just On Call: Britvic pins high hopes on US venture
Britvic has said its current focus is on Fruit Shoot in the US
Britvic has said that it hopes to one day launch its Fruit Shoot brand nationwide in the US, as part of a strategy to expand beyond the UK soft drinks market.
The UK soft drinks firm announced the signing of three agreements this morning (30 November), including one with Pepsi Bottling Ventures (PBV) - the largest independent Pepsi bottler in the US - for the distribution of its Fruit Shoot brand in six US states. Britvic said the deals are part of the group's strategy to leverage its own brands outside of the UK.
This morning, Britvic recorded an increase in full-year profits. For the year to 2 October, net profits grew by 1.4% to GBP77.9m (US$121.3m). EBITDA in the period increased by 4.8% to GBP138.1m, while net sales increased by 15.1% to GBP1.29bn.
The firm, which is the bottler for PepsiCo drinks in the UK and Ireland, backed up the results by saying that it is confident about current trading. However, taking its brands overseas might help to insulate against tough economic conditions, particularly following a downgrade in the UK's economic outlook.
"Within the portfolio we have identified a number of key brands that we believe have the potential to be launched outside of their home market," Britvic's chief executive, Paul Moody, told analysts on the firm's full-year earnings call. "These fall into three categories - dilutables, kids and adults."
Moody said the firm's current focus is on Fruit Shoot, which Britvic had been testing in the US state of Alabama, through a partnership with local bottler Buffalo Rock.
"Fruit Shoot provides a strong and transferable brand equity that will be relevant to kids in all markets," Moody said, adding that the company hopes to build on the three agreements and expand the brand beyond the six US states at a later date.
"From our perspective, if we can demonstrate that the brand can build traction and add value to their [PBV] brand portfolio, then I would be strongly be arguing that it is a great platform for them expanding into the rest of the country," Moody said. "But at this stage, our focus is on perfect execution in Florida and Georgia, and from that one would hope we would have a bigger opportunity, and our ambition clearly is to stretch beyond.
"We believe our experience, our insight and our brands create significant growth opportunities for Britvic, and we are have continuing discussions that will help us exploit this opportunity around the globe," he added.
Britvic shares were up by 0.62% to 338.50 pence at 1243 GMT today.
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