Distell acquires International Beverage Company to increase US presence

By Erin Smith

Published: 07 October, 2014

Distell Group, South Africa's largest drinks producer, has acquired International Beverage Company in Atlanta, Georgia in an effort to grow its presence in the US market.

The acquisition of IBC, which was bought for an undisclosed sum, allows Distell to assume US import rights for all of its own single malt Scotch whisky brands and will help to expand the reach of its US sales force.

The newest acquisition is part of a larger strategy for Distell that looks to expand by setting up export platforms in key markets to help drive growth through well established routes to market.

Speaking exclusively to Harpers.co.uk in Glasgow in July, Richard Rushton, the managing director of Distell, said: "If you look at the evolution of the business, particularly since 1994, it has built a very solid South African and Southern Africa business. What we built since then is growing export platforms in pockets to critical markets for us around the world. For wine, we have done a good job of building a strong foundation in markets like Sweden, the Nordics, the UK and Canada. So we already have brands that are well recognised and established in many of these markets. It is these platforms that we need to start leveraging and exploiting more."

Richard Rushton

Acquiring assets in order to expand is a dramatic shift for the company and a key part of its growth strategy. Besides the IBC acquisition and last year's purchase of Scotland's Burn Stewart Distillers, the company has also expanded in Africa when it agreed to acquire a 26% stake in KWA Holding East Africa Limited, Kenya's foremost spirits manufacturer, bottler and distributor.

Reflecting on the recent Burn Stewart acquisition, Rushton told Harpers.co.uk: "This was one of the last available Scotch whisky acquisitions and I must say we made a strategic decision and play that was exceedingly important for Distell. Without doubt it was the right one."

But buying new businesses does not always translate to accelerated growth instantaneously. Distell must develop a new set of skills to establish the right routes to market. Rushton said: "A couple of things have changed in the world of Distell since the early 1990s. First we began to start acquiring assets away from home and outside of South Africa like Burn Stewart. The acquisitions of those businesses and particularly Burn Stewart now requires us to build a different set of skills. Particularly we are focused on establishing capabilities specifically related to routes to market in select geographies around the world where we have have opportunity to win with the right brands."

Printer friendly version