The merger, which both companies confirm is in “early stage discussions”, would give Britvic a much needed boost in terms of new product development and brand innovation, experts say.
Andrew Marsden, former Britvic marketing director and currently an international brand consultant, says the merger is “littered with opportunities” – particularly for the Rubicon brand, which has the potential to expand from the world food and drinks aisles to become a mainstream beverage.
Wayne Brown, analyst at Cannacord Genuity says Rubicon will benefit “infinitely” from the scale of distribution and marketing investment Britvic could provide the brand.
Brown says the combination of the companies would provide Britvic with the “strategic nouse” it needs in terms of brand building from AG Barr, a company that is famed for its new product development.
Marsden agrees, saying the merger would give Britvic the opportunity to grow through innovation rather than its current strategy of acquiring other brands and expanding existing products overseas. It may also help Britvic to overcome recent issues such as a series of bad summers and this year’s Fruit Shoot recall by adding an extra “dynamic marketing edge” to the business, he says.
“There will not be an issue of rationalisation of brands, it will be more about innovation. If I was a shareholder I would be very excited about [the merger],” he adds.
Irn Bru could also grow its presence south of the Scottish border as a result of the merger.
Phil Carroll of Shore Capital told The Daily Telegraph: “Irn-Bru is massively popular and Britvic’s distribution can only benefit it really. Likewise while Britvic is very strong in all of the mainstream places, Barr has a strong presence in the impulse market, in small independent shops.”
It is not yet known how the merger would affect the respective company’s marketing departments and senior marketers. Simon Stewart is currently the group marketing director for Britvic, while Adrian Troy – who worked at Britvic for more than a decade – is the head of marketing and R&D at AG Barr.
Roger White, AG Barr’s chief executive, is set to hold the same role at the newly established business, according to a statement from both companies. It is unclear how Paul Moody, Britvic’s current CEO, will fit into this setup.