Britvic enjoyed a strong full-year performance

Britvic enjoyed a strong full-year performance

As The Coca-Cola Co struggles against profit falls and investor insurrection, there has been talk that the company is in need of a “reset”. CEO Muhtar Kent hinted at this last month, when he acknowledged the “new normal” in his firm's trading environment. There were also signs of a new direction for Coca-Cola when it unveiled a new dairy launch in the US, Fairlife milk.

If Kent is looking for tips on how best to hit the restart button, he could do a lot worse than talk to Simon Litherland, his peer at Britvic.

Litherland took over the UK soft drinks maker's CEO role at a dark time - the company was still reeling from the debacle of a Fruit Shoot recall that cost the company an estimated GBP25m (US$39m). A merger with AG Barr had also just fallen through and, in its most recent full-year results, profits were down by 19% and sales by 3%.

But, despite analysts advising that the future for Britvic did not look bright, especially without Barr by its side, Litherland has overseen a turnaround in the Robinsons owner's performance. In Wednesday's full-year results, profits leapt by 45% and sales edged up 2% despite facing a tough comparison against last year's gloriously hot summer in Europe.

This has been achieved partly through a cost-cutting programme implemented in May last year (Coca-Cola is also driving through cost savings that will include job cuts) and through continuing to expand Britvic's international ambitions, particularly through its Fruit Shoot franchise in the US. Whereas, in 2012, Fruit Shoot was an albatross around Britvic's neck, now that it has been rolled out nation-wide in the States with plans for similar franchise operations in India and Spain, analysts are describing the brand as the future of the company.

According to Nomura today, if Fruit Shoot becomes as big per capita in the currently-announced franchises as it is in the UK, it could be worth a huge 260p per share.

But, Britvic hasn't stopped there. On Wednesday, Litherland said that 2015 will be the company's biggest ever in terms of innovation, and he outlined plans for, among other things, a carbonated J20 called J20 Spritz and syrup mixers for alcohol under the Teisseire brand. 

“We have identified an opportunity to broaden dilutes beyond mixed-with-water, as it is typically consumed in the UK,” Litherland said.

It's not all good news, however. The new J20 launch is designed to shore up falling sales for the premium-priced brand as consumers seek value. In the same vein, new flavours for Robinsons concentrate were unveiled as the brand faces challenges in the retail market.

Meanwhile, in the tough Irish market, volumes were down by 1% and sales dropped by 6.3%

The company is aware of these headwinds and Litherland warned that the next fiscal year looks to be “increasingly challenged”. But, with its innovation and international expansion, Britvic appears confident of the road ahead.

Coca-Cola should take note.