BW: How has AG Barr helped wholesalers grow sales in the past 12 months?
SS: Impulse is at the core of our business. We set out to offer the right range for the right customers at the right price, delivering category growth. That means offering competitive case prices and providing good margins, supported by strong pricemarked packs (PMPs) to deliver pull-through off the shelf.
We work with customers to understand objectively what sells best in their area.
BW: What is the greatest challenge the industry currently faces?
With the sugar levy due in April 2018, it’s easy to think that low- or no-sugar drinks will become the dominant sellers overnight. While they are driving growth, we believe the focus has to be on providing choice. Consumers will still want ‘regular’ soft drinks, which account for more than 70% of ‘drink now’ purchases in symbols and independents.
So, it’s important not to make knee-jerk reactions about range, but to acknowledge that tastes are changing and ensure your range reflects the changing needs of consumers.
BW: What trends and opportunities are emerging that customers can take advantage of?
Key elements to watch will be how stores adapt to the changing needs of the convenience shopper and the growth of tech. We’re seeing some great stores develop their food to go offering, and it’s vital for stores to understand their shoppers and what they want or need.
Most of us have ordered from Amazon or used some form of price-comparison site. It’s going to be fascinating to watch how technology affects wholesale in the next five years. Already we are seeing some interesting movements, such as the Big DL and the Bestway Apps, and the use of WhatsApp for Retail Club groups.
BW: What challenges has AG Barr overcome in the past year?
Most consumers want to see lower levels of sugar in soft drinks. But, they also tell us just how important taste is, without compromise.
We’ve responded positively, continuing a sugar-reduction programme that began several years ago. The good news is that more than 90% of our own soft drinks portfolio will have lower or no sugar by the autumn.
BW: What’s been AG Barr’s greatest achievement over the past year?
Rubicon Spring and Irn-Bru XTRA were game-changers for us. We’ve sold more than 9m bottles of Rubicon Spring in six months, showing that we understand consumer trends. It has also led to the creation of a new category that bridges the gap between carbonates and water. Irn-Bru XTRA was Scotland’s biggest soft drink launch last year and delivered a third of the category growth in Scotland. About 80% of drinkers are outside of core Irn-Bru, which means the launch has broadened the brand’s appeal.
BW: What advice would you give wholesalers looking to grow sales in soft drinks over the next 12 months?
National brands are important, and the core must-stock lines are critical to every wholesaler and their customers. But don’t ignore regional overlays. Growth will come from offering the right range of flavours, sugar-level variants and pack sizes.
Listen to your customers and their shoppers and don’t be afraid to support new products from a category that may not exist or be fully established yet.
BW: What would you like to see happening in wholesale in the next 12 months?
We will continue to work closely with all our wholesalers, building on our good relationships. Taking account of their feedback, as well as market data, trends and insights, we will put together strategies that work for the retailer and the shopper.