Coca-Cola Amatil is one of the biggest soft-drink producers in the Asia Pacific region, and ranks among the world’s five largest Coca-Cola bottlers. The company has a payroll of around 15,000 people and access to a potential of more than 265 million consumers in Australia, New Zealand, the Fiji Islands, Indonesia and Papua New Guinea.
In addition to Coca-Cola’s entire portfolio, the company also produces a series of in-house brands, including the Mount Franklin spring water. Furthermore, the company operates in the foods and spirits sectors, and in the beer market as well. In 2012, its turnover came to around AU$5 billion (approximately US$4.63 billion).
In Australia, the company operates plants in almost every state. Each of these facilities produces the whole CCA range, a fact primarily due to the huge distances encountered in Australia, which would otherwise entail high distribution costs.
“Australia is like five islands,” says Bill Mossati, national manager procurement & capital project at the company. “The vast majority of the market is concentrated in the five big cities on the Australian shoreline.” 14 of the company’s production facilities are located in Australia, with the blow-moulder/filler monoblocs installed in the six largest of these, all of which are operationally self-sufficient. The remaining plants fill spring water in large containers. The company has five facilities in New Zealand.
Harnessing Relevant Expertise
PET containers arrived in Australia’s beverage market a long time ago, even though—in stark contrast to Europe—the can has continued to play the leading role in the soft-drinks market there. It accounts for about half of all carbonated soft drinks (CSDs), with around 40 percent filled in PET and 10 percent in glass bottles.
In 1997, the company was already involved with a subsidiary serving as an external producer of PET containers for the filling plants. Some years ago, the company had to come to terms with the fact that many of its PET lines were showing their age, which were between 18 and 20 years old.
The time was ripe for some major investment and innovation. Coinciding with this insight, the Australian government was offering support for investment projects in a predefined time window with tax incentives. It was the perfect opportunity for Project Zero.
“What we wanted was to find investments helping us to reduce our cost basis,” says Mr Mossati. “What we opted for was to make group-wide use of blow-moulder/filler monoblocs.”
“With this project, we’ve harnessed the relevant expertise and brought it inside our company”, explains Gigy Philip, national manufacturing & packaging services manager at the company.
“We want to get the exclusive benefits from the advantages this vertical integration gives us.”
The company’s supply chain director Bruce Herbert adds: “Project Zero has given our company a vision for the future, has enabled us to organically grow on a continuous basis, and was the key to the success we’ve achieved over recent years, acting as a catalyst for a surge in growth which has propelled us ahead of our competitors.”
“Thanks to this project, CCA has launched 43 new products on the market during the past three years alone, a trend that’s set to continue. Above all, the project enables us to design our PET bottles in-house,” says Mr Herbert.
That was what the company did—in abundance—especially in regard to lightweighting. While in 2000, the standard 600 ml water bottle for Mount Franklin, one of Australia’s leading water brands, weighed 29 g, it has been slimmed down to 21.5 g by 2004. In 2010, another reduction thrust was launched by the company, resulting in a weight of 16.6 g.
Ever since the first blow-moulder/filler monoblocs from Krones were commissioned in 2011, the so-called ‘Easy-Crush bottle’ is weighing a mere 12.8 g (without closure). This corresponds to total lightweighting of 56 percent since 2000. For this achievement, the Mount Franklin bottle won the Global Packaging Award ‘World Star’.
As Mr Herbert sees it, this is not the end of the story for the company, not by a long, long way: “We’re convinced there’s still scope left for further lightweighting. Everything is getting lighter, smaller, handier. Just look at smartphones.”
The company adopted a similar approach for the Coca-Cola bottle. Its weight was reduced by 33 percent from 2000 to 2012 to what is now 20 g. Australia has, together with Mexico, the world’s lightest 600 ml Coca-Cola bottle.
Quite generally speaking, key targets for sustainability can be achieved by monobloc-synchronising the blow-moulder and the filler, both in terms of reducing raw material input, water and energy consumption, and of utilising a higher percentage of recycled PET material.
“Another option remains open to us, that of building our own recycling plant, but there are no plans for this at present,” explains Mr Mossati. In addition to that, weight reductions can also be achieved for end-of-the-line packaging in cases or shrink film, as they can be for labels and closures.
A study commissioned by the company in 2011 on the utilisation of the new technology in the Northmead plant (where so far three Contiform Bloc systems are up and running) revealed that this alone had by the end of 2011 caused water consumption in the plant as a whole to fall by eight percent.
The water saved there was essentially what had previously been needed for rinsing the containers prior to filling them. The new technology provided its user with an average reduction in CO2 footprint for each individual container of 22 percent as compared to a converter solution. The most significant carbon dioxide savings achieved there stem from 15 to 23 percent less PET raw material being needed for container production, 33 percent less PET being used for the closures, 30 percent less energy required for blow-moulding the bottles from preforms, and the option for doing so without the prewarmer, since the blow-moulding/filling technology permits the bottles to be filled at ambient temperature.
In addition to that, around 65,000 km of truck transport can be dispensed with each year. All in all, the company estimates that it will be possible to save a total of more than 9,000 tonnes of PET raw material a year as soon as all production lines have been equipped with blow-moulding/filling technology.
The CO2 footprint was reduced further after the company commissioned its own preform and closure factory, worth AU$57 million, in 2012 because this obviates the need for transporting these components from the vendors to the company. The ‘Eastern Creek’ Preform Plant boasts of the latest plastic injection moulding machines and possesses an annual capacity of more than three billion units.
At present, the plant produces 1.4 billion preforms and 1.4 billion closures for Australia, New Zealand and the Fiji Islands. It is here, too, that the ‘Sylon’ closure is made, which was developed by the company’s Future Works Team in-house, and is the lowest-weight 1881-type Coca-Cola closure in the world.
Once all of the lines have been commissioned in 2013, the company will be working with a total of 18 blow-moulder/filler monoblocs from Krones in Australia, with 13 in Indonesia, three in New Zealand and one in Papua New Guinea.
“In our plants, the monoblocs really have to show what they can do”, adds Mr Mossati. “Each of them fills 50 to 70 stock-keeping units (SKUs).”
The company channelled AU$100 million into its production capacities, so as to cope with main-season peaks, to increase the number of different SKUs and to offer more consumer-specific packages. The kit installed by the company for these purposes includes three flexible canning lines, plus two hotfill lines for the Powerade sports drink, juices, vitamin-fortified water, and tea, in which two Sleevematic wrap-around labellers have also been integrated in 2013 for special dress.
The spectrum of variants offered for the can, Australia’s all-important container for drinks, has been upsized from two to eight formats, while the figure for delivery incapacity during the peak season fell from twelve in 2006 to two percent in 2011.
“Project Zero has enabled CCA to expand its product portfolio while also cutting its costs and improving its service support and delivery capabilities for its customers,” explains Mr Herbert. “In the period from 2001 to 2012, we increased the number of different SKUs from 194 to 1,100, we upped our proportion of delivered in full on time accurately invoiced (DIFOTAI) consignments from 83 percent to 97 percent, and our return on invested capital (ROIC) from seven to 24 percent. Our target is to use the measures initiated so as to save costs amounting to an annual AU$30-40 million over the upcoming three years, starting in 2013.”
Australian Premium Beer Market
Project Zero may be coming to an end, but the company will continue to channel capital expenditure into new markets. In future, the company will again be engaging more proactively in business involving alcoholic beverages.
For more than seven years now, there has been a distribution agreement in force with the American premium spirits producer Beam Global Spirits & Wines. In addition, the company also markets beer brands from the Grupo Modelo, Carlsberg and Molson Coors beer groups on the Pacific islands and in New Zealand.
In 2012, the company took over the Fiji Brewery & Distillery, with plants on Fiji and Samoa. On December 16, 2013, a contractual provision dating from the termination of a former joint venture with an international brewing conglomerate and stipulating that the company must not enter the Australian beer market, will expire.
Also in 2012, the company had lent the Australian Beer Company, as part of the Casella Group, AU$46 million for building a new brewery, a loan that after 16 December 2013 is to be channelled into a joint venture. The company will then re-enter the Australian premium market, through the Casella Brewery at Griffith in New South Wales, which possesses a Steinecker CombiCube B brewhouse rated at 160,000 hectolitres.
“Not only will CCA in the future be utilising further options for automation and goods logistics, it will also aim to deploy new technologies for filling and packaging,” explains Mr Herbert. “For us, innovative packaging is just as important as the product it contains.”