Italian beverage group, The Massimo Zanetti Beverage (MZB) Group has fully acquired local coffee brand Boncafé for a total value of US$85 million.
As a result, the MZB Group will reinforce its presence in the southeast Asia markets, with particular focus on Singapore, Malaysia, Hong Kong, Indonesia, Vietnam, Cambodia, Thailand and the UAE.
"With this acquisition,” Massimo Zanetti, president of the MZB Group said: “the group will have the opportunity for further expansion in the Asian market, ensuring our production and distribution capacity is sufficient to meet the growing demand for coffee in the area.”
He added that the integration of the Boncafé brand within the MZB Group will happen without making drastic changes to the “successful business model and without changing its brand name, which is already well-known in the region nor the top-notch management and workforce."
Connie Huber-Ting, group chairperson, Boncafé Group of Companies also told Marketing that Boncafé had been looking for opportunities to expand its brand presence across more markets. Huber-Ting added that over the past few years, the brand saw consistent revenue growth and the stakeholders were eager to take the brand to the next stage.
Hence, the KPMG Corporate Finance team was engaged in the acquisition process nearly 6-8 months ago.
Meanwhile, the core management and marketing team will continue to stay with the company and the marketing duties will continue being handled internally and locally.
What does this mean for Singaporean brands
Boncafé is not the only local brand to recently get acquired by a global player. Recently French private equity group L- Capital also took a major bite out of Crystal Jade Group, Singaporean club Kudeta and home grown shoe brand Charles & Keith.
Other home grown brands such as Tiger beer (Heineken) and Robinsons (UAE's Al-Futtaim Group) have also been lapped up by foreign entities. This begs the question: Are Singaporean brands are finally attracting global attention?
Keith Timimi, chairman of of VML says that this is only the start of the trend and ASEAN is only going to grow in importance. Bigger acquisitions are set to hit and local brands should buckle up and enjoy the ride as it might just be great for the brand.
However Lawrence Chong, CEO of Consulus argues that strong companies do not usually sell their brands. And while the industry speak is to always spin it as something great, it is seldom the case.
“In truth businesses only sell when they have no more ideas or the will to create shareholder value,” Chong says.
Comparing to brands such as Nestle and Shell, he says: “Imagine if SIA were to sell, would we call it a great day for Singapore?” For small countries such as Singapore, strong iconic brands can help shape the country's image.
Nonetheless, for a global group looking to explore the region, buying a Singaporean brand is one of the best strategic moves, Chong says.
Southeast Asia as a region is booming and many are investing in Singapore as a hub. Also because of the diverse cultural DNA already present in the country, brands are ‘global-ready’ from day one, making it easy to connect with even in western markets.
"This helps a global company looking to gain a foothold in this region quickly," says Chong.