Switching the target audience of Vimto from children to teens has prompted a 23.7% hike in sales, reports Alex Beckett
Vimto has regained its vim over the past couple of years. Sales of the purple soft drink, which was created in 1908 in Cheshire, have soared 23.7% to £43.8m over the past year [Nielsen 52w/e 26 December 2009], outstripping 2008's 6.2% growth almost fourfold.
Its performance helped boost shares in Nichols, the firm behind the soft drink, to a record high last month and the company said profits for 2009 would be well ahead of City expectations. And the driving force behind the brand's renewed vigour is Vimto Soft Drinks' MD Jonathan Bye (pictured), who joined the company in April 2008 from Patak's. Bye relaunched Vimto at the start of 2009, having recognised the brand wasn't meeting its potential. "We were typically growing about 5% each year. Everything was very positive but it wanted an injection of desire."
As a result he shifted the target audience from children to teenagers. He created the Seriously Mixed Up strapline (replacing Shurpling the Purple), introduced edgier marketing and packaging and launched a squeezy pouch format. He also made sweeping changes behind the scenes, halving to four the number of manufacturers Vimto outsources production to and slashing the number of SKUs from 155 to 65.
"It was a reduction in complexity and wastage," explains Bye. "It is easier to focus on 65 lines and we are now selling more. There were lots of changes, but it was mainly just putting the basics in place."
Bye has set a sales target of £60m by 2012 and with a 40-strong workforce at the Warrington HQ, he sees Vimto as a more effective business able to react swiftly to market trends. "We don't suffer the bureaucracy of some of our rivals and benefit from a quicker decision-making process," he believes.
Household penetration has increased 30% since the relaunch, snatching share from bigger brands. "Cordials are generally doing well out of the recession, although Robinsons is a £200m brand and growing at quarter of the rate we are," says Bye.
Where Vimto cannot yet compete with larger rivals is in its scale of distribution. It is stocked in the major retailers, but there is work to do to raise its profile beyond its northern heartland. This was one of the reasons it launched Cherry Vimto last month. Research indicated sales of cherry flavoured soft drinks had grown 142% over the past year, with southern England accounting for more than 60% of sales [diluted drinks only Nielsen MAT 5 September 2009].
The company is ploughing more cash into its marketing in 2010 to support the new flavour up 20% on last year to £5m.
Despite enjoying good relationships with retailers, Bye concedes he has difficulty passing on cost hikes resulting from exchange rate issues and steeper costs. However, he is not planning to let this derail growth plans. The company expects to acquire two soft drinks brands by the end of 2010 and has been approached by four other businesses with a view to Vimto handling their sales and marketing.
If Bye can maintain the sales momentum, Nicolas and his successors may struggle to keep the Vimto recipe secret for another 100 years.
Vimto has regained its vim over the past couple of years. Sales of the purple soft drink, which was created in 1908 in Cheshire, have soared 23.7% to £43.8m over the past year [Nielsen 52w/e 26 December 2009], outstripping 2008's 6.2% growth almost fourfold.
Its performance helped boost shares in Nichols, the firm behind the soft drink, to a record high last month and the company said profits for 2009 would be well ahead of City expectations. And the driving force behind the brand's renewed vigour is Vimto Soft Drinks' MD Jonathan Bye (pictured), who joined the company in April 2008 from Patak's. Bye relaunched Vimto at the start of 2009, having recognised the brand wasn't meeting its potential. "We were typically growing about 5% each year. Everything was very positive but it wanted an injection of desire."
As a result he shifted the target audience from children to teenagers. He created the Seriously Mixed Up strapline (replacing Shurpling the Purple), introduced edgier marketing and packaging and launched a squeezy pouch format. He also made sweeping changes behind the scenes, halving to four the number of manufacturers Vimto outsources production to and slashing the number of SKUs from 155 to 65.
"It was a reduction in complexity and wastage," explains Bye. "It is easier to focus on 65 lines and we are now selling more. There were lots of changes, but it was mainly just putting the basics in place."
Bye has set a sales target of £60m by 2012 and with a 40-strong workforce at the Warrington HQ, he sees Vimto as a more effective business able to react swiftly to market trends. "We don't suffer the bureaucracy of some of our rivals and benefit from a quicker decision-making process," he believes.
Household penetration has increased 30% since the relaunch, snatching share from bigger brands. "Cordials are generally doing well out of the recession, although Robinsons is a £200m brand and growing at quarter of the rate we are," says Bye.
Where Vimto cannot yet compete with larger rivals is in its scale of distribution. It is stocked in the major retailers, but there is work to do to raise its profile beyond its northern heartland. This was one of the reasons it launched Cherry Vimto last month. Research indicated sales of cherry flavoured soft drinks had grown 142% over the past year, with southern England accounting for more than 60% of sales [diluted drinks only Nielsen MAT 5 September 2009].
The company is ploughing more cash into its marketing in 2010 to support the new flavour up 20% on last year to £5m.
Despite enjoying good relationships with retailers, Bye concedes he has difficulty passing on cost hikes resulting from exchange rate issues and steeper costs. However, he is not planning to let this derail growth plans. The company expects to acquire two soft drinks brands by the end of 2010 and has been approached by four other businesses with a view to Vimto handling their sales and marketing.
If Bye can maintain the sales momentum, Nicolas and his successors may struggle to keep the Vimto recipe secret for another 100 years.
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