Nestle and Coca-Cola boost drinks venture

Nestle and Coca-Cola boost drinks venture

ZURICH (Reuters): Swiss food group Nestle SA and U.S. beverages concern Coca-Cola Co said on Tuesday they would boost their coffee and tea joint-venture partnership by adding new brands and entering new markets.

The 50-50 joint venture would be run as an independent entity from headquarters in Zurich.

Marcel Rubin, spokesman for Nestle, said the ready-to-drink beverage sector was growing faster than the overall beverage sector but he declined to give details.

On top of the venture's existing Nestea and Nescafe brands, Coca-Cola would add the Tian Yu Di and Yang Guang tea businesses while Nestle would add the Belte tea business. These beverages are sold both hot and cold, in machines and in shops.

In a joint statement, the companies said the venture, now called Coca-Cola and Nestle refreshments (CCNR), would be renamed Beverage Partners Worldwide (BPW).

BPW would function as an entrepreneural unit dedicated to tapping the growth potential of emerging beverage segments, in particular ready-to-drink coffee, teas and beverages with a so- called healthful positioning, which includes herbal teas.

CCNR was formed in 1991, operates in 24 countries and is strong in the ready-to drink tea category.

With an increased brand range, BPW would have a volume base of 250 million cases. The Nestle spokesman said this was some 1.5 billion litres. He declined to give financial details.

BPW would also focus on expanding its geographical reach, looking to enter new markets -- outside Japan -- with new and existing products.

"Beverage Partners Worldwide will operate with the full commitment of its two equity partners, but with the innovative spirit, speed and culture of a start-up company," Nestle executive vice-president Carlos Represas said.

The Beverage Partners Worldwide venture would have a management team of about 60, led by chief executive Hans Savonije, a Dutch national who would be based in Zurich.