Brazil's Administrative Council for Economic Defence (CADE) has approved without restrictions the creation of a joint-venture between beer maker AmBev, a subsidiary of Belgium-based Anheuser-Busch InBev, and Whirlpool Corp., one of the world's leading manufacturers of household appliances. The venture will develop and produce a multi-beverage B-blend machine allowing users to produce beer and a variety of soft-drinks using capsules.
The approval for the joint-venture was filed by CADE and published today in Brazil's Official Daily of the Union. Financial details of the deal were not disclosed. According to the antitrust regulator, "the deal was settled between the two companies for the design and development of an appliance which will expand the range of capsules available for production of soft drinks, sports drinks, energy drinks, juices, beers and malt drinks."
AmBev and Whirlpool will each have 50% ownership stakes in the new company, which will also sell capsules for the B-blend machine and other related products in Central America, except Mexico, the Caribbean and South America. Brazil is the second-largest market for Whirlpool Corp. after the U.S.
In 2014, appliances maker Brastemp, which belongs to Whirlpool Corp., had already announced the launch of a blend machine that produces up to 24 different beverages using capsules, and also produces purified still and sparkling water.
The beverage blend machine business is taking off in Brazil, but is still largely dominated by coffee-makers like Nespresso, a brand owned by Swiss food giant Nestle SA. Research by Nielsen indicated that consumption of coffee in capsules increased 46.5% between 2012 and 2013 in Brazil. Still, only 0.6% of the country's households have a beverage blend machine, which shows that there is still plenty of room for growth.
Last year, the Coca-Cola Company announced a partnership with Green Mountain Coffee Roasters, maker of the popular Keurig single-serving coffee machine, to produce Coca-Cola products in single-serving plastic pods, also known as K-cups, for use with Green Mountain's forthcoming Keurig Cold at-home beverage system. As part of the deal, the Coca-Cola Company paid $1.25 billion for a 10% stake in Green Mountain, and will help market the new product, which is set for launch between April and September.
Recently, AmBev acquired control of Brazilian craft beer maker Wals for an undisclosed sum. AmBev's shares closed 1.94% higher in Tuesday's trading in the Ibovespa, Brazil's main stock index. So far in 2015, the company's shares are up 14%, while the Ibovespa is up 2.3%. AmBev is controlled by billionaires Jorge Paulo Lemann, Marcell Herrmann Telles and Carlos Alberto Sicupira.
