AG Barr to continue brand investment despite facing 'operational challenges'

IRN-BRU maker A.G.Barr has said that it will continued to invest in its brands despite having faced ‘a number of operational challenges’ in recent times.

A first half of year update by the company revealed that increased promotions had increased its volume within the soft drinks sector by 1% and its value by 6%, and that its total sales revenue was around £123m for 2011 so far (an increase of 3.5%).

The company also admitted that the soft drinks market had performed ‘particularly poorly’ in June, with volume declining by 9%, and value falling by 3% due to poor weather and ‘difficult’ trading.

Despite this, the statement claimed that the company had ‘performed well’ in July.

“We are pleased to have matched the market volume growth figures without responding to the significant increase in competitor price promotion activity in the period,” said the statement.

The company also admitted to having faced some ‘operational challenges’ relating to the late delivery of its manufacturing investment at its plant in Cumbernauld, but added that the first installation activities would be completed in the next few weeks, with ‘a gradual improvement in production’ expected in the coming months.

The £2.5m sales of the company’s site in Atherton is also expected to be completed by August.

A.G. Barr also said that the drinks market remained in growth and that it would maintain investment in long-term brand equity, having also offset the ‘significant’ rise in the cost of raw materials.

“With recent operational challenges behind us, we look forward to the second half with cautious optimism and the full year remains on track to meet our expectations,” the statement concluded.

Earlier this week, the company launched a marketing campaign to promote its BRU-JET competition through IRN-BRU.

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