Virgin Cola growing into new sectors

The article “Bitter truth Virgin is loath to swallow” published last week contains incorrect and misleading information. This despite having been called by Philip Buxton and pointing out the inaccuracy of some of his facts and comments.

Over the past five years, Virgin Cola has grown significantly in the UK and internationally. Aside from our core products competing head-on in the cola category, we have demonstrated that we can compete aggressively in other drinks segments too.

We have changed our name to Virgin Drinks to reflect this growth – not, as your article suggests, because we are refocusing our strategy. We have a host of new initiatives planned for cola activity by developing a range of alternative refreshment opportunities, Virgin dt:nt being the latest example.

The AC Nielsen figures quoted by Marketing Week are on a one-month basis, and in no way reflect the year-on-year sales figures. These figures also fluctuate wildly subject to temporary promotional activity. Surely tucking away the annual sales at the end of the article is not objective journalism? Indeed, if we were to take, for example, our sales on a monthly basis in multiples and co-ops for September 1999, we were ahead of Pepsi, with 10.8 per cent versus Pepsi regular and diet brands’ total of 8.3 per cent.

The quote from the “industry insider” incorrectly states that Virgin Cola does not take sales from Coke and Pepsi. During the year to 28 November 1999 as reflected by Nielsen, Virgin Cola’s volume in the UK market grew by 26.3 per cent, as opposed to Coke’s 5.5 per cent volume growth, and Pepsi’s sales drop of 2.1 per cent.

We have grown consistently as a company and are continuing to gain distribution. We are stocked in a host of major players including Tesco, Asda, Somerfield, Safeway, Woolworth’s and Iceland. We are also stocked in several thousand on-trade outlets.

Another “insider” was quoted as saying that Virgin Cola is an “insignificant cola brand”. Surely annual sales of between &£250m and &£350m for such a young company cannot be classed as insignificant!

Cott did not “opt out of the venture”, as you have reported. We agreed with Cott to buy out its interests to enable us to pursue more radical and innovative marketing techniques synonymous with the Virgin brand.

We have subsequently opened a brand new concentrate manufacturing plant in Ireland with the capacity to produce concentrate for 1 billion litres of cola a year. This is surely not the kind of investment made by an “insignificant” soft drinks company.

Last year, our TV advertising campaign generated an awareness of 36 per cent among teens, which was higher than Pepsi’s awareness over the same period and equal to Coke’s. This proves that it is not about spending vast amounts of cash on celebrities to front the campaign; rather, creativity and understanding the consumer drives awareness.

We celebrated our fifth birthday in November last year. For such a young company competing against more established cola brands (Pepsi being 60 years old in the UK market), I don’t think we are doing too badly! I was therefore disappointed and at a loss to understand some of the comments made in the article.

Paul Steele

Worldwide chief executive

The Virgin Cola Company

London SW1X

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