Drinks group C&C says its new strategy will centre on becoming the “pre-eminent” distributor of drinks brands to other companies, while it also plans major investment in Britain in its “sleeping giant” cider brand, Magners.
The Bulmers cidermaker laid out details of its post-Covid recovery strategy at a capital markets day on Tuesday afternoon, following the announcement of its annual results. It reported an increase of 88 per cent in revenue to more than €1.4 billion, and operating profits of €47.9 million, for the 12 months to the end of February.
David Forde, C&C's chief executive, said the focus of governments in Ireland and Britain on regulating the marketing of alcoholic drinks presents an opportunity for C&C's brand distribution platform, which includes its merged Matthew Clark and Bibendum divisions.
He told investors that when politicians intervene to control pricing and advertising, the importance of having good distribution increases. He said that in future, regulators also would not allow a multitude of delivery trucks to “trundle through the village” every morning to bring drinks to pubs, and so the market needs a “consolidator” that aims to be a “one-stop-shop” drinks distributor.
Mr Forde said good distribution is a “rare commodity” – some providers such as Britvic’s Counterpoint have left the Irish market. C&C plans to focus on growth in this side of its business and Mr Forde said its client base already was up 8 per cent since the start of the year. He cited recent client wins including the Virgin hotels chain, wine and spirits for the Brew Dog chain, and wine for the Alchemist bar and restaurant group.
Mr Forde, who joined C&C from Heineken at the height of the pandemic in November 2020, said the period since has been the "toughest" of his career but C&C's finances are now improving and its on-trade customer base is in recovery mode. Off sales, which had been elevated by pandemic lockdowns, fell 3.4 per cent in the year to the end of February.
Lucy Henderson, C&C's marketing director for Britain, said the company has for several years "underinvested" in the cider category in Britain, where its owns Magners (which is sold in Ireland as Bulmers). "We have let the competition takes strides ahead of us while we were sleeping," she said.
Up to 40 per cent of the group’s British marketing budget this year will be spent on Magners, she said, as C&C looks to “reinvigorate” the brand. She said the group would look at launching Magners Light in Britain next year, while it is also looking at new flavours for the cider.
C&C also announced it is selling its stake in pub group Admiral Taverns for about £55 million. It is also planning more price increases, after pushing through a 3.5 per cent increase last November.