Soft drinks volumes down 11% in on-trade

Consumer spend has been severely depressed as a result of the recession with soft drinks volume down 11 per cent and value down 13 per cent in the licensed trade here (in the five month period October 2010 to February 2011 compared to the same period the previous year).

Nevertheless, Britvic Ireland, which enjoys volume sales of over 250 million litres and revenues of over €260 million a year (with value outgrowing volume), has planned a number of launches over the next three years and has told investors that despite misconceptions about the low growth potential in Ireland for the firm, there remains considerable headroom for development in the country going forward in a soft drinks market worth €1.5 billion on an all-island basis.

Speaking at a company investor seminar in London recently Britvic Ireland’s Managing Director Andrew Richards stated that the company has a “strong starting point” for growth and could drive around €800 million of additional revenue despite the ecomomy.
"Once the market starts growing again, then the size of the prize will be even greater than this going forward," he claimed, "There’s a misconception in some quarters that the Irish market holds little or no growth potential for Britvic. Let me be absolutely clear on this point: We have a strong starting point and at 25 per cent of the total soft drinks market, we have the highest market share of any business unit within the Britvic Group. Whilst significant, this still gives us plenty of headroom for growth."

He pointed out that the on-trade soft drinks market in Ireland was worth some €360 million and that a one per cent share growth in the island’s on- and off-trade combined represents an extra €8 million in sales.

"Britvic Ireland is realistic about our short-term growth prospects,” he said, “However we are equally clear that there is considerable headroom for Britvic Ireland to grow in the medium term. We have great strength to leverage investment and position the organisation to drive future growth.”

Britvic Ireland projects savings of €4.7 million this year through reducing the  salary bill by €3.9 million and making logistical savings of €800,000.

For 2012 this figure will be €6.9 million via a €5.7 million reduction in salary costs and a €1.2 million reduction in logistics expense.