While demand for cold drinks continues to be strong worldwide, the industry is facing pressures from rising energy and materials costs. Frigoglass is a manufacturer of commercial beverage coolers. In April 2023, special situations firm Tetrad Capital Partners carried out a recapitalisation and restructuring of the business, ultimately selling Frigoglass’s Nigerian-based glass bottling business to private equity firm Helios.
In Africa, the reusability of glass bottles and a desire to reduce environmental impact helped the firm weather a devaluation of the Naira, while a need for energy efficiency in Europe and marketing wars in Asia supported the growth of its cooler business. At the same time, the business was forced to unwind a profitable Russia-based operation that had been impacted by sanctions. We sat down with Gagik Apkarian, founder and managing director of Tetrad, to unpack the transformation of Frigoglass.
He discusses the firm’s intial thesis for Frigoglass (0:50); the operational changes made to the glassware business, and why the reusability of glass meant cost pressures could be passed on to the consumer (4:18); the importance of generating hard currency from the export market (7:35); and how the perception of glass as a premium product ensured demand was resilient (9:02). On the cooler business, we cover the firm’s strategy for exiting Frigoglass’s Russia business (10:49); the drivers of demand for fridges (13:13); and the exit options that are available (16:38).
