Chill Beverages’ CEO bows out
Long4Life, Brian Joffe’s investment group, has announced the resignation of its CEO of its Chill Beverages subsidiary, Grant Hobbs, amid a shakeup in its beverages division.
Long4Life is restructuring its beverages to optimally improve returns, the group said on February 3. Current COO John Steyn will step in as acting CEO immediately.
Long4Life had reported that trading profit at Chill Beverages, which it acquired in November 2017, had fallen in its six months to end-August 2019.
“Chill Beverages’ investment in production capacity and plant upgrades, with increased expenditure in marketing and advertising has not yet been matched by increased sales,” the company said.
“Therefore, while revenue and volumes increased against the prior period, underutilised capacity with the increased expenditure resulted in a decline in the trading profit of the division during this period,” the group’s financial statement reads.
On paper, Chill has some compelling bands across mixers (the Fitch & Leedes range), energy drinks (Score and MiWater), niche soft drinks (Bashews), bubbly in a can (Chateau Del Rei) and mineral water.
The problem, though, is that competition in these beverage categories is intense – and likely to intensify if consumer spending starts to dry up. Compounding the problem is that Chill is up against formidable rivals – which, arguably, would have a lot more firepower if price war hostilities broke out.
Additional reading: Long4Life buys Chill Beverages
In morning trade on 3 February the company’s share price was down 0.27% to R3.72, having lost 7.69% so far in 2020.
Source: BusinessLive.co.za; Chill Beverages