Roger White, chief executive of AG Barr, has told MCA that the group is increasingly focussing on growth in the on-trade.
White said that the success of its Funkin mixers brand and the increasingly popularity of soft drinks in the on-trade, provided huge opportunities for the group.
He again criticised plans for a sugar tax, saying the soft drinks market represented just 3% of sugar consumption in the UK and was proactively evolving its product, yet was the sole subject of Government intervention.
Yesterday the group released results for the first six months of its financial year, which showed a fall in like-for-like sales of 2.8% in the six months to 30 July with total revenue down to £125.6m (2015: £130.3m).
However, the Funkin business continued to perform ahead of expectations with revenue up 28% in the period.
White said: “Funkin has benefited from the underlying market for cocktails rising from specialist to being more mainstream but there’s also been a significant amount of innovation. Funkin have got a very unusual, positive business model for their clients.
“The existing core business has lots of scope to grow as we build on the relationships with the customer base. The innovation pipeline looks good and there’s lots we can do.”
On the potential of the on-trade in general, White said: “As the offering in the on-trade shifts and with the impact of the drink-driving changes in Scotland we’re positive as to what we can do to support that customer base. We’ve just put in £5m to £6m putting in a new multi-purpose glass line to give us capability to design products for the served market as opposed to take home. We’re investing behind what we expect to be an area of growth.”
On the general outlook, White said: “There’s been a lot going on in the outside world. Political and regulatory changes, changes in retail. We’ve come through what was a tricky period relatively well.”
On the sugar tax he said: “3% of sugar consumption in the UK is soft drinks. If you’re serious about making an impact on the way the nation consumes sugar then taxing one sector that is offering substantive improvement seems a bit daft.
“We are on track to move from 40% of our portfolio outside of low sugar to two thirds by 2017.”