A strong improvement in sales of its core carbonated drink brands Tizer and Irn-Bru, as well as gains from the newer non-carbonated business such as fruit juice and bottled water, has helped Scottish company AG Barr to a 3 per cent rise in turnover for 2002.
Sales reached £120 million (€177m) in 2002, pushing up pre-tax profits by 14 per cent to £12.2 million, helped by a 16 per cent increase in volume sales for Irn-Bru alone. But there was also a 30 per cent increase for the Findlays Natural Mineral Water and Simply Citrus brands, reflecting the increasing diversification of the group.
Robin Barr, executive chairman, said: "Although at the time this statement is written, we face, in addition to the ongoing commercial challenges, quite abnormal financial and political threats on a worldwide scale, it is some comfort to reflect that our business is part of a relatively stable food and drinks sector and we believe that our brands, handled in an appropriate manner, will enable us to develop and prosper even in uncertain times."
Barr said that sales growth in the second half in particular had been lower than expected, not least because of poor summer weather in the UK.
As for the start of the current year, turnover for the first eight weeks was up 4.5 per cent on the same period in 2002, Barr said, a "positive start during what is of course a time of seasonally low demand". He added that the increase in world sugar costs had pushed up prices, but that the fall in the value of sterling, would lead to a reduction in the recent levels of soft drinks imported into the UK, making the market place more stable.
The total UK soft drinks market grew in volume by 3 per cent in the year to January, the company said, despite just 0.4 per cent growth in the carbonates sector during the year. Barr's growth - in particular in the carbonate sector - was all the more impressive in such conditions.
Excellent growth in the UK was mirrored by the first successful year in Russia, where Barr operates in association with the Pepsi Bottling Group. "Irn-Bru has now captured almost of 1 per cent of the huge Russian market, an exceptional performance and a strong basis for future growth in this and other export markets," said Roger White, managing director.
.As far as licensed brands are concerned, there were solid performances from both Lipton Ice Tea (owned by Unilever) and Orangina (licensed from Pernod Ricard), with the latter brand growing 7 per cent during the year.
"The soft drinks market has been awash with product extensions and new product ideas in the past 12 months," White continued. "Whilst some have proved extremely successful, many have fallen by the wayside. Much of our success has been through innovation, not only in products, but also in innovative communication and in-store execution. The growth of Findlays Natural Mineral Water, Simply Citrus and Simply Clear along with many successes in new packaging formats with our established brands have driven incremental new sales across all trade channels."
He continued: "We will continue to deliver growth by developing brands that consumers love, products and services that customers need and will thereby deliver sustainable financial returns to all our shareholders and stakeholders. The coming year will see our longer-term strategic goals develop further, based on our improved consumer insights and sound business plans."