puncture to be maintained and the integrity of the film to be no compromised. This is a first for
our country and we are market leaders to promote our social responsibility.

The importance of correct wrapping needs to be understood. Stretch film has been developed to hold goods on a
pallet in the SAFEST way but by overstretching the film can result in unstable pallets of goods being transported. It
is for this reason that we offer load RETENTION testing at each trial so that we can determine the correct amount
of plastic to apply and at the correct cycle which should achieve a maximum stretch value of 5.5 – 6um around a
pallet. Thinner or thicker offer other challenges such as waste or falling loads. The correct settings on automatic
wrappers are the key to offering effective cost savings.

A full cost analysis is always conducted by our team to set standards and hold us accountable for our product
performance .

OUR GOALS :

- Always look at saving money in a responsible way

- Innovation and understanding customer needs

- Technical development and training at each site

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- 100% commitment to all customers to be their packaging solution and partner

- Introduce our T.nano55 as the next stage of enhancing the packaging at reduced costs

- Improving on the current packaging and being partners not suppliers – ADD VALUE

- Taigan follows it’s triangle of trust, QUALITY, INTEGRITY and EXCELLENT SERVICE
with you the customer at the centre. It is branded on all our products.

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THE NEXT GENERATION
OF STRETCH FILM

THE t-nano RANGE OF 33 AND 55 LAYER

STRETCH FILM IS THE NUMBER ONE
CHOICE FOR SUSTAINABILITY, LOAD
STABILITY AND SAFETY.
Contact us today and we’ll show you how the innovative
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consideration for the environment.

TAIGAN.CO.ZA • JHB: +27 11 974 1811 • CPT: +27 21 948 8215

INDUSTRY FOCUS: MANUFACTURING

Isando Johannesburg DC

Continued from page 7 being put into the ground because of our line has been considerable and we
long-term belief in the returns. expect it to carry on like that. But, we
“There are headwinds but that is “Leadership is South Africa has to see the resilience needed to do this as a
no excuse. There have been headwinds stand up and realise that we can’t wait competitive advantage. When there are
over the past few centuries and people for someone else to help us. We have to headwinds in the economy, not many
have found ways to thrive, growing really create individual businesses that behave people are successful, so we see it as an
sustainable and powerful companies. I ethically, drive growth, allow for inclusion opportunity,” he adds.
can’t see why we wouldn’t be able to do of everybody, and behave like first-world
that,” says Benjamin. organisations – as trends move, we can’t COMMUNITY COMMITMENT
“Anytime there is an election, there get stuck in the past,” he adds. Despite having a national footprint and
is a degree of uncertainty but that It is this attitude of success during a major workforce, The BevCo remains
normally passes. There are not normally difficult times that help positivity to a committed, proudly South Africa
massive changes, and I don’t think continue. “We are outperforming the business with customers, consumers
there has been in South Africa. Getting industry,” states Benjamin. and communities at its heart. The goal
the election out of the way is business “We have a rallying call about rising
positive, people now have a degree up. We rise up ahead of the economy,
of certainty and direction. President we rise up ahead of the industry, and // WE HAVE IDENTIFIED
Ramaphosa has been clear on many we rise up ahead of our own previous
results. That has resonated quite well and
POCKETS OF
fronts, especially being business friendly,
but that doesn’t mean that everyone is. we are on track to achieve our business EXCELLENCE WHICH
There has been an acknowledgement case. Anytime you go through M&A you
that government can’t provide growth, are worried that people have prepared
WE THINK WE CAN
employment and everything. Business their business for sale, and in FMCG SHARE AND USE
will be the engine, whether it’s large or you can stock the market. We seem to
small and medium enterprises. People have navigated the initial nine months TO IMPROVE THE
know that it’s now worthwhile investing
– we definitely know that. Our canning
well but we are concerned about the
economy going forward. The amount
OPERATING LEVEL OF
line represents many millions that are that we have had to do to protect bottom THE BUSINESS //

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 THE BEVERAGE COMPANY

of the business has never been to install There is a centre in Braamfontein that is It’s difficult to find drawbacks in this
a corporate feel into daily operations. focussed on helping people with autism exciting young business. With soft drink
It has never been suggested that a and we saw that as a very tangible way to consumption, and associated effects on
ubiquitous power brand should take show commitment locally to something health, under a greater spotlight than
over all manufacturing and distribution; more than just profit,” Benjamin explains. ever before, only those that do things
in fact, the opposite is true – The BevCo The BevCo has also established right will be truly successful.
wants to keep a plethora of local hero The Beverage Company Education “We have an extraordinary team of
brands available to ensure it has a stake Fund which awards scholarships to highly-competent, highly-experienced
in a wide range of communities around disadvantaged students. 39 young individuals who are passionate about the
southern Africa. people who were struggling to access business and committed to our strategy.
“One of our driving forces remains education will benefit from the fund in Plus, we have a portfolio of much-loved
relevance in the local communities,” 2019. In the future, this investment will brands which offer excellent quality at
states Benjamin. continue, reaching R750,000 by 2020. an affordable price. We also have hugely
Just one example of how the In the future, The BevCo is without supportive shareholders (in Ethos and
company has excelled with community doubt a business to watch. Ambitious, Nedbank) who have partnered with us
upliftment came after The BevCo innovative, nimble, ethically driven, – both financially and strategically – and
partnered with South African golfing star and committed to South Africa, a plan share our strategic vision and vigour.
Ernie Els to contribute towards support has been made for every scenario. The “Yes, it’s going to be hard work.
for children living with autism. For every ultimate goal is to play a more significant But we are resilient and accustomed
500ml bottle of Refreshhh water sold, role in the industry in Southern Africa, to rolling up our sleeves,” Benjamin
The BevCo donates 25c to the Els for and currently everyone in the business is concludes.
Autism Foundation. satisfied with progress.
“We want to find ways to contribute “Looking at the level of innovation
that are relevant to our communities since the acquisition of LGB, we’ve
and impacts on them. The autism probably averaged around one per day,
prevalence rate is exceptionally high and whether it’s pack size, flavours, sugar tax
is growing globally. It has no boundaries reformulations, source of water supply – WWW.THEBEVERAGECOMPANY.CO.ZA
in economics, race, age or anything else. that is an incredible rate,” says Benjamin.

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