Soft drinks companies AG Barr and Fever-Tree have reported strong sales and predicted good results for 2024, even though consumers are feeling the squeeze.
Investors welcomed the latest updates, and shares in both companies rose on Tuesday morning. AG Barr, which makes Irn-Bru and Rubicon, said sales jumped by over a quarter last year, helped by acquisitions and steady demand from customers.
Revenue increased by 25.9% to £400million for the year to January 28, compared to the previous year. AG Barr said this was due to "strong" growth across its brands, with like-for-like revenue up 8%.
The company also benefited from owning the Boost energy drink business for a full year after buying it in December 2022. The company's adjusted pre-tax profits rose by 16.1% to £50.5 million for the year, which was better than expected.
Chief executive Roger White, who is leaving the company next month, said he was positive about the future as costs become more stable and price rises for customers slow down. "The outlook is certainly more settled from a price and cost point of view," he said.
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"Across our products, we are seeing price inflation of mid-to-low single digits, so coming towards much more normal levels and that ultimately helps volumes. There are still some parts of the market where consumer demand is weaker, like in the on-trade there is still some softness in the late-night trade where we have younger people, students, who still have tighter finances."
Meanwhile, mixer specialist Fever-Tree also recorded a rise in revenues as it was boosted by higher demand in the US. It told investors that revenues increased by 6% to £364.4 million in 2023, compared with the previous year.
It benefited from a 22% jump in US revenues, with the region overtaking the UK for the first time as Fever-Tree’s largest market. UK revenues dropped by 1% to £114.8 million “following a summer trading period impacted by adverse weather”.
Tim Warrillow, co-founder and chief executive, said: "2023 was a year when the Fever-Tree brand once again grew in breadth and depth, with market share gains across the globe. Perhaps the most significant milestone was establishing the US as our largest region, and with it, extending our market leadership position in both the US tonic water and ginger beer categories."
"The G&T of course remains an integral growth driver for the group but 2023 was a year where we saw a step change in our non-tonic portfolio. Not only have our gingers and sodas continued to see strong growth but the last 12 months have seen the launch of our range of cocktail mixers alongside the rollout of our adult soft drink range in the UK."
Shares in AG Barr jumped by 6% to 545p, while Fever-Tree's shares also went up by 6.6% to 1,147p.
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