AG Barr, the company behind Irn-Bru, has expanded its portfolio by acquiring the soft drink brands Fentimans and Frobishers in a move aimed at capitalizing on the growing consumer shift away from alcoholic beverages.
The firm purchased Fentimans, renowned for its ginger beer since 1905, for approximately £38 million through a blend of cash and debt financing.
Fentimans’ history traces back to West Yorkshire, where Thomas Fentiman, an iron puddler from Cleckheaton, acquired a recipe for botanically brewed ginger beer. Today, it also produces several other soft drinks, including Rose Lemonade and Curiosity Cola.
Additionally, AG Barr has acquired Frobishers, a premium fruit juice producer based in Devon, for £13 million, as part of its strategy to enhance growth by “broadening the brand portfolio.”
Euan Sutherland, chief executive of AG Barr, remarked: “The synergies associated with these acquisitions are expected to drive meaningful accretion over the medium term.”
Following these acquisitions, AG Barr’s shares increased by 33p, or 5 percent, reaching a value of 683p.
In addition to the acquisitions, AG Barr has projected a 4 percent rise in revenue, estimating £437 million for the year ending in January, which will be reported in March. Analysts noted this implies a sales growth of 4.8 percent in the second half of the year, in contrast to 3.1 percent in the first six months.
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The company stated that Irn-Bru has shown “modest growth” in the second half, attributed to effective marketing and distribution efforts. Moreover, good performance from the Rubicon and Boost brands has counterbalanced a decline in Funkin Cocktails. Adjusted profit margins are expected to rise to approximately 14.7 percent, an increase from 13.6 percent a year prior, thanks to efficiency measures and supply chain investments.
The Irn-Bru factory in Cumbernauld
PRESS ASSOCIATION
Analysts at Panmure Liberum have noted that AG Barr’s entry into the adult soft drinks market will yield significant cost synergies through in-sourcing production and reducing overhead costs, along with notable revenue synergies from distribution growth.
Headquartered in Cumbernauld, North Lanarkshire, AG Barr predominantly generates its sales in the UK. Its brand portfolio also includes Moma oat milk, Tizer, and Rio. Recently, the company made the decision to discontinue the Strathmore bottled water line, which it acknowledged had faced challenges in recent years.
The business was founded by Robert Barr in Falkirk in 1875, initially selling “aerated waters,” a term used at that time for soft drinks. The company has passed through generations of Barrs, launching Iron Brew in 1901 — its most recognized product. The beverage was rebranded as Irn-Bru in 1946 to navigate food labeling regulations that mandated brand names to be “totally true.”
Key Takeaways
- AG Barr has acquired Fentimans and Frobishers, expanding its soft drink range.
- The purchase price for Fentimans was approximately £38 million.
- Fentimans, known for its ginger beer, has a rich history dating back to 1905.
- The total acquisition cost for Frobishers was £13 million, aimed at enhancing brand diversity.
- AG Barr expects revenue growth of around 4% for the current fiscal year.
- Analysts predict significant synergies from these acquisitions.
FAQ
What brands does AG Barr own?
AG Barr’s portfolio includes brands such as Irn-Bru, Moma oat milk, Tizer, and Rio, among others.
Where is AG Barr headquartered?
The company is headquartered in Cumbernauld, North Lanarkshire, UK.
What is Fentimans known for?
Fentimans is renowned for its botanically brewed ginger beer and a variety of other soft drinks.
How much did AG Barr invest in Frobishers?
The investment made by AG Barr to acquire Frobishers was £13 million.
What historical significance does Irn-Bru hold?
Irn-Bru, originally launched as Iron Brew, has a storied history dating back to 1901 and underwent rebranding in 1946.
AG Barr’s strategic acquisitions signal its commitment to evolving consumer preferences while strengthening its market position in the soft beverage industry. The company continues to innovate and diversify its product offerings to meet the demands of a changing market.
