AG Barr, the company renowned for its iconic Irn-Bru, has recently acquired the soft drink brands Fentimans and Frobishers, marking a strategic shift towards non-alcoholic beverages. This move aligns with evolving consumer preferences and highlights the company’s commitment to expanding its product range.
AG Barr Acquisitions
AG Barr purchased Fentimans, a brand celebrated for its ginger beer since 1905, for approximately £38 million, utilizing a mix of cash and debt.
Fentimans has deep roots in West Yorkshire, originating from a recipe found by Thomas Fentiman, an iron puddler from Cleckheaton, who created its botanically brewed ginger beer. Today, the company also offers a variety of soft drinks, such as Rose Lemonade and Curiosity Cola.
Additionally, AG Barr has acquired Frobishers, a premium fruit juice brand based in Devon, for £13 million. This acquisition is aimed at enhancing growth by “broadening the brand portfolio.”
Financial Impacts
Euan Sutherland, AG Barr’s Chief Executive, remarked that: “The synergies associated with these acquisitions are expected to drive meaningful accretion over the medium term.”
Following these acquisitions, AG Barr’s shares experienced a rise of 33p, or 5 per cent, bringing them to 683p.
The company anticipates reporting a 4 per cent revenue increase to £437 million for the year ending in January, with results expected in March. Analysts suggest this reflects estimated sales growth of 4.8 per cent in the second half of the fiscal year, compared to 3.1 per cent in the first half.
Growth of Irn-Bru and Other Brands
Irn-Bru has shown “modest growth” in the latter half of the year, driven by effective marketing and distribution strategies. Strong performances from its Rubicon and Boost brands have contributed to offsetting declines in Funkin Cocktails. Adjusted profit margins are anticipated to rise to about 14.7 per cent, an increase from 13.6 per cent last year due to efficiency measures and supply chain investment.
The Irn-Bru factory in Cumbernauld
PRESS ASSOCIATION
Analysts from Panmure Liberum noted that AG Barr’s entrance into the appealing adult soft drink market could yield considerable cost synergies through in-sourcing production and reducing overheads, as well as enhanced revenue from expanded distribution.
Headquartered in Cumbernauld, North Lanarkshire, AG Barr primarily operates within the UK. Besides Irn-Bru, their portfolio includes brands such as Moma oat milk, Tizer, and Rio. Recently, the company decided to discontinue the Strathmore bottled water line, acknowledging its difficulties in the competitive landscape.
Founded in 1875 by Robert Barr in Falkirk, the company began by selling “aerated waters”—the term for soft drinks at the time. The family-owned business introduced Iron Brew, its flagship product, in 1901, later rebranding it as Irn-Bru in 1946 to comply with food labeling regulations.
Key Takeaways
- AG Barr acquires Fentimans and Frobishers to expand its non-alcoholic beverage portfolio.
- Fentimans is known for its ginger beer and various soft drinks since 1905.
- The acquisitions aim to achieve growth through brand portfolio diversification.
- AG Barr anticipates a significant revenue increase and synergies from these acquisitions.
- Irn-Bru shows modest growth due to effective marketing and strong sales from other brands.
FAQ
What brands does AG Barr own?
AG Barr owns several brands, including Irn-Bru, Fentimans, Frobishers, Moma oat milk, Tizer, and Rio.
What is Fentimans known for?
Fentimans is renowned for its ginger beer and offers a variety of other soft drinks, including Rose Lemonade and Curiosity Cola.
Why did AG Barr acquire Frobishers?
The acquisition of Frobishers is part of AG Barr’s strategy to broaden its brand portfolio and increase growth in the premium fruit juice segment.
How has Irn-Bru performed recently?
Irn-Bru has seen modest growth, attributed to successful marketing strategies and strong performance from other associated brands.
What was the original name of Irn-Bru?
Irn-Bru was originally named Iron Brew when it was launched in 1901.
In conclusion, AG Barr’s recent acquisitions demonstrate its commitment to expanding within the non-alcoholic beverage sector. By enhancing its brand portfolio, the company is poised for continued growth in an evolving market.
