UK soft drinks cradle Cott growth

By Chris Mercer

- Last updated on GMT

Related tags: Soft drinks, Soft drink

Access to aseptic drinks production and promising growth in
non-carbonated soft drinks in the UK helped Cott Corporation, the
world's largest private label soft drinks supplier, to increase
sales last year.

Cott's sales would have dipped 3.6 per cent in 2006 had it not been for the group's takeover of Macaw, a leading private label drinks supplier in the UK.

Instead that deal enabled the multinational's revenue to creep up 0.9 per cent to $1.77bn.

Macaw's contribution echoed newfound optimism on the UK soft drinks market in recent weeks, following a relatively strong fourth quarter of 2006.

Brent Willis, Cott chief executive, praised "team actions [in the UK] to expand in new channels"​, particularly their use of aseptic production lines acquired as part of the Macaw deal.

Aseptic production has been a fast-growing area of soft drinks manufacture for the last couple of years because it enables firms to target growing consumer demand for non-carbonated and healthier products.

Cott has used Macaw's aseptic lines to improve its sports drinks offering and has signed deals with several retailers, including the rapidly expanding Starbucks chain and one UK hypermarket.

Willis said Cott's UK business was now "right on track"​ with good margins and good volume growth. Cott's acquisition of Macaw gave it a 57 per cent share of the country's private label soft drinks market.

Conversely, a sourcing problem in that same UK market played a major role in plunging Cott's profits into the red for the year.

The group made a net loss of $17.5m, worsened by its UK pectin supplier going bust - something Willis said was "unexpected and highly disappointing"​.

Troubled times in other markets and charges relating to plant closures, mainly in the US and done as part of a radical overhaul of the business, compounded the full year loss.

Related topics: Soft Drinks & Water

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