CCA’s Shane Richardson Reveals Forecasts for Second Half of FY16

August 29, 2016
By Alana House
Coca-Cola Amatil (CCA) announced its FY16 half year results last Friday. The group reported a positive 3.2 per cent increase in Earnings Before Interest and Tax (EBIT) to $326.9 million, while the company’s Alcohol and Coffee business reported growth in EBIT by 33.6 per cent.

In an interview with drinks bulletin, CCA’s Managing Director of Alcohol and Coffee, Shane Richardson, revealed his forecasts for the business for the second half of the financial year, including the group’s Fiji rum business, beer partnerships, RTDs and coffee.

drinks bulletin: What are your forecasts for the Alcohol and Coffee business in the second half of the financial year?

Shane Richardson: We wrote a plan a number of years ago and we’re on track to deliver against that plan, which involves ensuring that we continue to focus on new growth opportunities for the division and it’s very pleasing that across all of our respective businesses, whether it’s here in Australia in alcohol or coffee, or in our other markets, being the Pacific, each one is delivering good growth.

DB: What opportunities do you see for growth over the next 6 months?

SR: If you look at our spirits and RTD business in Australia, we have a beautiful and premium portfolio of whiskies that has got enormous potential. It’s got brands like Canadian Club, which continues to surprise everyone by its continual growth and it’s getting to the point of becoming an incredibly powerful brand.

We entered the beer business just over two years ago and we are seeing some really solid, continual penetration of the market with our brand Yenda and also our partner brand Molson Coors with Blue Moon and Coors, as well as Samuel Adams.

With coffee, I would say that we’ve really turned that part of our business around. A lot of work has been done in reengineering the look of the brands and the architecture of the portfolio we have. We’re seeing really strong growth both in our bean business through the cafe channel, as well as in our entry into the capsule market through both our Nespresso Compatible and our Caffitaly format.

In our Paradise business, we have two breweries and one distillery and within that we have over 90 per cent share in beer and RTD, and we’re still seeing very strong growth in both of those categories. We also have a spirits business in Fiji, from which we’re about to launch a new brand called Fiji Rum Co. in Australia and other markets around the globe. These are award-winning products that are really well respected by the consumer.

DB: Do you see CCA changing its market position in the beer category over the next 12 months and can we expect any new partnerships within the category?

SR: We are currently in a couple of partnerships within our beer portfolio. There’s always going to be continual change in the beer market, but we’re very focused on delivering for our partners and our own brands.

DB: How does CCA view the RTD category and has the company been able to arrest the decline in RTDs?

SR: The category has been under stress over the last couple of years and innovation, like our recent release of the Jim Beam Citrus Highball, where we’re looking at bringing new consumers into the category and providing another purchase occasion for existing consumers, shows our commitment to finding new ways to grow this segment of the market. You will see continual innovation from us to bring new consumers into the RTD category.

DB: Do you see potential for coffee in the licensed channel?

SR: Absolutely. As a nation, we have a very well-developed coffee culture and some of our partners often come over to see the future trends within coffee. I think the ability for venues to deliver a quality experience to the consumer is an opportunity for continual growth of that category and the licensed channel without a doubt is a growing space in which consumers are buying coffee.
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