After last year’s non-starter of a summer, the recent hot spell is welcome news for soft drinks companies.
The positive impact was clear to see from today’s financial updates from AG Barr, Britvic and Nichols.
AG Barr, for example, said it expected sales for the six months ending 28 July to increase by 4.9%, but it predicted a whopping 9.8% increase in sales in the second half of the period.
The hot spell could benefit the category even after the overcast days and rain return. Nichols CEO Marnie Millard told The Grocer this morning that it should help get people back into the habit of putting soft drinks in their shopping trollies.
The category certainly needs a helping hand. Growth has been hard to come by in recent years and brands have come to rely increasingly on promotions to maintain volumes.
Signs are that enthusiasm for aggressive promotional activity is on the wane in some quarters. Nichols has stated publicly that it is scaling back on fizzy drink promotions in order to improve its gross margins.
And today Britvic’s trading update revealed a similar approach. The Pepsi bottler said it grew average realised price by 6% in the last quarter. It has sacrificed some volume growth but the potential gains in margin should amply compensate.
Britvic still has a lot to prove but, with a helping hand from the weather, it looks in better shape than it has for some time.
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