Going for gold: Commonwealth Games helps Irn-Bru and Strathmore beat ‘challenging’ soft drink market

By Rachel Arthur contact

- Last updated on GMT

‘Team Strathmore’ from Team Scotland: gymnast Dan Keatings, paralympic sprinter Libby Clegg, and swimmer Robbie Renwick
‘Team Strathmore’ from Team Scotland: gymnast Dan Keatings, paralympic sprinter Libby Clegg, and swimmer Robbie Renwick

Related tags: United kingdom, Soft drink

A.G.Barr says sports sponsorship with its Strathmore water brand has helped drive a 10% increase in company profit, with its other drinks also benefiting from sporting associations.

The Scottish soft drink manufacturer’s Strathmore water brand grew more than 20% in 2014, and sports sponsorship will continue with a partnership with Scottish Rugby.

The association with the Commonwealth Games also covered fellow flagship brands Irn-Bru, Barr, and Rubicon.

A.G.Barr’s full year results are set against a ‘challenging’ backdrop in the UK soft drinks market, which the company says could become more difficult as a result of price deflation.

‘Outperforming the market’

Released today, A.G.Barr’s results for the year ending January 25, 2015, saw profit on ordinary activities (pre tax and exceptional items), increase by 10% to £41.9m ($62.3m), up from £38.1m ($56.7m) in 2014.

The company says all its core brands grew and outperformed the market. Irn-Bru sales grew 1.6%, with strong contributions from sugar free. Exotic juice drink brand Rubicon grew 3.4%, and the Barr range of flavored carbonates grew 6%.

Particularly strong growth was seen in the stills segment.

Roger White, Chief Executive, A.G.Barr told BeverageDaily.com the Strathmore brand grew 20%: a performance he attributes to innovation and development, the popularity of flavoured waters such as Strathmore Twist, and a good marketing programme – including sponsorship of the Commonwealth Games.  

Strathmore in the Athletes’ Village

“The Commonwealth Games was a key part of our marketing campaign last year and drove a lot of awareness to the brands,” ​he said.  

“I think it had a positive effect on all the brands in terms of awareness and loyalty. For us, it’s less to do with intrinsic advertising, and more about the interaction with consumers at the event and outside the event.”

strathmore

Strathmore water and other beverages were supplied to the Athletes’ Village and Glasgow 2014 venues.

A.G.Barr’s other sports sponsorships have included Rubicon’s association with Twenty20 cricket in 2010/11, Irn-Bru’s backing of the Scottish Football League, and support for the Rugby Football League, England.

Yesterday Irn-Bru became the official soft drink partner of The Football League in a three year deal.

Price deflation

White warns that overall market conditions in the UK soft drink sector will remain “challenging.” He points to a period of price deflation in the market, but says he is confident the company’s business model will help maintain healthy performance for the brands.

A.G.Barr acquired Funkin Limited from its founding shareholders in February this year, a move that broadens the brand portfolio and opens up a new segment for the company.

Funkin produces a range of premium cocktail mixers including fruit purees and syrups, with sales concentrated in the on-trade channel and restaurants. The business is mainly in the UK, but with units established in the US and Europe.

“Cocktails are a good growth area, not just for top mixologists, but it’s growing into a mainstream outlet,”​ said White.

Related topics: Soft Drinks & Water, Juice Drinks

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