AG Barr, the maker of the iconic Irn-Bru, has expanded its portfolio by acquiring the well-known soft drink brands Fentimans and Frobishers. This strategic move aims to tap into the growing preference for non-alcoholic beverages among consumers.
Acquisition of Fentimans
AG Barr purchased Fentimans, renowned for its ginger beer since 1905, for approximately £38 million, utilizing a mix of cash and debt.
Fentimans originated in West Yorkshire, where Thomas Fentiman, an iron puddler from Cleckheaton, obtained a recipe for botanically brewed ginger beer. Today, the company also produces other beverages, such as Rose Lemonade and Curiosity Cola.
Acquisition of Frobishers
In addition to Fentimans, AG Barr has acquired Frobishers, a premium fruit juice maker based in Devon, for £13 million. This purchase forms part of its strategy to enhance growth by diversifying its brand offerings.
Company Statements
Euan Sutherland, chief executive of AG Barr, mentioned: “The synergies associated with these acquisitions are expected to drive meaningful accretion over the medium term.”
AG Barr’s stock saw a rise of 33p, or 5 percent, reaching 683p.
Moreover, AG Barr anticipates reporting a 4 percent increase in revenue to £437 million for the year ending in January, with results forthcoming in March. Analysts suggest this indicates a sales growth of 4.8 percent in the latter half of the year, an improvement over the 3.1 percent seen in the first six months.
• Irn-Bru with a twist for Burns Night — plus more trends to know now
The report indicates that Irn-Bru has experienced “modest growth” in the second half of the year, attributed to effective marketing and distribution strategies. Gains from the Rubicon and Boost brands have counterbalanced a decline in sales of Funkin Cocktails. Projected adjusted profit margins are expected to rise to around 14.7 percent, up from 13.6 percent the previous year, owing to efficiency measures and supply chain investments.
The Irn-Bru factory in Cumbernauld
PRESS ASSOCIATION
Analysts from Panmure Liberum expressed that AG Barr’s entry into the appealing adult soft drinks market could generate considerable cost advantages through in-sourcing production and lowering operational costs, alongside significant revenue growth from expanding distribution networks.
Headquartered in Cumbernauld, North Lanarkshire, AG Barr primarily generates its revenue from the UK. Its diverse portfolio includes brands like Moma oat milk, Tizer, and Rio. Recently, the company made the decision to discontinue the Strathmore bottled water brand due to competitive challenges.
Founded by Robert Barr in Falkirk in 1875, AG Barr originally sold “aerated waters.” The company was passed down through generations and launched Iron Brew, its most famous product, in 1901. In 1946, the drink was rebranded to Irn-Bru to comply with food labeling laws requiring brand names to be “totally true.”
Key Takeaways
- AG Barr has acquired Fentimans and Frobishers to enhance its non-alcoholic beverage range.
- The purchase of Fentimans was valued at £38 million, while Frobishers was acquired for £13 million.
- AG Barr reports expected revenue growth of 4 percent for the upcoming financial year.
- Irn-Bru has shown modest growth, aided by effective marketing strategies.
- Operational efficiency improvements are anticipated to boost profit margins.
FAQ
Question
What brands does AG Barr own?
Question
AG Barr’s portfolio includes Irn-Bru, Fentimans, Frobishers, Moma oat milk, Tizer, and Rio.
Question
What was the revenue forecast for AG Barr?
AG Barr expects a 4 percent increase in revenue, reaching £437 million for the financial year.
Question
When was Irn-Bru rebranded?
Irn-Bru was rebranded in 1946 to meet food labeling regulations.
Question
Where is AG Barr headquartered?
AG Barr is headquartered in Cumbernauld, North Lanarkshire.
The recent acquisitions position AG Barr to take advantage of trends favoring non-alcoholic beverages, driving growth amid changing consumer preferences. It will be interesting to see how these brands contribute to AG Barr’s portfolio in the coming years.
