Nichols ceo keen on acquisitions

By Anne Bruce

- Last updated on GMT

Related tags: Soft drink

Nichols has inked a licensing deal with Levi Roots, whose Reggae Reggae brand is worth a cool £40-50m
Nichols has inked a licensing deal with Levi Roots, whose Reggae Reggae brand is worth a cool £40-50m
Nichols chief executive Brendan Hynes has revealed to that the Meryseyside-based drinks giant is on the acquisition trail, after it reported a 23% rise in pre-tax profit to £15.1m for 2010.

Hynes said that the Newton Le Willows firm, which also revealed a 2010 turnover of £83.9m for the year ending December 31 2010, was in a strong position to expand its portfolio: “We have a strong balance sheet so we are in a good position to grow,”​ he said.

"We have had lots of discussions but nothing on the front burner at the moment. We are interested in premium branded businesses, not own label, in all the categories we operate in from carbonates to squashes.”

Reggae range set to shuffle

Nichols announced today that it has signed a licensing deal with Levi Roots, the cook behind the Reggae Reggae brand, to launch a Caribbean soft drink range to retailers from April 2011.

Hynes said: “The Reggae Reggae brand has been a big success, it is worth £40-£50m now. World food is also a growing market sector.

“We have been working with Levi to develop the range including orange and pomegranate, ginger beer and mango flavours. Some will work, some may not. It will be rolled out internationally if successful; Levi is starting to look overseas.”

He added that further favour variants of key Nichols brands are under development and due to appear within the next couple of years, following the launch of Cherry Vimto last year.

International growth plans

Hynes also revealed that Nichols plans to grow its business internationally. It already operates in 65 countries worldwide and was planning to develop its business in South Africa, Northern Europe and the Hispanic countries of the Americas.

Nichols beat the recent economic downturn by outsourcing production to co-bottlers such as Princes and Cott, Hynes said, which enabled economies of scale and also benefited these firms.

He added that short-term consumer trends are moving towards value products, which means the dilute beverage category is performing well; in the longer term health and well-being are the big trends that interest Nichols.

UK soft drink sales up

Whilst the UK soft drinks market grew by +7% (Nielsen, year to 25 December 2010), Nichols said that sales increased by +17%, buoyed by the launch of Cherry Vimto, which delivered incremental sales of £3.7m.

International revenues increased by +24% to £15.4m, with significant growth coming from Africa (+56%) and the Middle East (+13%). Sales of soft drinks on dispense were up 8%, largely due to Nichols’ acquisition of the Ben Shaws dispense business in January 2010.

Related topics: Drinks

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