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Foster's Group Performance

Since BeringerÆs was acquired by the FosterÆs group in 2000, it has done remarkably well. In fiscal year 2001, its sales for the combined wine division more than doubled to $1,359.7 million. Case shipments of wine went up by more than 20% in the U.S., Canada, and the United Kingdom. The return on capital employed (ROCE) was 13%-15%. In fiscal year 2002, Beringer BlassÆs earnings before interest, tax, and amortization (EBITA) contribution was $486.6 million, up 20.1% over FY 2001. Global volumes increased 25.8% to nearly 17 million 9-liter cases shipped. Wine trade EBITA rose by 36% over FY 2001 from $294.8 million to $401.0 million.

FosterÆs financial performance since the Beringer acquisition reflects FosterÆs increased presence as a global concern in the beer and wine industry. Successfully incorporating BeringerÆs wine business into its existing beer business gave Foster a bigger share of the spirits industry pie while diversifying its offerings to appeal to more sectors of the market. By adding wine to its beer offerings, Foster is not only improving its bottom line but increasing the range of its appeal from one social milieu to another; beer drinkers and wine drinkers tend to operate in distinct social circles. Since beer and wine must be handled differently in transit, Foster was taking a risk by taking on wine, but the risk paid off and appears to be a hand up to a higher level of global appeal.

Klenz defines his challenge in developing Beringer into a global business as a balancing act between building a brand that is common to all markets and adapting to what every local market needs. He is seeking to develop a series of core global brands at different price points, transform BeringerÆs organizational culture into a global-oriented one, revamp the product line to make it more accessible to the newest generation of wine consumers, and build new internal communications systems to support an increasingly c...

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Foster's Group Performance. (1969, December 31). In LotsofEssays.com. Retrieved 05:57, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1712389.html