Events, food and drinks of Bucharest’s five-star hotels come to account for 40% of their revenue, namely several million euros per hotel. Bucharest’s five-star hotels are a major stake both for soft drinks and for alcoholic drinks producers as these have plenty of foreign clients, as well as an aggressive event policy.
While in off-trade (supermarkets, hypermarkets, kiosks, etc.) the two international giants are present side by side and are vying for a better shelf positioning, in the on-trade channel (hotels, restaurants) they can leave peers behind through exclusivity contracts.
Coca-Cola HBC Romania, with EUR435 million in revenue in 2012, and PepsiCo, present in Romania through bottler Quadrant Amroq Beverages with EUR142 million in revenue, lead the domestic soft drinks market. The main rivals of the two multinationals on the Romanian soft drinks market, which amounts to 1.8-2.3 billion euros annually, are local entrepreneurs Octavian Cretu and Nicolae Palfi, who own Romaqua Group, and Ioan and Viorel Micula, the founders of European Drinks.
“Pepsi products are present exclusively, on the basis of an international contract sealed between Marriott International and PepsiCo,” Meda Vasiliu, director of sales and marketing at JW Marriott hotel of Bucharest, told ZF. The hotel generated around EUR24 million in revenue in 2012.
While Marriott sealed an international contract with PepsiCo, the menu of 5-star Radisson Blu hotel of Bucharest, with revenue of almost EUR26 million in 2013, includes only the soft drinks of the main competitor, Coca-Cola HBC. It is only Red Bull and mineral waters Vittel, San Pellegrino or Perrier that are also included in Radisson Blu’s menu of the brands that belong to other companies.
While neither Coca-Cola’s, nor PepsiCo’s representatives speak about the exclusivity contracts they have with hotels, this is a common practice not only in the soft drinks market, but also for the beer or spirits market, even though on a smaller scale.
“We have contracts with many hotels of Bucharest and Romania, with which we have forged strong partnerships. For us, all the partners we work with on the on-premise channel are very important,” was PepsiCo’s answer to ZF’s questions about the Bucharest hotels where PepsiCo’s beverages are present exclusively.
PepsiCo’s officials did not specify whether the company holds exclusivity contracts with accommodation units. The same questions went unanswered by Coca-Cola HBC Romania’s representatives.
However, in Bucharest there are other hotels that do not hold such exclusivity contracts with soft drinks producers.
(English version by Catalina Apostoiu)