07 Oct 2015 Clover enters soft drink market, buys stake in Frankie’s
The agreement will see the formation of a new company – Clover Frankie’s – which will manufacture, sell, market and distribute a range of carbonated soft drinks, hot chocolate powder and lollies using the Clover (under licence) and Frankie’s trademarks. Frankie’s portfolio includes ginger beer, cream soda and cloudy lemonade.
Clover will hold 51% of the new venture with Frankie’s owning the remaining 49%. Clover has the option to acquire the remaining issued share capital in the future at a purchase price “to be calculated using an already-agreed formula”.
Clover chief executive, Johann Vorster, said: “Apart from the brand synergies, this acquisition provides Clover with an important platform from which to launch into carbonated soft drinks and other value added branded ranges. Our collaboration with Frankie’s allows us to do so measuredly through a manufacturer uniquely positioned between niche and every day soft drinks.”
Mike Schmidt, co-founder of Frankie’s, added: “This deal represents a huge opportunity for the Frankie’s brand. Whilst, on one hand, it was an emotionally-tough decision to part with the brand that my wife, Paula, and I have spent the past nine years growing, on the other we knew that this was absolutely the right thing and more importantly the right time to do this deal. As shareholders in Clover Frankie’s we are very confident that the brand will retain its unique character and will continue to grow from strength to strength.”
Frankie’s currently out-sources its sales, merchandising and production function.
“With 80% of historical sales happening in Gauteng, KwaZulu-Natal and the Western Cape, we are confident that Clover Frankie’s will benefit tremendously from the wider national footprint, additional listings and sales and merchandising expertise in Clover’s distribution network,” added Schmidt.
Here Clover CEO, Johann Vorster, speaks to Business Day TV’s Alishia Seckam about the group’s entry into the soft drinks market…