For the last year AG Barr management has repeatedly declared that it is consumers and not government that determines its product strategy.
The fact that Irn-Bru Xtra - a drink described as “full of extra taste” but with no sugar, which landed in the second half of last year - has helped the group grow first half sales by eight per cent, indicates that shoppers are increasingly in the market for products with reduced sugar content.
So while consumer demand will continue to shape the products launched or acquired by the business, the UK Government’s sugar tax does seem to have played a part.
AG Barr made headlines in March when it announced that 90 per cent of its company-owned brands (so excluding the Rockstar energy drink which it distributes in the UK) will contain less than five grammes of total sugars per 100 millilitres by the autumn.
Chief executive Roger White said yesterday that this plan was making “good progress”.
The reason the announcement made headlines is because it means standard Irn-Bru, which is undoubtedly one of Scotland’s most iconic food and drinks products, will see its sugar levels cut from 10.3 grammes per 100 millilitres to five grammes through a reformulation.
The product may not be subject to the levy, but there is risk inherent in changing the recipe of your best-known product. Mr White has said the new recipe is “a really good match”.
And although he would not be drawn on whether sales of Irn-Bru Xtra – or indeed Irn-Bru Sugar Free – would cannibalise sales of the standard product, he said “our expectation is that the Irn-Bru brand in total will consistently grow”.
Investors seem to agree. The group’s share price has climbed 21 per cent this year, making it one of the best performing Scottish businesses on the market.
Like the slogan almost says, Irn-Bru continues to get AG Barr through.
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