AG Barr aims to power up its iconic Irn-Bru brand with a bigger range of energy drinks.
The firm’s boss, Roger White, told The Press and Journal (P&J) new product launches in the second half of its trading year would be an “evolution” of its Pwr-Bru sub-brand.
Marrying the “essence” of Irn-Bru with “bold flavour”, plus caffeine, taurine and B-Vitamins to feed an energy drink hungry market has already created four varieties of Pwr-Bru – Origin Original, Diablo Cherry, Maverick Berry and Dropkick Tropical.
New cocktail products coming too
New products are on their way, Mr White said, adding: “We’ll also be launching shake-and-serve cocktails for the hospitality market and a double-strength cocktail for retail.”
He was speaking after AG Barr announced a 6.7% year-on-year jump in adjusted pre-tax profits, to £27 million, for the 26 weeks to July 30. Like-for-like revenue rose by 10.4% to £174.3m.
Mr White said part of the sales improvement was down to inflation but volumes were up too.
The total UK soft drinks market increased in value by 8.8% across the period, while reported volumes fell by 4.2%.
“Sustained price inflation has continued to feature across the market,” AG Barr said, adding: “Against this backdrop we have gained both value and volume market share.
Meanwhile, Mr White said he wished famous old rival Bon Accord Soft Drinks well following its revival and subsequent success in getting its products into supermarkets.
Renewing old rivalries?
At one time, AG Barr, Bon Accord and James Dunbar dominated the Scottish soft drink market.
The 120-year-old Bon Accord brand was born in the north-east.
It withered and died in 2000 but has been relaunched and refreshed by Edinburgh-based Karen Knowles, great-great granddaughter of the brand’s Robb family founders.
Mr White said: “It’s a lot smaller than us, of course, but we wish them well.”
AG Barr’s chief executive also said AG Barr had not been thwarted in its attempts to “get the Bru through” to customers throughout the UK, despite strike action at its production and distribution centre in Cumbernauld.
The ongoing dispute involves drivers who turned down a 5% pay rise.
Unite the Union has claimed the strikes may hit the “cash-rich” firm’s supplies of “Scotland’s other national drink” and urged bosses at AG Barr to “do the right thing”.
The strikes have had no impact on performance “in any shape or form,” Mr White told the P&J. The dispute involves a relatively small number of drivers at the firm, he added.
A.G. Barr appear to think that it is ok to offer 5% to loyal, hard working employees.
Everything costs so much more nowadays, so A.G. Barr, as a highly profitable company, need to do the right thing and put another offer on the table that is acceptable to our members @irnbru pic.twitter.com/TuqazV8Vuc
— Irn Bru Shame on You (@agbarr23_) September 14, 2023
‘Legions of people’ at AG Barr devoted time and energy to preparing for ill-fated deposit return scheme
Asked if the collapse of Scotland’s proposed Deposit Return Scheme had blown much of a hole in AG Barr’s first half balance sheet, he said it was more of an “opportunity cost”.
The firm invested “huge value in time and effort”, with “legions of people”across the business devoting energy to preparing for the ill-fated scheme’s introduction, he said.
On the company’s results, Mr White said: “We have made significant financial and strategic progress in the first half and have exciting plans in place for the balance of the year to sustain our growth momentum.”
Financial services group AJ Bell said the UK market for sports and energy drinks was enjoying “robust growth”.
It also said AG Barr was on track to grow annual profits for a third straight year as it “picks up the pieces in the wake of the damage done by lockdowns and the pandemic”.
AJ Bell added: “The trade-off may well be that the company sacrifices some operating margin to achieve this, but shareholders could still be pleased if the outcome is a resumption of sustained growth, especially after the challenges that have faced the firm over the past decade or so.
“These have included regulation on sugar content, Covid and lockdowns, carbon dioxide shortages and now input cost inflation. The uncertainty caused by Scotland’s proposed deposit return scheme continues to linger, even if it is currently in abeyance.”