Britvic acquires Brazilian soft drinks company ebba as GB revenues start to rise
Britvix has announced the acquisition of Brazilian soft drinks company Empresa Brasileira de Bebidas e Alimentos SA, known as “ebba”, in a move to extend and introduce Britvic’s brands to new markets.
By taking over ebba, the top supplier of liquid concentrates in Brazil and the number two supplier of ready-to drink nectar drinks, Britvic will gain access to the Brazilian market, which is the sixth largest for soft drinks and the largest dilutes market globally.
The $580m (£120.8m) deal will see the company focus on developing the kids, family and adult categories and “deploy Britvic best practice in marketing, category and revenue management” in an effort to grow ebba’s revenue, which hit $437.2m in 2014.
It will also see it extend ebba’s key brands such as Maguary and Drafruta into new sub-categories, while it will look to re-invest “already identifiable cost savings of at least $10m to drive future growth”.
Speaking on the move, Britvic CEO Simon Litherland said: “ebba operates in categories where Britvic has a proven capability of building new markets, accelerating innovation and establishing brand leadership.
“Its brands are particularly strong, and have a relevance to Brazilian consumers similar to the ones which Robinsons, MiWadi and Teisseire enjoy in their home markets.
He added: “We have identified opportunities to invest behind these leading brands, introduce new brands, and harness our group capability. As a result, we are confident we have a fantastic opportunity to drive long-term growth in the kids, family and adult categories and deliver significant shareholder value over the coming years.”
ebba will operate as a standalone business unit, according to Britvic, while current CEO João Caetano de Mello Neto will sit on Britvic’s executive committee.
GB revenues on the rise
The move comes as Britvic’s reported financial results for its third quarter today (23 July). Although revenue was up by 1% year-on-year to £322.3m – due to a 2% volume increase – GB revenues fell 0.8%. This compares unfavourably to the same period last year when revenue increased by over 10%.
Britvic said the decline is due to “challenging trading conditions”. However GB revenue was up from the 4.2% decline Britvic saw in the first half of the year.
“I am pleased to see the business back into revenue growth this quarter following the investment we have made in our brands and innovation launches in each of our markets,” said Litherland. He cited the company’s marketing campaigns for Robinsons 80 year association with Wimbledon and Teisseire’s sponsorship of the Tour De France as highlights.
The company also launched new products J20 Spritz and Teisseire during the period and re-launched its Robinsons portfolio.
Litherland added: “Despite continued challenging market conditions, we remain confident of delivering further profitable growth in 2015, in line within our guidance range of £164m to £173m, and we continue to invest behind the long-term drivers of growth.”