Matt Schwandt’s Post

Varun Beverages Ltd. (VBL), the world's largest franchise bottler for PepsiCo, has solidified its foothold in Africa by finalizing the acquisition of South Africa's The Beverage Company (BevCo). This strategic move expands VBL's reach into the South African beverage market and unlocks exciting growth opportunities. VBL values the acquisition at approximately ₹1,320 crore, gains ownership of BevCo and its subsidiaries through it. BevCo boasts franchise rights for PepsiCo in South Africa, Lesotho, and Eswatini, along with distribution rights for Namibia and Botswana. This expands VBL's existing footprint in Africa and strengthens PepsiCo's brand presence in the region. BevCo isn't just a distribution network; it brings its own established beverage brands to the table. Popular names like Refreshhh (high-caffeine drink), Reboost (energy drink), Coo-ee (carbonated drink), and JIVE (fizzy lemonade) will now be part of VBL's portfolio. This diversification broadens VBL's product offerings and caters to a wider range of consumer preferences. The acquisition signifies VBL's commitment to the African market and its vision for continued growth. With BevCo on board, VBL can leverage operational synergies, explore new market opportunities, and solidify its position as a key player in the African beverage industry. With PepsiCo's backing and BevCo's established presence, we can expect to see exciting developments from Varun Beverages in South Africa and beyond.

“Chinese hotpot chain Haidilao International Holding Ltd. announced Monday that it will launch a franchise model to further support the expansion of its restaurant network. In a filing with the Hong Kong Exchange, Haidilao said it has set up a franchise department to formulate the details of the franchise model and the business cooperation process. Franchised restaurants will be provided with central and back-office services, such as staff training, supply chain system, management experience, food safety control, brand marketing services and performance appraisal by the group, to ensure food safety as well as customer experience, the company said. Wang Ming, a franchisee in Zhengzhou, told Caixin that he is interested in joining Haidilao’s franchise network, but not clear what the company’s requirements might be. He currently operates several hotpot chain franchise restaurants as well as bubble tea chain franchise stores.” “Another franchisee operator said he expects Haidilao would have strict requirements. Founded in 1994, Haidilao restaurants are best known for providing extraordinary customer service, such as offering free manicures for waiting customers, as well as free photo printing services and leather shoe care for diners at the stores. As of June 30, 2023, Haidilao operates 1,382 restaurants in Greater China, all company owned. About 17% of its restaurants are in first-tier cities, with 40% in second-tier cities and 40% in smaller cities. In the first half of 2023, the average daily same-store sales were 77,000 yuan ($10,700). In the same period, the company reported operating revenue of 17.94 billion yuan and a net profit of 2.26 billion yuan. Haidilao expected to annual operating revenue of at least 41.4 billion yuan and no less than 4.4—billion yuan of net profit for 2023, a significant increase from 1.64 billion yuan in 2022.” “The company believes that the introduction of the franchise model will strengthen its operating capabilities, introduce high-quality resources and improve its operational efficiency while maintaining its management standards and customer experience and allowing expansion in more regions, according to the exchange filing. The restaurant industry in China faces fierce competition as operators are eager to expand quickly. According to a report of the China Franchise Exhibition, Chinese restaurant franchisees increased by 178% year-on-year in 2023. Meanwhile, higher operating and labor costs in first and second-tier cities are making chains eye expansion in smaller cities. From 2018 to 2022, the ratio of restaurant chains in first and second-tier cities has slightly contracted, while the ratio of stores in third-tier to fifth-tier cities has increased significantly, according to a report jointly released by China Chain Store & Franchising Association and food delivery giant Meituan.”

The recent rumors swirling around industry titan, Panera Bread, are of paramount importance to anyone involved in franchising, especially from the perspective of a franchise attorney who staunchly supports the maintenance of a robust and secure supply chain. Imagine a scenario where your next visit to your local Panera Bread no longer greets you with notices of their commitment to clean, animal welfare-conscious, responsibly sourced ingredients. This suggested move away from strictly pasture-raised meat and antibiotic-free poultry is purportedly aimed at reducing substantial annual expenditures, estimated at around $21 million. Additionally, there is talk of significant menu changes, which could see customer favorites like their signature flatbreads, Melt Sandwiches, Baja and Mediterranean bowls, and even their iconic croissants discontinued. As an attorney with a deep understanding of franchise law these potential moves underscore the vital importance of a well-managed supply chain. The harmony between franchisor and franchisee often hinges on the quality and integrity of the products offered to customers. The situation is further complicated by the implications of California's AB 1228 law, which exempts establishments producing stand-alone bread items from a wage increase, leading to allegations that Panera is seeking exceptions to reduce costs. While Panera Bread has remained silent on the speculations, as a franchise advisor who champions transparency and quality, I believe this potential shift, if true, could seriously impact the trust and brand loyalty that Panera has built over the years. Therefore, I am interested in hearing your thoughts on this matter. As franchise stakeholders, how would such a drastic shift in supply chain management and menu planning influence your relationship with the brand or future business decisions? #franchise #franchising

📢 𝗦𝘂𝗽𝗲𝗿𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝘂𝘀𝗶𝗻𝗴 𝘁𝗵𝗲 𝗳𝗿𝗮𝗻𝗰𝗵𝗶𝘀𝗲 𝗺𝗼𝗱𝗲𝗹 𝗯𝗲𝘄𝗮𝗿𝗲! Author: Pieter-Jan Aerts Considering that franchisees active in the food and beverage industry traditionally have a weaker bargaining power, new B2B unfair clauses have been added by the Royal Decree of 20 June 2024 (e.g. indemnity for failure to deliver, pass on promotional costs, forced operation at a loss). As the new B2B rules have been developed in response to the widespread use of these (future) unfair practices, the Royal Decree will have a profound impact on the existing food retail sector. Entry into force on 1 January 2025 (new franchise, renewal or amended) – 1 May 2025 (existing franchise). Read this article also in French (https://buff.ly/3yeTkIp) & Dutch (https://buff.ly/3Wc7eTH). #EYLaw #Belgium #B2Brules #SupermarketFranchise #CommercialLaw

Have you ever enjoyed a soft drink from a glass bottle and wondered how it all began? The breakthrough for the soft drink industry came in 1894 when Joseph Biedenharn, a candy merchant from Mississippi, USA, made a bold move that changed the way we enjoy beverages. At the time, Coca-Cola was sold only as a fountain drink, but its popularity was soaring. Biedenharn saw an opportunity and began bottling Coca-Cola in glass bottles, making it the first time the beverage was ever packaged this way. This innovation allowed Coca-Cola to be distributed more widely. While Biedenharn's bottling efforts were local, it laid the foundation for what would later become Coca-Cola’s global bottling network. In 1899, Benjamin Thomas and Joseph Whitehead secured the rights to bottle Coca-Cola across the United States, establishing the first official Coca-Cola bottling franchise. Their involvement was instrumental in expanding Coca-Cola’s distribution network, transforming the brand into a household name. Glass bottles brought several advantages: they preserved the drink's flavor, were easy to transport, and extended shelf life. While challenges like fragility and mass production existed, the benefits outweighed the risks. By leveraging the bottling franchise system, Coca-Cola's rapid growth was fueled further. Though plastic and cans now dominate the market, glass bottles still hold a special place.

Varun Beverages completes its Acquisition #Day4 of 90 days Varun Beverages is one of the largest bottler franchises outside America and has completed its acquisition of South-Africa-based "Beverage-Company"🍾(BevCo) and its wholly-owned subsidiaries on Wednesday. 🗒 19-12-23 VBL announced the 100% acquisition of BevCo for ₹1320 crs. BevCo holds franchise rights from PepsiCo in South Africa, Lesotho and Eswatini. It also has distribution rights in Namibia and Botswana. 🗒 27-03-24 Company finally announced the completion of its acquisition. Now it's an official subsidiary of VBL. The company has also issued a corporate guarantee of ~Rs 660 crore to secure credit facilities extended to BevCo by the FirstRand Bank. 📰 About BevCo (Non-alcoholic beverages) >BevCo, brings in local brands such as Refreshhh, Reboost, JIVE, and Coo-ee with a high local presence. >BevCo currently has 5 facilities and operates at a capacity of 3600 bps (bottles per minute). 🔋 Impact > The company is increasing its footprints in African regions, and now its presence in 10 different counties (other than the Indian subcontinent). > South Africa is a developing country with heavy beverage consumption and minimum weather effect and it is expected to grow at 5.6% CAGR from 2024-2027 The company is expanding rapidly in Africa to reduce the impact of weather on its sales, particularly during unexpected monsoon seasons in India. However, rising crude prices remain a concern for the company as PET resin is the key ingredient for the packing and bottling of beverages. What are your thoughts on this? Follow me for more FMCG news (Aryan Mahi) ----------------------------------------------------------------------------------- #finance #news #india

Philippine fast-food franchise operator Shakey's Philippines (Shakey's Pizza Asia Ventures, Inc.) is setting plans to expand its operations in the United States by incorporating a subsidiary in the local market. In a recent disclosure, SPAVI said that the intended principal activities shall include owning and operating stores and franchises, as well as to market Shakey’s Group’s products and brands. #marketexpansion #fastfood #businessoperation ------ -[Conferences] Our "What's NEXT" series is in full swing for 2024 and 2025, and will be held in Indonesia, Malaysia, Philippines, Singapore, and Hong Kong to lead the discussion on the future of the marketing industry in the region. Check out our events lineup HERE: https://bit.ly/3AOYWKA -[Webinar] Learn more how industry experts delve into the transformative power of conversational marketing to forge deeper, more personalised relationships. Register for on-demand access to this webinar HERE: https://bit.ly/4dI06WE

McDonald's’s largest global franchisee is working on a 20-year renewal agreement Arcos Dorados expects to add 90 to 100 units in 2025 Alicia Kelso Nation's Restaurant News Arcos Dorados Holdings Inc., Latin America’s largest restaurant company and the world’s largest independent McDonald’s franchisee, said it will renew its master franchise agreement with the quick-service giant. Arcos Dorados received a renewal notice from McDonald’s Aug. 1 to replace the parties’ existing MFA with a new, 20-year MFA to be effective Jan. 1, 2025. The franchisee shared its intention to exercise its renewal option on Monday and the parties are now working to finalize the new agreement. In addition to renewing the partnership through Jan. 1, 2045, the agreement is also expected to include a 6% royalty rate for the first 10 years, 6.25% for the subsequent five years, and 6.5% for the final five years. In addition to a steady royalty rate for the next decade, Arcos Dorados and McDonald’s expect the renewed agreement to support additional growth in the franchisee’s 20 existing countries and territories, with approximately 90 to 100 new units expected to open in 2025. Late last year, McDonald’s announced plans to target a 50,000-unit global footprint by 2027, or about 10,000 more locations than it has today. If this goal comes to fruition, it will mark the fastest period of growth in the company’s 69-year history. For its part, Arcos Dorados operates nearly 2,400 restaurants throughout Latin America and the Caribbean. The franchisee became a publicly-traded company on the New York Stock Exchange in April 2011. Its current market capitalization is $1.8 billion, while its share price has grown steadily by about 60% in the past 10 years. On the news of a renewal agreement Tuesday morning, Arcos Dorados’ share price jumped 16%. https://lnkd.in/eQdJTN6n

In an interview for Delish's analysis of "The 10 Most Lucrative Fast Food Franchises Of 2024," I highlighted the importance of financial transparency and innovation in franchise selection. While strong brand recognition is undeniably powerful, as seen with giants like McDonald's, Subway, and Dunkin', I believe the fast food industry stands at a crossroads where evolving consumer demands and technology integration will redefine success. #FastFood #IndustryInnovation #BrandLoyalty

Swire Coca-Cola posts strong performance in Vietnam Swire Coca-Cola, a wholly owned subsidiary of Swire Pacific, posted a strong performance in Vietnam in 2023 following the acquisition of the Vietnamese franchise. This figure sits behind mainland China with almost 1.43 billion unit cases and the United States with 233 million unit cases. A unit case comprises 24 8-ounce servings. Regarding per capita consumption, Vietnam has the lowest figure among all six markets under the management of Swire Coca-Cola at 37 unit cases. The US takes the lead with 260 unit cases. The acquisition of the franchise business in Vietnam was completed in January 2023. Swire Coca-Cola now owns and operates Coca-Cola Beverages Vietnam, which has three bottling facilities in Vietnam. Swire Coca-Cola continues to expand its footprint in Southeast Asia. In February, it conditionally agreed to acquire a majority stake in ThaiNamthip Corporation bottling businesses in Thailand and Laos for an aggregate consideration of approximately $1.18 billion.