UK: US franchise moves could transform Britvic - analyst
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.
The third in our five-part review of 2012 sees Ben Cooper consider how the last 12 months have treated the bottled water category....
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read analyses on just-drinks in 2012....
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read news stories on just-drinks in 2012....
- Craft spirits shake-out will be just the beginning
- How Treasury is rewriting the rule book - Comment
- The decline of the flagship beer brand - Comment
- Job cuts not the whole story at AB InBev - Comment
- Coca-Cola India suspends bottling operations
- Diageo brands need "fixing and nurturing" - TWE
- Diageo revamps Gordon's gin bottle in UK
- Craft Brew Alliance poised for AB InBev takeover?
- SAB shareholders granted AB InBev vote split
- Pernod deal rescues Corby's FY
- The Next Seven Big Beverage Markets
- Global rum insights - market forecasts, product innovation and consumer trends
- Carlsberg AS (CARL B) - Financial and Strategic SWOT Analysis Review
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages