Britvic has announced the purchase of ready-to-drink (RTD) coffee brand Jimmy’s Iced Coffee.
The deal, revealed alongside Britvic’s third quarter trading update today (27 July) and struck for an undisclosed sum, sees the UK’s fastest-growing RTD coffee brand join the roster of the Hertfordshire drinks maker.
Britvic said it intends to further accelerate growth of the brand, which in the year to June 2023 grew retail sales value by 43% to £17m, through its own distribution network.
The Robinsons brand owner highlighted the “large and fast-growing” UK iced coffee category (worth £280m in retail sales value in 2022 according to Circana data cited by Britvic) and the health credentials of Jimmy’s when explaining its rationale for the deal.
“Jimmy’s is well aligned to our ‘healthier people, healthier planet’ pillar, with lower calories per serve than the category average, fully recyclable packaging and compliance with HFSS legislation,” it said.
Simon Litherland, Britvic’s CEO added: “The focus on innovation, great taste with fewer calories, and fully recyclable packaging makes Jimmy’s a perfect fit for Britvic.
“We have a long track record of acquiring and developing brands, and I am confident in our ability to quickly expand our position in the iced coffee category – which is an exciting and fast-growing market segment.”
Jimmy’s was founded by Jim Cregan and his sister Suzie Owen in 2010. Together, the duo have grown the brand to become a staple of the RTD coffee category, with more than 10,000 distribution points.
Cregan and Owen will both stay on as ambassadors for the brand following the deal, Brtivic said.
Cregan said: “We have poured our heart and souls into making this business what it is today and we feel so fortunate that Britvic is now able to take Jimmy’s to places about which we could only dream.
“We are excited to watch the next chapter of the journey unfold and look forward to Jimmy’s Iced Coffee becoming even more well known and enjoyed.”
Announced alongside the Jimmy’s deal was the purchase of Extra Power, a Brazilian energy drinks brand. In a note to clients, Jefferies analyst Ed Mundy said both purchases were bolt-on acquisitions that “appear to make strategic sense”.
The M&A one-two, which will be funded through existing internal resources, is Britvic’s first dealmaking since the purchase of plant-based drinks business Plenish in May 2021.
“Similar to the Plenish bolt-on, there are opportunities for Britvic to increase distribution points [on Jimmy’s] … and bring synergies on procurement and innovation,” Mundy added. “Manufacturing likely stays third party until the brand has scale, given Britvic does not currently have dairy capability.”
In the three months to 30 June, Britvic reported revenues of £476.7m, up 9.9% on the corresponding period a year prior.
In its ‘Great Britain’ reporting segment, sales grew 10.1%, which the company attributed to “volume growth in both retail and hospitality channels”.
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