AG Barr braving the cold: branching out into ice cream

Posted on 27 Mar 2012

Producers of the soft drinks Rubicon and IRN-BRU AG Barr have announced that they will expand into the ice cream market with an investment of £40m to lease a new factory in Milton Keynes.

The lease of a new facility in Milton Keynes comes after surprisingly positive profits for 2011, with AG Barr’s juice sales rising by 9.4% compared with 3.8% for the market as a whole.

The new factory is being leased rather than bought outright; this indicates the firm is exercising caution over announcing a number of new product lines, as a comment from AG Barr’s chief executive Roger White suggests: “Let’s see how the Rubicon products go first. We’ve signed a number of contracts with shops to stock the products and I’m really looking forward to seeing how they sell.”

The firm also invested in high specification machinery at their site in Cumbernauld; problems with the implementation of the machinery cost the company over £900,000 as it had to outsource its production to its other sites to keep up with demand.

The profit making performance of the company in 2011 has been put down to effective marketing. Mr White told the press that a marketing campaign employing England cricketer Graeme Swann as a brand ambassador had a positive effect on sales, while the quality of the drinks produced at the firm are at the top of their league.

Group turnover was up 6.6% to £237m, slightly ahead of the 6% growth target included in January’s pre-close trading update.

According to the local press, a raft of City analysts have welcomed the investment and highlighted the firm as a good target for investment.