Deflation in the UK soft drinks industry will make it increasingly difficult for manufacturers to achieve growth, AG Barr has said.
The maker of Irn-Bru, Tizer and Rubicon made the warning as part of its end-of-year results published yesterday, when it also reported an increase in pre-tax profits of 10% compared to 2014.
“We have delivered an excellent financial performance in difficult market conditions over the past 12 months, whilst continuing to build the platform required for sustained and profitable long-term growth,” said AG Barr chief executive Roger White.
But White continued: “Overall market conditions are expected to remain challenging. The UK soft drinks market is currently experiencing a period of price deflation which will, if sustained, make it more difficult for many businesses to deliver the top line growth of recent years.”
Earlier this week, we reported that carbonated beverages had experienced a 0.5% decline across Western Europe, according to new research. Carbonates was among five surveyed categories to experience a decline over the last twelve months.
AG Barr added: “There is no doubt that consumer preferences are changing within the total soft drinks category. Areas where traditional growth has been available are now proving more difficult to generate growth, making differentiated brands and appealing to consumers more important than ever.”
© FoodBev Media Ltd 2024