Suntory and PepsiCo to Form Joint Venture in Thailand
BANGKOK, NOVEMBER 2, 2017 ― Suntory Beverage & Food Asia Pte Ltd (Suntory), the Asia Pacific headquarters of Tokyo Stock Exchange listed Suntory Beverage & Food Limited (2587:JP), a global soft drink company, and PepsiCo, Inc. (NYSE: PEP), one of the world's largest food and beverage companies, today announced an agreement to form a beverage joint venture in Thailand.
The new joint venture is designed to build on PepsiCo's strong existing position in Thailand and to create new growth opportunities for both companies in the market. PepsiCo is one of the leading players in Thailand's growing liquid refreshment beverage market, and the alliance is intended to combine the strengths of both companies in ways that are mutually beneficial to their businesses, customers and consumers. The joint venture also positions PepsiCo to continue to transform and expand its beverage portfolio to meet consumer demand for healthier options, and incorporate Suntory’s complementary brands and broad offerings.
Under the terms of the joint venture agreement, PepsiCo’s Thailand beverage business, operated through the company International Refreshment (Thailand) Co. Ltd (IRTC), will change its name to Suntory PepsiCo Beverage (Thailand) Co., Ltd. Suntory will become a 51 percent shareholder, while PepsiCo will retain 49 percent of this formidable new alliance. Suntory and PepsiCo leaders will hold key roles in the management of the joint venture, which will serve as the bottler for both companies in Thailand. Suntory and PepsiCo have an established record of successfully working together in other markets, including the United States, Japan, Vietnam and New Zealand.
Shekhar Mundlay, CEO, Beverage Division, Suntory Beverage & Food Asia Pte Ltd. said: "Suntory views Southeast Asia as a strategic priority, which we anticipate will continue to have high growth due to rapid urbanization and a younger population relative to other regions. Within this region, Thailand stands out as a high-potential, dynamic market. PepsiCo has already established a solid foundation with its portfolio of iconic brands, excellent manufacturing and distribution system, not to mention world-class workforce. We look forward to Suntory PepsiCo Beverage (Thailand) Co., Ltd. building on this foundation to grow the business in Thailand even further through an expanded product portfolio."
Suntory has accelerated its global strategy and expanded its beverage and food business in Asia Pacific following the establishment of its regional headquarters in Singapore. Expansion into the beverage business in Thailand is a key part of Suntory's long-range plans. Suntory is also the owner of BRAND’S® in Thailand, which is one of the largest health supplements manufacturers and marketers locally and in the region. Additionally, Suntory has a strong portfolio of beverage brands including Lucozade®, Ribena®, CC Lemon®, TEA+®, MYTEA®, GoodMood® and MYCAFE®.
Adel Garas, President, PepsiCo Asia Pacific Region, said: "Thailand is a critical and strategic market for PepsiCo in the Asia Pacific region. We have a long history in the country, going back to when Thai consumers got their first taste of Pepsi in 1952. To remain competitive and position ourselves to continue to deliver sustainable, profitable, long-term growth, we must always ensure we have the right business model to meet the needs in a given market. We believe the joint venture with Suntory provides us with a strong partner and platform for continued growth in Thailand.”
In the last five years – 2012 through 2016 -- PepsiCo has invested hundreds of millions of US dollars in Thailand through its beverages and foods businesses, including two beverages and two foods manufacturing plants. PepsiCo invested in its first beverage plant in Thailand, located in Amata City Industrial Estate of Rayong Province in 2012. In 2016, it opened a second beverage plant in Thailand, located in Nong Khae Industrial Estate, Saraburi Province, with an aim to strengthen its growing beverage business in Thailand and support long-term portfolio expansion and diversification, doubling capacity of its first plant.
PepsiCo will retain marketing and innovation responsibilities for PepsiCo’s iconic beverage portfolio, so Thai consumers will still be able to enjoy their favorites -- including Pepsi-Cola, 7-UP, Mirinda, Gatorade, Lipton, and Aquafina.
PepsiCo will continue to independently operate its foods business in Thailand. PepsiCo enjoys market leadership in Thailand’s snacks category with its Lay’s, Sunbites, and Tawan brands, and intends to maintain support for the local agriculture industry, and to invest in innovation and distribution to grow its foods business across the country.
This transaction is subject to the completion of legal processes.
Pictured (left to right): Mr. Takayuki Sanno, Executive Vice President, Corporate Strategy & Business Development, Suntory Beverage & Food Asia Pte Ltd.; Shekhar Mundlay, CEO, Beverage Division, Suntory Beverage & Food Asia Pte Ltd.; Parinya Kitjatanapan, Vice President and General Manager, IndoChina Commercial Unit, PepsiCo Asia Pacific Region; Omer Malik, General Manager, PepsiCo Thailand Beverages.
About Suntory Beverage & Food
Suntory Beverage & Food Ltd (SBF) is a global soft drink company with consolidated net sales of approximately 1.4 trillion yen in 2016. Headquartered in Japan and listed on the Tokyo Stock Exchange since 2013, SBF is expanding its business with a diverse portfolio of soft drinks and globally integrated platform in five key regions: Japan, Europe, Asia, Oceania and the Americas. SBF’s vision is to be the leading global soft drink company recognized for its premium and unique brands. SBF is a core company of Suntory Group, which was founded in 1899 with consolidated net sales of approximately 2.6 trillion yen in 2016.
About Suntory Beverage & Food Asia
Suntory Beverage & Food Asia Pte Ltd (SBFA) is the APAC headquarters of Suntory Beverage & Food Ltd (SBF). Headquartered in Singapore, SBFA manages the regional business through 3 divisions, Beverage Division, Health Supplement Division and Food & Coffee Division. The Beverage Division runs the non-alcoholic beverage business in Asia. It is involved in the development, manufacture, marketing, and distribution of carbonated drinks, sports drinks, energy drinks, juice drinks, cordial, fruit-infused water, ready-to-drink coffee and tea. The products are sold in 8 countries under established brands such as Ribena®, Lucozade®, TEA+®, MYTEA®, GoodMood® and MYCAFE®. For more information, please visit www.sbfapac.com.
PepsiCo products are enjoyed by consumers one billion times a day in more than 200 countries and territories around the world. PepsiCo generated approximately $63 billion in net revenue in 2016, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than $1 billion each in estimated annual retail sales.
At the heart of PepsiCo is Performance with Purpose – our fundamental belief that the success of our company is inextricably linked to the sustainability of the world around us. We believe that continuously improving the products we sell, operating responsibly to protect our plant and empowering people around the world is what enables PepsiCo to run a successful global company that creates long-term value for society and our shareholders. For more information, visit www.pepsico.com.
PepsiCo Cautionary Statement
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For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. PepsiCo’s investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.