Britvic is expanding distribution in the US

Britvic is expanding distribution in the US

Britvic's efforts to franchise its Fruit Shoot brand in the US could boost earnings by GBP43m (US$67.2m) and "fundamentally re-base the value of the company", an analyst has said.

The UK-based soft drinks firm is upping its US distribution through agreements with PepsiCo bottlers and has launched moves to produce Fruit Shoot concentrate locally, analysts Investec said in a report today (26 June). If successful, it would be “transformational for the group”, Investec said.

“Britvic stands to gain GBP43m of incremental EBIT in the medium-term,” it said.

In the past 12 months, Britvic has increased the distribution of Fruit Shoot from one to eight US states, and a recent agreement with PepsiCo bottler PepsiCo American Beverages gives Britvic the opportunity of pan-American coverage, Investec said.

Last month Britvic started producing concentrate at a franchisee in Carolina, a strategy Investec said would offer higher margin revenue if rolled-out nationally.

The analyst said Britvic's franchise model could be implemented globally if successful in the US.

The report also highlights the success of Britvic's double-concentrate products in the UK. It said that the double-concentrate market grew by 64% in 2011, on a year-on-year basis.

Investec raised the status of Britvic stock from “not rated” to “buy”.

To view Investec's report, click here.