News briefs: Britvic boost and Eastern European water

By Neil Merrett

- Last updated on GMT

Related tags Bottled water Soft drink Eastern europe Coca-cola Analyst Britvic

This week, Britvic says the strong performance of its global brands is keeping it on track to meet profit forecast and the Eastern European market for bottled water shows potential for further growth.

Britvic boosted by 12-month sales surge

UK-based soft drink maker Britvic says sales are expected to be up by 29.3 per cent for the 12-month period ending 28 September as its non-carbonated brands narrowly outgrew its carbonated products.

In a trading statement released today, the company said that despite the affects of an economic downturn, which it has felt since the spring, sales growth proved to be resilient on the back of the group’s marketing and innovation initiatives.

For both its domestic and international markets, Britvic said that sales reached £725.8m, up four per cent for the 52-week period. The company posted an additional £200.7m from its Irish operations.

In the UK market alone, sales of non-carbonated brands like squashes increased by 4.8 per cent, with carbonated drinks posting a 4.1 per cent improvement in revenues, the company said.

Company chief executive Paul Moody said that the company was confident it remained on track to meet its yearly growth goals.

“We have delivered a strong performance despite the disappointing weather, rising raw material and energy costs and the challenging market conditions,”​ he stated.

“The business has achieved good revenue growth, increased market volume and value share with tight cost control helping to deliver our target of increasing [UK] & International operating profit margin by at least 10-15 basis points.”

Eastern Europeans lapping up bottled water - report

Sales of bottled water brands across Eastern Europe rose by 10 per cent in 2007, amounting to the equivalent of 13.2 billion litres, says a new report.

Market analyst Zenith International said that the overall value of the segment within the region had grown by 17 per cent over the period to €5bn, normally double that recorded in 2000.

The analyst said that with many markets posting lower consumption than their Western European counterparts, further growth for bottled water was to be expected. The potential growth could offer major opportunities for beverage groups in a number of markets like Russia, according to Zenith’s market intelligence director, Gary Roethenbaugh.

“Countries with the lowest uptake include Russia on 19 litres per person, Belarus on 23 litres and Ukraine on 27 litres,”​ he stated. “This represents an attractive opportunity for new market entrants as well as existing players.”

According to Roethenbaugh, key factors in this growth over the year included growing rates of employment that are creating stronger economic conditions and higher levels of disposable incomes.

Greater investment in modernising production operations and growing awareness of hydration were also contributors to the sales improvements, the analyst said.

However, leading multinationals still have their work cut out in boosting their own market shares.

There is evidence that some East European consumers have a preference for local companies and brands,”​ stated the company. “Despite the active presence of global soft drinks heavyweights Coca-Cola Hellenic, Pepsi Bottling Group, Danone and Nestlé, it is interesting to note that they lead just three of the national markets between them.”

Related topics Manufacturers Soft drinks

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