For one of the most prolific drinks brands in Australia, growth is predicated on its employees coming together under the same roof.

That’s what spurred Asahi Beverages, the name behind Cool Ridge, Peroni, Hard Rated, Solo, Allpress, Cottee’s and Carlton just to name a few, to break its office lease and move into a new regional headquarters – a five-storey 4,500 sqm office space at 2 Southbank Boulevard, within the Freshwater Place complex, in Melbourne.

John Tortora, chief procurement and sustainability officer at Asahi Beverages joins Will Connolly, senior vice president in JLL’s hotels and hospitality group, pubs and motels, and Kate Pilgrim, co-head of tenant representation, JLL.

Kate Pilgrim

Welcome to JLL Perspectives. I'm your host, Kate Pilgrim, managing director and co-head of tenant representation for JLL Victoria. Today we're exploring how one of Australia's most recognisable beverage brands, Asahi Beverages is shaping the future of work through the workplace move, as well as discussing key trends across the hospitality sector. Joining me is John Tortora from Asahi Beverages and Will Connolly, Senior Vice President of Hotels and Hospitality at JLL. Together we're going to unpack the importance of culture, connection and partnership in building environments that support people and performance. Will, do you want to tell us a little bit about your role at JLL?

Will Connolly

Kate Pilgrim

Thanks JT. Let's start, if we could talk about the Australia Asahi business, the interplay with Japan, your HQ, and also a little bit about your role and what you do at Asahi.

John Tortora

Sure. So Asahi Beverages Group is a combination of amazing brands and portfolio. So probably best way to explain is as you wake up and when you go to bed, every time you put a liquid on your lips, it could be one of our brands. So from Allpress coffee to water, hydration of Frantelle and Cool Ridge to energy drinks of Gatorade and now Solo Energy through to our craft beers, which is Balter, Four Pines, Pirate Life, etc. We've also got mainstream beers of Asahi, Peroni, Carlton Draught, Pure Blonde, moving on to Vodka Cruisers and Hard Rated, which is an amazing brand we've launched, through to whiskeys and gins and vodkas. In terms of our people, we're about 4,000 in Australia and New Zealand, headquartered in South Bank Victoria, and 31,000 globally, which is headquartered in Japan - Tokyo. My remit is the Chief Procurement Officer for the Australia and New Zealand business, which basically means all our spend comes through myself and my team.

John Tortora

We look after about two and a half billion dollars of spend for the group, which then involves, you know, marketing, industrials, leases, products, ingredients, cardboard, cans, glass, whatever needs to be purchased to run the business comes through my function and our role is to obviously ensure we get good security supply, great pricing, great strategies for now and into the future.

Kate Pilgrim

And property sits under your remit, JT, and we had the benefit of getting to know you through your Melbourne office requirement where we represented you. The move for Asahi in Melbourne, we were looking ahead of lease expiry. Do you want to maybe talk to some of those drivers around why the need to move earlier and some of that sort of cultural alignment?

John Tortora

Yeah, so if you look at the history of the group, it's an amalgamation of multiple mergers, acquisitions, etc and the most recent one was the Asahi acquisition of Carlton United breweries. That meant two businesses coming together and moving to one headquarters. And we soon realised that the headquarters that we were in didn't really invoke great collaboration. We didn't have enough space, the lighting was pretty poor. And as we're trying to get people to encourage to come to work for collaboration because we are a beverage business and it's about working together and face-to-face, the workplace didn't give us that sort of environment that we're looking for.

John Tortora

So hence I was to engage with you, Kate and your great team to look at ahead of the game and ahead of the market, where we could go and where we could relocate to. The driver was really around collaboration and getting people back into the office. And so our, one of our limitations where we are today is we just can't fit. So it's a bit hard to encourage people to come in when they're frustrated they can't get a meeting room or the space isn't ideal. So really our aim was to find a location that we could get everyone to fit in - world class facilities, great space, great lighting, but also what we talked about is life admin and around a location that people want to come to work, that they can do their duties in and out of work and feel like it's home.

Kate Pilgrim

And I feel like that experience piece was really important for the business, but on that return to office and there's a lot of conversations that are ongoing across Australia, but also across the globe around return to office and getting your employees back in. Maybe do you want to touch on that?

John Tortora

Yeah, there's no playbook on this one, is there? We're all writing our own playbooks and working out what's right, what's wrong, but I mean, and each business got its own needs and wants, but for us, we want people to work together collaboratively and in the office. So we're mandating a three plus days from the new office build, we're also mandating the Monday, so we want everyone in the office on a Monday. So we are definitely forcing some great collaboration and then three plus from there.

Kate Pilgrim

And part of the business case around the early move was to take advantage of the market conditions but also I guess those commercial terms more broadly and a reset for the business as you said.

John Tortora

Yeah, because I mean, it takes a while to find the right place and you need to make the right choice. So I think the earlier you start the better, but what it did for us, so we are moving out way ahead of our expiry of the lease, but what it's done for us is created excitement and rather than waiting for an expiry, you're getting that momentum early and you're finding the right spot, then you can promote that and get people ready to move and get excited. We've got great activations in our existing building showing people what it's going to look like and the new workspaces and it's a real buzz of activity now.

John Tortora

Oh, I think day one for us will be, if I close my eyes and think about what the office would look like, we're going to have a state-of-the-art bar and a state-of-the-art Allpress cafe sitting on our level 20 overlooking the northern part of the city. And so why wouldn't you want to come to work when you've got some great facilities and people are going to just be excited to be able to come in and have a great coffee, collaborate, chat, talk amazing views, and I think it's going to be a really nice reset for us.

Kate Pilgrim

So maybe we'll just touch on the new office you spoke about the new bar and the Allpress cafe, the importance of that for your people, but also that brand recognition and to be able to bring some of your partners and suppliers in.

John Tortora

Yeah, I think it's important you know, your identity and who you are and so we're a beverage business and we're about, you know, bringing people together and connections and moments, so having a facility that can do that. And so we've designed the workplace where we have an entry level where we've got guests, customers, suppliers can come and visit us and showcase our brands and we're really proud of our brands and when you can walk through a state-of-the-art facility and see what's available and even then sit down and enjoy a beverage with us, that's really important.

Kate Pilgrim

And then so over the floors, we've then divided up into neighbourhoods and so people can work collaboratively together and then move easily through floors and co-collaborate as well.

John Tortora

So that's really important for us in terms of a design and also our brand. If you walk into our workplace today, you'll see meeting rooms that are branded of a particular brand. The change for us is going to be as you walk into the new place, you'll have a combination of brands. You walk into a meeting room and you'll see multiple brands in the one room being presented. So we are really creating a one Asahi rather than a brand specific focus. And then we can also bring in diversity inclusion. Ultimately we want to walk in there and make it feel like it's an Australian business, Australian office, but with some Japanese heritage.

Kate Pilgrim

You do have a very long Australian history and then obviously with the acquisition of Carlton United Breweries, the design is really reflective of both that Australian history but also that Japanese nod to the global brand.

John Tortora

Yeah and if you look, if you unpack who we are, you know, it's not only just the Carlton United Breweries heritage along with the Asahi heritage. We've got a Schweppes heritage, we've got other acquisitions of business like Never Never gin and craft beer brands that also form part of our culture and history. And so it's a great way to be able to amalgamate that into an office space. And the idea is, as an employee, as you walk through, you feel proud of who you work for, you're reminded of who you work for and it's fresh and new and it's state of the art and that's what's really exciting about the move.

Kate Pilgrim

Yeah. So Will maybe we'll flip to the hospitality scene and the importance of experience and some of those key themes that you're seeing across the pub networks across Australia.

Will Connolly

Yeah, I mean John, I've taken a lot from what you've said today in terms of what I'm seeing out there at the moment. I mean, I think the epitome of good hospitality is connection. If we were over at each other's house for dinner, you know, you want to feel hospitable, you want to have a connection there on the night itself. But I think in terms of we went through a period with pub operators where, you know, if they were spending capital on their venues, if they were doing renovations, they may have skewed away from, I guess a connection to the pub's history to past.

Will Connolly

But what we're seeing now and which I think we should all be proud of as patrons and as Australians as well in terms of operators. Now harking back to the history of the pub itself, having a connection to the culture and in terms of where they came from, how the pub came to be. And I think operators now are embracing that. And that probably goes back to, in terms of a piece to connection as well, if I may have family history there 20 or 30 years ago at the pub, but somehow it's changed over that time to be rebranded, well that's not happening anymore. Operators now see that as value in terms of having that connection to a venue.

Kate Pilgrim

And the patrons want to have that sense of community through those venues as well through that activation.

Will Connolly

They certainly do. I mean, whether or not we're in a pub in South Yarra or if we're in a pub in Kalgoorlie, that is the centrepiece of a community and that obviously then breeds connection.

Will Connolly

Yeah and from a client side as well, you do have that ability then for connection as soon as they walk in the door, offering them hospitality within our office is a great offering to have.

Kate Pilgrim

Will Connolly

Look, I think broadly speaking what we're saying with more of your larger national based operators is probably consolidation into their existing portfolio in terms of CapEx on existing venues, recognising that they need to continue to evolve in terms of the offering that they currently have. What we're seeing in terms of a spend perspective, we're actually seeing more of an increase in on-premise spend as opposed to to retail, which is somewhat surprising. We've obviously come from extended lockdowns, and we're moving on from that, but where we now have a huge demand to be out, hence there's a definite increase on premise spend.

John Tortora

Yeah and to support that Will, we're seeing our brands are really strong where we see experiences like festivals and concerts and outdoor activities in sports. We're seeing that the uptake there is really, really strong. And so yeah, people are definitely deciding to get out of home and get more of an experience and enjoy themselves in that environment. So we're definitely seeing an uplift there as well. And pubs are being really smart in how they're recreating their offerings. Their food service has really improved and the environment's improved a lot also in terms of what they offer. So it's quite interesting to see that dynamic shift.

Kate Pilgrim

What are some of those operators doing in that space for that experience, but also design and amenity for the customers?

Will Connolly

Yeah, I think what operators have realised is that they certainly just can't open up the double doors and turn on the taps and expect people to stay. They need to give them an extra reason to stay now. And whether that be through on premises experience in terms of electronic darts, you need to have other reasons to have patrons stay beyond their pot and the parma.

Kate Pilgrim

Some really interesting themes that have come through there, which has a flow over effect onto your distribution and warehousing supply chain. Do you want to touch on that JT?

John Tortora

Yeah. Similar to the hospitality industry having to re-invent themselves and be relevant as well. It's no different for a supply footprint or a manufacturing footprint. So as we proliferate our brands and we've got more SKUs and consumers want variety. You walk into a supermarket, you want to be able to buy different pack sizes for different occasions. And so that then means more SKUs, more space required, more asset footprint. So we've had to keep being relevant for ourselves and what was maybe designed 20 years ago is no longer relevant.

John Tortora

So from an industrial perspective, we've got multiple assets of manufacturing and distribution and we're looking now to also automate where we can. In our eastern seaboard, which is a key market for us, we are looking at automating our distribution centres. Looking at our centre of gravity of where the work needs to be and how it gets fed out into the markets. That's become really critical for us. It's about staying relevant and also future proofing your design and manufacture because what we design today is great for the next 10 years, but it may not be good for the following 10. So we need to make sure we give ourselves space and ability to keep growing.

Kate Pilgrim

And property strategy, JT, you've got a mix of owned and leased assets. That's very strategic in your approach.

John Tortora

Yeah, it is and we're always up for looking for opportunity and what works best for us. We're not in the property game as such, we're in the beverage game. That's what's really important for us is to ensure we can protect our supply and manufacturing, our distribution. And so that's our heart of what we're trying to protect.

John Tortora

Yeah, so in terms of design, it's important. We design for flex. So in order for growth and flexibility as things change, assets underneath the roof keep changing in terms of requirements. And then location—especially around distribution—we do a lot of analysis around what is our centre of gravity and where we need stock to be sitting to get the optimum distribution. Metro areas have challenges like congestion and traffic flow issues. So for us it's really about having a strong strategy and good flexibility in that.

John Tortora

Definitely. We can't ignore AI, but also robotics and automation. We also want to create a safer environment for employees.

Kate Pilgrim

So Will, it'd be great to touch on some of the themes that we're seeing across the investment space and capital, where the capital is coming from, what are the trends we're seeing currently across investments and capital across Australia?

Will Connolly

Will Connolly

I mean we still have our more boutique style of operators where they have your three or four venues, they still have appetite as well. An example of that—the Spotswood Hotel that we sold just last week. We're still seeing appetite in the market for the smaller to want to grow larger and the larger to continue to evolve. So it's a good time to be in the pub market.

Kate Pilgrim

John Tortora

Oh yeah, probably more from an experience perspective. It's generated so much excitement and so we're really keen just to get there. It's a bit like when you book a holiday in advance, you've got something to look forward to. Because we've gone early and we've been able to communicate early and create that excitement of where we are going, what the place will look like, and we're getting the teams involved in how it's going to be formulated. Everyone's super excited to actually want to get there in March. So that alone's got a lot of worth in it.

John Tortora

Creating that environment for everyone to be able to come to work—obviously you spend a lot of time at work and it's important you feel comfortable and you can be productive in your work environment. It's a great opportunity to reset because sometimes you might find yourself in a workplace for 7 years and it's become a little bit stale. To be able to do that reset is going to be a catalyst I hope for our engagement, for our culture, and make people proud to where they work. We want to come to work and be proud and be happy and go home and talk about the environment.

Kate Pilgrim

John Tortora

Around the property, it's always an evolving market for us. We're always continuously looking at what opportunities we need to identify in order to maximise where we are. From sales offices to distribution to manufacturing. The big next frontier for us is our distribution centres. So we've kicked off some major investment along the eastern seaboard across Victoria, Brisbane, and New South Wales. That's a 5-10 year plan that we'll look at continuing to invest in that area. So that's a big play for us.

Kate Pilgrim

Well thank you JT and Will for joining the session today. I think our listeners are going to get a lot out of what we've discussed and I think it's very clear that culture, connection and collaboration are at the heart of both Asahi success, but also a lot of what our clients in the hotel space, patrons in the hotel space and our occupier office clients are seeing. Property when done right can be a powerful enabler of both people and performance.