Grupo Embotelladoras Unidas, S.A.B. de C.V. (GEUPEC), Empresas Polar and PepsiCo announced that they have entered into an agreement under which they will form a new joint venture, creating a nationwide beverage company in Mexico.
The joint venture will combine PepsiCo-owned beverage manufacturing and distribution operations in Mexico with those of GEUSA, the other Pepsi bottler in Mexico and a subsidiary of GEUPEC. Empresas Polar, the largest food and beverage company in Venezuela and a longtime leading bottler of Pepsi-Cola products in that country, will have an equity stake in the joint venture.
The joint venture will offer Mexican consumers and retail customers a strong portfolio of carbonated and noncarbonated brands including Pepsi, Gatorade, 7Up, Lipton, Mirinda, Santorini, Squirt, Electropura, ePura and BeLight throughout the country. The broad scope of its distribution network will reach 950,000 points-of-sale and to 1.7 million households with its direct-to-home delivery system. Its 36,000 employees will operate 287 distribution centers and more than 17,500 sales and delivery vehicles.
"We are confident that the strong partnership between GEUPEC, Empresas Polar and PepsiCo will represent great growth opportunities, make us more competitive and innovative and allow us to provide excellent service to our customers and consumers," said Juan Gallardo, Chairman of GEUPEC.
"We are committed to playing an important role in this joint venture, supported by our operational expertise in the food and beverage industries," said Lorenzo Mendoza, CEO of Empresas Polar. "With our long-term vision and great partners, we are confident in building a highly competitive beverage company for all stakeholders in Mexico."
"PepsiCo has invested for many years in Mexico and intends to continue investing to build both its beverage and food businesses," said Massimo d'Amore, CEO of PepsiCo Beverages Americas. "PepsiCo products have been offered in Mexico for more than 100 years, and today's announcement is further proof of our commitment to Mexico."
"This new business model will allow us to create synergies and streamline our supply chain," said Pepsi Beverages Company CEO Eric Foss. "We'll also be quicker, more agile and better able to meet the changing demands of today's consumers."
GEUPEC will initially maintain a majority interest in the joint venture, whose governing board will include representatives of the three equity partners. Miguel Antor, current CEO of Pepsi-Cola Venezuela, a unit of Empresas Polar, has been designated CEO of the new joint venture. Antor's extensive experience in this market includes a 20-year career at Empresas Polar as well as serving as marketing director for PepsiCo's Mexican beverage business.
This transaction is subject to approval by the Federal Competition Commission of Mexico and is expected to be completed by the end of September, 2011.
GEUPEC is a publicly traded company in Mexico with annual sales of $890 million. With GAM, its Sugar Division and GEUSA, its Beverage Division, GEUPEC, is one of the largest integrated beverage companies in Mexico. GAM is the fourth largest private sugar producer in Mexico focusing on serving large industrial clients both in Mexico and the US markets. GAM is a pioneer in vertical supply chain integration through sugarcane production and revenue diversification via bagasse-based cogeneration. GEUSA has been a Pepsi bottler since 1986 and currently sells and distributes in about 45 percent of Mexico's territory. Its Santorini brand is the water jug market leader with more than 1.3 million homes visited weekly in Mexico via its Direct-to-Home service model. As a diversified beverage company, GEUSA addresses market needs with a combination of PepsiCo owned brands as well as third party licensed brands. www.geupec.com
PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that generate more than $1 billion in annual retail sales each. PepsiCo's main businesses—Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi Cola—also make hundreds of other enjoyable foods and beverages that are respected household names throughout the world. With net revenues of approximately $60 billion, PepsiCo's people are united by their unique commitment to sustainable growth by investing in a healthier future for people and the planet, which we believe also, means a more successful future for PepsiCo. PepsiCo calls this commitment Performance with Purpose: PepsiCo's promise to provide a wide range of foods and beverages for local tastes; to find innovative ways to minimize its impact on the environment, including by conserving energy and water usage, and reducing packaging volume; to provide a great workplace for its associates; and to respect, support, and invest in the local communities where it operates. In Mexico, beyond beverages, PepsiCo owns Sabritas, Mexico's largest savory snack company, Gamesa, one of the country's largest biscuit companies, and Quaker, a leading brand of oat-based products. For more information, please visit www.pepsico.com.
About Empresas Polar
Empresas Polar, the leading Venezuelan private consumer company, integrates a diverse portfolio in the food and beverage businesses with total sales of $6.5 billion. With 70 years of history, the company employs more than 32,000 people, with operations in Venezuela, Colombia and the United States of America. In 1996, Empresas Polar and PepsiCo formed Pepsi-Cola Venezuela, a strategic alliance to produce and distribute a leading portfolio of beverages. Empresas Polar’s social commitment is a fundamental part of its business philosophy, through the development and execution of programs that contribute to the general well-being of the communities where it operates. Fundacion Empresas Polar, the most important foundation of a private company in Latin America, is completely financed yearly by Polar Companies, focusing its programs in the areas of education, health, children’s malnutrition and community development. For more information, please visit www.empresas-polar.com.