Main growth overseas for Nichols’ drinks

By Rod Addy

- Last updated on GMT

Related tags Middle east

Overseas sales offered the biggest short-term growth for soft drinks firm Nichols, because of the state of the UK market, according to group chief...

Overseas sales offered the biggest short-term growth for soft drinks firm Nichols, because of the state of the UK market, according to group chief executive Brendan Hynes.

In particular, the company was in the process of securing opportunities for its fruit cordial brand Vimto in China, said Hynes, commenting on strong interim sales and profit figures up to June 30. “The future of the business lies in our international reach, which has big untapped potential. We’re putting together a joint venture in China using two local partners.”

He expected the initiative to come to fruition within the next 18 months and said Turkey was another area of interest for the business.

The bulk of the company’s growth was coming from overseas markets such as the Middle East and Africa, he said, citing sales growth in the Middle East of 20% plus. That contrasted with growth in the overall UK soft drinks market of just 3%. He described such international markets as “a good natural hedge to the bad news that’s coming out of the UK”

That said, interim UK sales growth of 8% for Nichols was still ahead of the market, driven by Vimto and “more than double digit growth” in ready-to-drink, sports cap beverages, said Hynes.

He admitted that Nichols’ fizzy Panda brand had been hit by parents’ perceptions that the kids’ carbonates category was unhealthy for their children’s packed lunches. However, he stressed that the company was committed to the brand and was in the process of converting it into still- and water-based products. “We will continue to reposition it as a natural, still product, but while we are doing that we will continue to see volume declines.”

The Panda brand had also been negatively affected by supermarkets’ moves away from single bottle sales towards multipacks, said Hynes.

Nichols posted interim sales of £29.2M, up 5% on the same period last year, with pre-tax profit up 15.5% to £3.2M.

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