Britvic makes solid start to year

Britvic, which employs 209 staff in Leeds, reported first quarter revenue of £337.2m, an increase of 3.3 per cent on the previous year.

Simon Litherland, chief executive of Britvic, said: “We have delivered a solid start to the new financial year, with group revenue growing 3.3 per cent ahead of a strong first quarter last year.

“As we said at our preliminary results, the introduction of a soft drinks industry levy in the UK and Ireland brings a level of uncertainty, but we are well placed to navigate this given the strength and breadth of our brand portfolio and exciting marketing and innovation plans.

“In addition, our continued focus on revenue and cost management and the delivery of the final phase of our business capability programme means we remain confident of making further progress in 2018.”

Revenue in the UK increased 1 per cent as carbonates continued to outperform the market, the company said. Carbonates revenue increased 4.9 per cent, driven by the continued success of Pepsi MAX.

However, stills revenue declined 6.6 per cent with a volume decline of 4.4 per cent. Britvic said it was launching more premium Robinsons ‘Fruit Creations’ and ‘Cordials’ ranges.

Britvic absorbed a number of one-off costs following the collapse of wholesaler Palmer and Harvey.

The wholesaler, which supplied goods such as tobacco, alcohol and sweets to convenience stores, was in debt to several suppliers. Talks failed to rescue the stricken business.

International revenue declined 8.1 per cent at Britvic, compared to a 19.8 per cent increase in quarter one last year which followed the launch of Fruit Shoot multipacks in the US.

The soft drinks company will close its Norwich factory in 2019 following the end of a collective consultation.

Britvic is likely to incur approximate one-off costs of £35m-£40m for this year as a result of its business capability programme and the closure of its Norwich factory.

In January the firm launched a new sustainability programme aimed at encouraging healthier lifestyles. Britvic has revamped its bottling plant in Leeds to provide greater efficency.

The programme called ‘A Healthier Everyday’ aims to encourage consumers to live healthier lifestyles, put more back into communities and do more environmentally.

Clive Hooper, UK supply chain director at Britvic, said the programme is “firmly embedded” in the company’s business strategy. He added that this builds on its existing sustainability strategy.

Mr Hooper said: “The other thing that we’ve done is we’ve put a new onsite warehouse in Leeds. It’s important because in the past we didn’t have enough space to store all the products we were making in Leeds in the city.

“As a result we were having to ship a lot of that product down to the Midlands and sometimes bring it back up. Now with the new warehouse we have enough space to store in Leeds and deliver it locally to our customers.”

The sugar tax is a major talking point in the soft drinks industry at the moment. The tax is due to come in later this year.

However, Britvic, which has taken out 20 billion calories from its portfolio of drinks through sugar reduction, says it is well placed ahead of the levy coming into force.

Mr Hooper said: “We’ve taken all added sugar out of our Fruit Shoot brands. We’ve significantly reduced sugar in all of our other brands and therefore when the sugar tax comes in in April, we’re in a really good place as a business. We’ve already done the work.”

Leeds is a major part of Britvic’s operations in the UK. The firm employs 209 staff in the city.

“This year it will be our second biggest site in terms of volume out,” Mr Hooper said.

He added: “We’ve spent a lot of money on the site. It is now full from the point of view of space for new production lines and it’s got a very positive future.”

Energy drinks have also been making headlines recently with campaigners calling for a ban on their sale to younger people.

Britvic said that from next month it will no longer produce any traditional energy drinks in the UK. Instead the soft drinks giant said it will focus on its more natural caffeine-free energy drink Purdey’s.