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
manufacturing business
in South Africa is coming
up with a plan that will delight
customers by delivering a range of
locally prominent brands combined
with internationally-recognised
staples. A forward-thinking and
modern organisation, The Beverage
Company (The BevCo) was officially
established in 2018 after the merger
and acquisition of several regional
players, creating a nationally
significant business.
Headed by industry veteran
Michael Benjamin, The BevCo has,
in a short period of time, utilised
the existing infrastructure at its
disposable to create a powerful
South African business with
exposure across all of the southern
African nations.
Right now, there are plans
bubbling away behind the scenes
that will see The BevCo grow further
to take on some of the mighty names
in the highly competitive industry,
while all the time remaining
sustainable and responsible.
Michael Benjamin CEO
4 / www.enterprise-africa.net
STRENGTH IN DEPTH
In 2018, after years of planning and
strategizing, The BevCo was launched
after a consortium, led by Ethos,
acquired Little Green Beverages (LGB)
and Softbev, two of the country’s large
manufacturers and brand owners.
LGB was strong in the Eastern Cape,
Mpumalanga and Gauteng, and Softbev
was strong in KZN, the Western Cape,
and Gauteng through its subsidiaries
Shoreline and Quality Beverages.
With the acquisitions came important
brands including Coo-ee, Jive, Refreshhh,
Reboost, 7UP, Capri-Sun, Mirinda,
Mountain Dew, Pepsi and Pepsi Max.
This created a platform from where
The BevCo could become an able
challenger. Today, the business has
more than 1000 employees across five
manufacturing locations in all of South
Africa’s major metros.
CEO Michael Benjamin, a big
sports fan, talks to Enterprise Africa
about the ambitions of this young and
vibrant company, using the marathon
as his analogy.
“I don’t sleep happy at night
knowing we are number two. Others are
looking to take our share, so we always
need to be growing our business – if
you’re not growing then you’re dying,”
he says.
“I would love to be number one
but we have to stand back and look
at whether that is a realistic dream in
a five year period – and in that time
frame it is unrealistic. By any measure,
Coca-Cola is the leader in the market. I
always say it’s like running a marathon.
If you can run the marathon in four
hours, that is great. But if you want to
get to world-class levels, there are many
hurdles to overcome. As you get quicker
and quicker, things become slightly
easier. That is the journey we are on.
We need to concentrate not only on
market share but our building blocks of
penetrating each market, making our
brands relevant, investing behind the
scenes – whether that is refrigeration,
communication, or ensuring product
quality. By doing all the right things, we
will get to grow the business, but you
can’t preordain growth or market share.
There is a realisation that we are going
through the hard yards and you can’t
wave a wand to achieve success.”

PACEMAKERS
A strategic decision was taken a long
time in advance of the founding of
The BevCo to ensure that the whole
organisations stays thirsty for success.
This decision saw an Exco and
management team appointed that has
impressive industry experience but has
not been fatigued. It is packed with
energy and has been given freedom to
go out and build on a robust platform.
“Within these businesses, there
are incredible entrepreneurs and
entrepreneurs tend to move with speed –
we don’t want to lose that,” says Benjamin.
“The collective leadership has
a very sough-after track record,” he
adds. “We haven’t gone for ivory tower
people; we have gone for people who
have run operations and are specialists
in their fields. We have a number of
// FOR US TO STAY
RELEVANT, WE
BELIEVE WE NEED
TO GAIN A BIGGER
PORTFOLIO //
THE BEVERAGE COMPANY
8. Western Cape Marketing presentation-TBC Conference 26.9.18 Day 1
people who are midway through their
careers and have plenty of time left yet
where they want to achieve rather than
seeing this as their swansong.”
By making the entire leadership
team shareholders, The BevCo has
ensured that its top people are invested
in results. “It drives a very different
decision-making process. They are tied
to the credibility of the business and
they are invested in the growth agenda,”
says Benjamin.
Ensuring that a forward thinking
approach is instilled throughout the
organisation, leadership takes the time
every quarter to get out to each of the
company’s sites and talk to employees
face to face, in a transparent manner,
to further understand performance
statistics and look at what is working
and what is not. This is all part of a wider
vision for the business. “It all comes back
to our purpose,” explains Benjamin.
“If we get it right, each employee
will improve the financial situation for
their family through investment in skills
and their own learning. If this happens,
it will improve returns to shareholders,
and that will help us build an African
legacy of true excellence.”
TRUE EXCELLENCE
The BevCo brings an unrivalled product
portfolio to its clients. Choice is a key
factor in its offering for consumers
and, between its local heroes and
global champions, customers are given
excellent variety. But the portfolio is
never finished, and Benjamin admits
much is happening behind the scenes to
develop the product range.
“It doesn’t take a rocket scientist
to work out that there is a massive shift
in global consumer trends and these
impact our local trends. For us to stay
relevant, we believe we need to gain a
bigger portfolio. We have a number of
categories we are very actively looking
at. To give you an indication, R&D will be
quadrupled next year and that should
indicate, from a strategic point of view,
our level of investment and belief in what
we need to do to stay relevant.”
Without revealing exactly what
sort of brands are being investigated,
Benjamin says that the company is
extremely interested in global trends and
will invest accordingly.
“Health and wellness is certainly
a focus,” he says. “There are unique
challenges with water quality in
www.enterprise-africa.net / 5
INDUSTRY FOCUS: MANUFACTURING
// R&D WILL BE
QUADRUPLED NEXT
YEAR AND THAT
SHOULD INDICATE,
FROM A STRATEGIC
POINT OF VIEW,
OUR LEVEL OF
INVESTMENT AND
BELIEF IN WHAT WE
NEED TO DO TO STAY
RELEVANT //
Africa and so some categories are
about sustaining life rather than just
refreshment. There are other categories
that surround meal replacement. There
are categories that have a growing
awareness around packaging and carbon
footprints – we are looking at a wide
range of options.”
True excellence in the product range
can only be achieved if true excellence
is chased across the company’s
7. Justin Geyve Chief Commercial Officer and Ernie Els with Els for Autism Water
6 / www.enterprise-africa.net
manufacturing base. With sites in
Johannesburg, Cape Town, Durban and
East London, The BevCo has South Africa
well covered and will not look to invest
into further premises at this time.
However, true excellence is an
ongoing and everchanging journey, and
so The BevCo is looking to make the most
of its existing infrastructure, expanding
and improving what is already in place.
“We are looking at expanding our
five manufacturing facilities,” details
Benjamin. “All of our sites have different
areas where they are strong and weak.
We have identified pockets of excellence
which we think we can share and use
to improve the operating level of the
business. We are putting in canning lines
which gives us flexibility for innovation
and materially improves our canning
volume - these can be put in on existing
sites. There is not a strategic need
to go and expand our footprint, and
subsequent costs, when we do have the
facilities that we can grow and evolve.”
With reduction in plastic usage
on the radar for all manufacturers, the
canning line comes at the prefect time
for The BevCo. Aluminium cans are fully
recyclable, strong, adaptable and have
the ability to sustain carbonation.
“Anytime a commercial imperative
meets a sustainable imperative,
you’ve got a winner for business,” says
Benjamin. “The canning line gives the
ability to play in a wider market, it gives
us the ability to be better with recyclable
material, and it delivers efficiency. We
were one of the first companies, if not
the first, to go into recycled PET and the
challenge there is putting in carbonation
that lasts. Sustainability for us is not only
in packaging.”
He goes on to explain how a
wider sustainability drive is helping the
company to become efficient at a world-
class level.
“Cape Town is known for its water
scarcity. We managed to move our
water ratio down from 1.8 litres per litre
produced to 1.3 litres which is globally
world-class. We use new software which
monitors our sustainability with water,
electricity, wastage and more. The result
has been all of the figures being driven
down. Even decisions like where we
position our distribution centres have
been made with sustainability in mind.

Truck volumes, distances, centre of
gravity – everything is done to ensure
we align a commercial imperative with a
sustainability imperative.”
Structuring in this way has helped
the company to expand its presence
across southern Africa, with demand for
its brands continuing to grow. Already
available in Namibia, Botswana, Zambia,
Lesotho, Eswatini and Mozambique, The
BevCo will undoubtedly look for further
opportunities on the continent.
“It’s no secret that there is
population growth around Africa and
with that comes available disposable
income and a broader range of choice
which we can create that might not
be available in those markets,” says
Benjamin. “Because of this, growth in
Africa and bolstering exports into Africa
is most definitely part of our strategy.
All of the original entrepreneurial
businesses have developed really strong
relationships with a number of role
players in these markets, and they are
committed to a growth agenda.”
TAXING SUGAR PROBLEM
While The BevCo has achieved much in
its short life, there have been challenges
that needed swift and decisive action
– primarily the Sugary Beverages Levy,
introduced in April 2018.
Known as the ‘sugar tax’, the idea
is to help reduce health concerns in
South Africa that are attributed to over
consumption of sugary goods. As the
sub-Saharan African country with the
highest rate of adult obesity, the country
certainly has work to do. The sugar
tax was fixed at 2.1 cents per gram of
// ANYTIME A
COMMERCIAL
IMPERATIVE MEETS
A SUSTAINABLE
IMPERATIVE, YOU’VE
GOT A WINNER FOR
BUSINESS //
THE BEVERAGE COMPANY
sugar content that exceeds four grams
per 100ml, from 1 April 2019 this has
increased to 2.21 cents per gram of
sugar. The first four grams per 100ml
are levy free and fruit juices are exempt.
Initially, there was major concern among
manufacturers that the tax would hit
the bottom line hard, but for those that
were prepared and willing to innovate, a
concern has become an opportunity.
“For me, that was a major shock in
the industry,” remembers Benjamin. “We
had to decide on a strategy in a very
tense operating environment. We did a
lot of testing in the background and we
engaged widely with stakeholders. We
eventually took what we considered to
be a calculated bet by diverting all of our
R&D to developing our underpinning
consumer promise of offering as good
a taste as any competitor, at a better
price. We worked hard to make sure we
stuck to the taste promise. In November,
we put reformulated products into the
market one by one, six months ahead of
the sugar tax, to see how they interfaced
with consumers. Market testing is
one thing but many things fail when
consumers finally come into contact with
them, but we had no adverse feedback
or anything else. When the sugar tax
came about, we were very comfortable
with our ability to deliver a product
that consumers wanted. On the 31st of
March, we closed production for a day
so there was absolute clarity between
pre and post sugar tax with us only
producing below the levels required for
the authorities.”
This success was almost unmatched
by The BevCo’s competitors. Preparation,
innovation, and ongoing communication
with customers allowed the company to
deliver exactly what the market required.
“It has certainly given me a boost as I
know that we can try new things and be
successful,” says Benjamin.
Now, The BevCo is going
even further and exploring ways
to constantly adapt the product
portfolio so that health conscious,
taste conscious, and value conscious
consumers are all satisfied.
// WE HAVE A
RALLYING CALL ABOUT
RISING UP. WE RISE
UP AHEAD OF THE
ECONOMY, WE RISE
UP AHEAD OF THE
INDUSTRY, AND WE
RISE UP AHEAD OF
OUR OWN PREVIOUS
RESULTS //
“Take energy drinks which are
growing in popularity globally – we see
now as the perfect time to reformulate
and offer a healthier drink that still
matches what consumers want in terms
of taste, mouthfeel, tanginess. In October
last year, we took our biggest energy
brand, Reboost, and reformulated it from
12 grams of sugar down to four, and 88%
of people preferred it. We were able to
go into peak with the same full-body
mouth feel, at a competitive price point,
which is better for the consumer. It stood
up against the tests and has been a real
success,” says the CEO.
SPARKLING WHILE OTHERS GO FLAT
Demonstrating the typical
entrepreneurial fashion that Benjamin
wants to flow throughout The BevCo,
the CEO is not willing to let a slow South
African economy put a dampener on the
company’s growth prospects.
The country has not posted
significant growth figures for almost
a decade, and has also been through
several technical recessions. But with
the political situation now seemingly
stable, and with business very much
at the forefront of government’s
approach to economic development,
now is a good time for companies with
a strong strategy.
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
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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
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NANO film is 100% recyclable. The film is OXO degradable which means it is not BIODEGRADABLE, but the portions
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NANO film is ENVIRO FRIENDLY as it is manufactured to offer thinner film which means less plastic is needed to
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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

8 / www.enterprise-africa.net
- 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

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8 / www.enterprise-africa.net
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INDUSTRY FOCUS: MANUFACTURING
Isando Johannesburg DC
Continued from page 7
“There are headwinds but that is
no excuse. There have been headwinds
over the past few centuries and people
have found ways to thrive, growing really
sustainable and powerful companies. I
can’t see why we wouldn’t be able to do
that,” says Benjamin.
“Anytime there is an election, there
is a degree of uncertainty but that
normally passes. There are not normally
massive changes, and I don’t think
there has been in South Africa. Getting
the election out of the way is business
positive, people now have a degree
of certainty and direction. President
Ramaphosa has been clear on many
fronts, especially being business friendly,
but that doesn’t mean that everyone is.
There has been an acknowledgement
that government can’t provide growth,
employment and everything. Business
will be the engine, whether it’s large or
small and medium enterprises. People
know that it’s now worthwhile investing
– we definitely know that. Our canning
line represents many millions that are
10 / www.enterprise-africa.net
being put into the ground because of our
long-term belief in the returns.
“Leadership is South Africa has to
stand up and realise that we can’t wait
for someone else to help us. We have to
create individual businesses that behave
ethically, drive growth, allow for inclusion
of everybody, and behave like first-world
organisations – as trends move, we can’t
get stuck in the past,” he adds.
It is this attitude of success during
difficult times that help positivity to
continue. “We are outperforming the
industry,” states Benjamin.
“We have a rallying call about rising
up. We rise up ahead of the economy,
we rise up ahead of the industry, and
we rise up ahead of our own previous
results. That has resonated quite well and
we are on track to achieve our business
case. Anytime you go through M&A you
are worried that people have prepared
their business for sale, and in FMCG
you can stock the market. We seem to
have navigated the initial nine months
well but we are concerned about the
economy going forward. The amount
that we have had to do to protect bottom
line has been considerable and we
expect it to carry on like that. But, we
see the resilience needed to do this as a
competitive advantage. When there are
headwinds in the economy, not many
people are successful, so we see it as an
opportunity,” he adds.
COMMUNITY COMMITMENT
Despite having a national footprint and
a major workforce, The BevCo remains
a committed, proudly South Africa
business with customers, consumers
and communities at its heart. The goal
// WE HAVE IDENTIFIED
POCKETS OF
EXCELLENCE WHICH
WE THINK WE CAN
SHARE AND USE
TO IMPROVE THE
OPERATING LEVEL OF
THE BUSINESS //

of the business has never been to install
a corporate feel into daily operations.
It has never been suggested that a
ubiquitous power brand should take
over all manufacturing and distribution;
in fact, the opposite is true – The BevCo
wants to keep a plethora of local hero
brands available to ensure it has a stake
in a wide range of communities around
southern Africa.
“One of our driving forces remains
relevance in the local communities,”
states Benjamin.
Just one example of how the
company has excelled with community
upliftment came after The BevCo
partnered with South African golfing star
Ernie Els to contribute towards support
for children living with autism. For every
500ml bottle of Refreshhh water sold,
The BevCo donates 25c to the Els for
Autism Foundation.
“We want to find ways to contribute
that are relevant to our communities
and impacts on them. The autism
prevalence rate is exceptionally high and
is growing globally. It has no boundaries
in economics, race, age or anything else.
THE BEVERAGE COMPANY
There is a centre in Braamfontein that is
focussed on helping people with autism
and we saw that as a very tangible way to
show commitment locally to something
more than just profit,” Benjamin explains.
The BevCo has also established
The Beverage Company Education
Fund which awards scholarships to
disadvantaged students. 39 young
people who were struggling to access
education will benefit from the fund in
2019. In the future, this investment will
continue, reaching R750,000 by 2020.
In the future, The BevCo is without
doubt a business to watch. Ambitious,
innovative, nimble, ethically driven,
and committed to South Africa, a plan
has been made for every scenario. The
ultimate goal is to play a more significant
role in the industry in Southern Africa,
and currently everyone in the business is
satisfied with progress.
“Looking at the level of innovation
since the acquisition of LGB, we’ve
probably averaged around one per day,
whether it’s pack size, flavours, sugar tax
reformulations, source of water supply –
that is an incredible rate,” says Benjamin.
It’s difficult to find drawbacks in this
exciting young business. With soft drink
consumption, and associated effects on
health, under a greater spotlight than
ever before, only those that do things
right will be truly successful.
“We have an extraordinary team of
highly-competent, highly-experienced
individuals who are passionate about the
business and committed to our strategy.
Plus, we have a portfolio of much-loved
brands which offer excellent quality at
an affordable price. We also have hugely
supportive shareholders (in Ethos and
Nedbank) who have partnered with us
– both financially and strategically – and
share our strategic vision and vigour.
“Yes, it’s going to be hard work.
But we are resilient and accustomed
to rolling up our sleeves,” Benjamin
concludes.
WWW.THEBEVERAGECOMPANY.CO.ZA
www.enterprise-africa.net / 11
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