After a strong first half performance, Britvic has identified marketing and innovation as “clear priorities” to “maintain momentum” in the second half of the business’s financial year.
According to CEO Simon Litherland, this will involve the activation of “highly relevant” marketing programmes, expanding Britvic’s core brands through extension and innovation, and developing its presence in “new growth spaces”.
Despite the challenges of inflation, Litherland told investors during a call today (17 May) that he believed in the “resilience” of the company’s brands, which include Tango, Robinsons, Fruit Shoot and London Essence.
“I’m confident we will continue to drive sustainable growth at Britvic even through the most challenging of times,” he said.
The drinks giant’s promotional strategy and pricing activity has so far helped it to mitigate the impact of inflation, according to its latest results. Overall, Britvic’s revenue for the first half of the year increased 18.5% to £719.3m, while adjusted EBIT profit increased 20.7% to £73.5m. Profit after tax rose 48.7% to £45.8m.
The company reported “strong momentum” across its core brands, following continued investment in “relevant and effective” marketing activation and innovation to support its “longer-term growth ambitions”.Britvic preps CX centre of excellence amid marketing spend boost
This follows the successful implementation of Britvic’s “commercial transformation” programme, which went live in the second quarter. First announced in November last year, the programme includes a centre of excellence for consumer experience, focused on enhancing Britvic’s digital marketing capability and integrating the end-to-end consumer experience of its brands.
The programme is also optimising the “efficiency and effectiveness” of Britvic’s promotions and customer investment, while enhancing collaboration between teams, Litherland said. Meanwhile, the business’s new in-house digital studio is improving the “quality and speed” with which its brands interact with consumers by creating a range of content, including videos and animations.
Litherland said Britvic would continue to “activate” its brands through marketing. He said the company would deploy a mixture of “proven winners and exciting new ideas” in its campaigns over the second half of the year, which will include the launch of a new summer campaign for Robinsons’ ‘Big Fruit Hunt’, and the Pepsi Max taste test challenge and Live Nation music festival campaign.
The company noted that it had felt, and continues to feel the pressures of inflation in its supply-chain. Consumers are also seeing their discretionary spending squeezed, but Litherland said Britvic’s at-home market has remained “relatively robust”.
Britvic launches digital studio to boost marketing effectiveness
“We’ve done very well building our relationship with our customers,” he said. “That is where consumers tend to turn to in times of difficulty, as it was during Covid.”
He called Britvic’s brands “resilient”, highlighting the company’s low-sugar and health portfolio. This portfolio had the “number one and number two most trusted brands in our respective segments”, he claimed.
Building on core brands
Litherland told investors Britvic’s combination of core brands and innovative products would help the company move towards its ambitions for growth.
“We continue to build on the shoulders of our core brands through a combination of line extensions and innovation,” he said.
The business accessed “new growth spaces” in the first half, relaunching non-dairy milk brand Plenish after acquiring it last year. Meanwhile, the Aqua Libra Company has developed a unique tap proposition that offers flavoured water alongside still, sparking and hot, and has been building a “pipeline of opportunities” both in the workplace and retail channels.
Litherland noted that water consumption is growing, and that the opportunity for Britvic to improve that experience remains “relatively untapped”. He said there is “significant opportunity” there for the business’ squash and syrup portfolio, which it would support with marketing campaigns.
I’m confident we will continue to drive sustainable growth at Britvic even through the most challenging of times.
Simon Litherland, Britvic
He also said the company was investing in its premium portfolio.
“We are also building a portfolio of premium, higher margin brands such as London Essence and Mathieu Teissere, which will also help broaden our channel presence,” he said.
Last year Britvic also relaunched the Rockstar energy drink brand, which it partners on with PepsiCo, to shake off its “immature” image.
However, Litherland admitted it had so far been “challenging” to build out the brand in the UK, for two reasons.
The first is supply chain issues, which he claimed are now “done and dusted”. The other challenge is that there are “two very strong competitors in the category”. Red Bull and Monster Energy are two of the leading brands in the UK.
However, both Britvic and PepsiCo are now focused on “building the brand”, he said. “I’m confident that we will take share over time, but it’s not going to be a quick burn.”