In an effort to capitalize on the growing demand for adult soft drinks, AG Barr, the maker of Irn-Bru, has acquired two UK companies: Fentimans and Frobishers Juices. This strategic move aims to diversify its brand offerings and tap into a market increasingly focused on lowering alcohol consumption.
AG Barr announced these acquisitions on February 3, alongside a trading update for its financial year, which concluded at the end of January.
“Both brands operate in the attractive adult soft drinks market, which is benefitting from the consumer trend of reduced alcohol consumption,” said AG Barr, known for its ownership of the Funkin brand.
“These acquisitions reflect the execution of further meaningful and targeted M&A to elevate growth through broadening the brand portfolio while providing opportunities for cost synergies.”
AG Barr paid £38 million ($52 million) for Fentimans in a deal concluded yesterday. The company also acquired Frobishers for £13 million, with that transaction finalized towards the end of AG Barr’s financial year.
Family-owned Fentimans, located in northeast England, specializes in producing “botanically brewed” mixers and soft drinks. Frobishers, based in Devon, was sold to UK juices business Cobell in 2009; Cobell was later acquired by ingredient giant Symrise eight years afterward.
Recent accounts from Companies House indicate that Fentimans generated a turnover of £35.7 million in 2024, a decrease from just under £39 million the previous year. The company recorded a profit of £1 million, recovering from a loss of just over £514,000 in 2023.
In its latest financial update, AG Barr reported a revenue increase of approximately 4% to £437 million for the year ending January.
The trading update also highlighted AG Barr’s “adjusted operating margin,” which stood at 14.7%, up 110 basis points from the previous year. The company attributed this improvement to “ongoing efficiency initiatives and supply chain investment.”
Shares in AG Barr rose by 6.21% to 690.3p at 12:32 GMT, with the company scheduled to report its full annual results on March 31.
CEO Euan Sutherland noted, “Our top- and bottom-line performance for FY25/26 is in line with expectations, and importantly, we have laid strong foundations for future growth. We enter FY26/27 with good momentum in our core brands and from the introduction of exciting new products.”
Key Takeaways
- AG Barr has acquired Fentimans and Frobishers Juices to expand in the adult soft drinks market.
- The total investment amounted to £51 million ($71 million).
- Fentimans reported a turnover decrease, but achieved a profit recovery.
- AG Barr’s revenue increased by 4% to £437 million in its latest financial update.
- The adjusted operating margin improved to 14.7% due to efficiency initiatives.
- Shares were up 6.21%, reflecting positive investor sentiment.
FAQ
What is the reason behind AG Barr’s acquisitions?
AG Barr is looking to diversify its offerings by tapping into the growing market for adult soft drinks, aligned with trends of reduced alcohol consumption.
How much did AG Barr pay for Fentimans and Frobishers?
AG Barr invested £38 million for Fentimans and £13 million for Frobishers, totaling £51 million.
What were Fentimans’ financial results for 2024?
Fentimans generated a turnover of £35.7 million and recorded a profit of £1 million, compared to the previous year’s loss.
When will AG Barr report its full annual results?
AG Barr is scheduled to present its full annual results on March 31.
“AG Barr strikes M&A one-two in “adult” soft drinks” was originally created and published by Just Drinks, a GlobalData owned brand.
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