Strathmore, the spring water brand that AG Barr has owned since 2006, had been set for discontinuation in January 2026 as part of the company’s efforts to simplify its structure and boost profits.
But AG Barr confirmed today that the sale of the Strathmore brand and Forfar production site had been completed to Welsh water company Tŷ Nan.
Meanwhile, AG Barr has acquired a 50.1% stake in Innate-Essence Ltd, for an initial consideration of £15m ($20m).
Innate-Essence is the company behind The Turmeric Co., a leading brand in the functional shots market, and founded by former international football player Thomas Hal Robson-Kanu.
AG Barr’s portfolio is led by top UK brands such as Irn Bru, Rubicon, Boost and Funkin.
In the first half of the FY2025-2026, revenue is expected to come in at around £228m, up 3% on the same period the year before.
Furthermore, the company saw several record weeks in Q2.
Boost delivered strong double-digit growth; while Irn Brun and Rubicon were flat. Funkin saw continued growth in the off-trade, although faced challenges in the on-trade.
Known as Scotland’s ‘other national drink’ (referencing Scotch as the country’s best-known beverage), Irn Bru has powered the company’s portfolio for decades and makes up 33% of total business revenue share.
However, the orange soda faces the challenges of the category: firstly a consumer move away from beverages they perceive to be less healthy, such as soda; and secondly vulnerability to the UK’s soda tax (now at 4.5g sugar per 100ml after reformulation in 2018, it is currently exempt, but this could change if the levy thresholds are revamped)
AG Barr expects momentum to continue into the second half of the year with revenue and profit growth expectations maintained.
“Trading improved during H1 and we enter H2 with strong momentum and continued progress on margin improvement as our strategic initiatives continue to deliver,” said Euan Sutherland, CEO, AG Barr.
“I am also excited about our expansion into the functional beverage segment working alongside Thomas Robson-Kanu and the Innate-Essence team.”
The portfolio moves makes sense, say Shore Capital analysts Darren Shirley and Clive Black.
“The announcement of the investment in Innate-Essence, while rationally exiting Strathmore, are good example of evolving thinking where we foresee an AG Barr that is more relevant to customers and shoppers alike.”
“Innate-Essence was founded by former Premier League footballer Thomas Robson-Kanu and his father in response to significant injury challenges the former faced early in his career, and fully in line with the Group strategy provides AG Barr with further access to the fast growing ‘functional hydration’ and ‘healthier for you’ areas of the beverage market, whilst also bringing a well- developed manufacturing capability with capacity for growth.”
