Britvic increases ad spend by almost 40% to ‘support growth’

Britvic increased its advertising and promotional spending by 38.9% in the six months to 31 March 2024, as the drinks giant claims to have delivered its “best-ever” first half performance.

Advertising and promotional spend in the first half was £30.2m, up 38.9% versus the same period in the previous year. Advertising represented 3.4% of own-brand revenue, up 2.7% from fiscal year 2023. This steep increase was partly to support growth.

Revenues rose 11.2% year-over-year to £880.3m, while “strong demand” for Britvic’s brands – including the likes of Robinsons and Tango – translated into 4.4% volume growth.

The company’s biggest area of advertising spend in the first half was behind the Pepsi brand, which it makes and sells in the UK. Britvic supported the brand’s new visual identity with marketing activity, including out-of-home advertising and social media activations.

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The significant year-over-year step up in advertising and promotional investment was partly due to a “low” comparison number, as Britvic “held back” spend last year in the inflationary environment, chief financial officer Rebecca Napier told investors today (15 May).

The business does expect a “significant” increase of advertising and promotional spend across the full year, she added, as it continues to invest for “sustainable growth”.

CEO Simon Litherland reiterated that Britvic is increasing its marketing spend “to support growth”.

“We’ve got some excellent marketing programmes not only in the second half, but some excellent platforms from which we can build. The brand momentum that we have is fantastic,” he said.

New growth spaces accelerating

Britvic’s brand portfolio has both large “family favourite” brands, consisting of the likes of Robinsons, and smaller brands representing “new growth spaces” for the business, such as plant-based juice and drinks brand Plenish.

The revenue for Britvic’s “new growth spaces” portfolio, which also includes the likes of London Essence and Aqua Libra, increased 63.5%. This growth was led by Plenish’s “truly outstanding” first half, with product and pack innovation – as well as enhanced distribution – helping increase revenues by 168.5%.

Litherland claimed these smaller brands are now positively showing up in the business’s overall topline growth.

In terms of Britvic’s more established brands, Pepsi delivered 8.5% revenue growth, while Robinsons had a “stable” performance versus last year.

“It’s [Robinsons] one of our key brands and it’s actually had a pretty good half,” said Litherland.

“We are starting to benefit from some of the work that we put in place last year in terms of the new brand look and feel, in terms of shelf layout, in terms of category growth drivers, working hard with our customers and that’s really starting to come through,” he added.

Britvic eyes return to volume growth in 2024

The second half of the fiscal year, which includes the summer period, is much bigger for the Robinsons brand. That “big” half will include the brand’s sponsorship of The Hundred cricket tournament, as well as a Super Splashdown competition for families to win tickets to waterparks.

Litherland said he believes in the potential of Robinsons’ sustainability story as a concentrate drink that provides many servings from one pack, indicating this concept is something the brand would tap into more.

As inflation increased Britvic, along with others in the FMCG category, was faced with driving growth against a tough consumer backdrop and the surging price of goods. Many companies leant on the increased pricing of their products to drive revenue growth. As inflation begins to ease, selling more has been the focus.

In November, the business described itself as being in a “transitionary phase” as it eyed a return to volume growth in 2024. Britvic successfully managed that in the first half, with the first quarter seeing a 1.7% volume increase and the second quarter driving “impressive” 7.4% growth.

“The past few years have been challenging for everyone,” Litherland commented. “It is extremely gratifying to see the benefit of our hard work starting to show up in material outperformance.”