Nichols said it expects sales next year to remain strong

Nichols said it expects sales next year to remain strong

UK soft drinks maker Nichols has said strong sales for its Vimto brand this year have blunted the effect of higher input costs.

Sales for Vimto in Nichols' core UK market jumped by 9% in the year to November, the company said in a trading update today, far ahead of UK market growth of 2.3%. A spokesperson for Nichols told just-drinks that the sales lift was driven by volumes increases and not price rises.

"We've done little to increase prices because of competition," the spokesperson said.

Rising costs have seen some FMCG companies in the UK increase prices since the country's decision to exit the EU sparked a fall in the value of the Pound. A report from UK consumer magazine Good Housekeeping last month said that feeding a family of eight for Christmas dinner this year will cost 16% more than 12 months ago.

Leading soft drinks makers have so far avoided any ill effects from Brexit. Last month, Britvic said sales for its UK carbonates, which account for two-fifths of its business, were up 4%.

Today, Nichols said it anticipated group sales for the year ending 31 December to continue the strong trend reported at the half year, when revenues were up 12%. The company also said it expected strong sales to continue next year despite the upcoming sugar tax due to be implemented in April. According to Nichols, all of its Vimto and Feel Good brands are under the sugar tax levy's threshold. The company will launch a new marketing campaign for Vimto in the Spring.

Overseas sales were also strong, however, Nichols warned that conflict in Yemen had blocked its supply route in the country. As a result, the company said it now expects adjusted group profit before tax for the year to be in line with the year-prior.

Nichols' preliminary results will be announced on 1 March. 

The soft drinks category in 2017 - just-drinks' Review of the Year, Part II - FREE TO ACCESS

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