FDBusiness.com

Britvic has reached agreement with PepsiCo for a new and exclusive 20-year franchise bottling agreement for the production, distribution, marketing and sales of its carbonated soft drink brands – including Pepsi, 7UP and Mountain Dew – in Great Britain. The new agreement extends the relationship, which commenced in 1987, to 31 December 2040 and includes the Rockstar energy brand, for which Britvic will take responsibility from 1 November this year.

Britvic has also announced its intent for all plastic bottles in GB to be made from 100% recycled plastic (rPET) by the end of 2022 – three years earlier than originally planned, and ahead of the previous target of 50%. This will cover the entire GB portfolio of Britvic-owned and PepsiCo brands, and demonstrates both companies’ commitment to sustainability and to a healthier planet.

Simon Litherland, Chief Executive of Britvic, comments: “I am delighted that we have formally extended our relationship with PepsiCo in Great Britain for a further 20 years. The powerful combination of the Britvic-owned and PepsiCo portfolio offers customers and consumers a broad range of great-tasting, trusted brands for any occasion. We are excited to add Rockstar to our offering and look forward to working together to grow the brand.

“The announcement of our intent to move to 100% recycled PET in GB by 2022 is a significant moment for Britvic and our partnership with PepsiCo, demonstrating our joint commitment to protecting the planet today and for future generations. Both Britvic and PepsiCo have sustainability at the heart of their business strategies, and we will continue to work together to deliver on our shared ambition to protect the environment and offer healthier choices in the years ahead.”

Silviu Popovici, CEO PepsiCo Europe, says: “We are very pleased to announce this new and enhanced exclusive bottling appointment with Britvic in Great Britain, as well as further strengthening our portfolio with the exciting addition of Rockstar. This decision was based on our history of sustained strong performance in the market, backed by Britvic’s ongoing commitment to significantly invest behind our brands.

“More importantly, our shared values have led to sustainability forming an integral part of this new agreement, which includes our latest mutual commitment to ensure that all of our bottles are made from 100% recycled PET by the end of 2022. This is in support of PepsiCo & Britvic’s vision of creating a circular economy on plastic and building a world where plastics need never become waste. We very much look forward to the next chapter of our strengthened relationship with Britvic.”

Trading Update and Outlook

Following better than expected trading across the peak summer period, Britvic’s adjusted EBIT for the full year 2020 is anticipated to be slightly ahead of current market consensus. Trading has benefited from both the limited re-opening of the UK hospitality sector since early July and continued strong trading in the at-home channel across its markets. The year-end adjusted net debt balance is expected to be approximately £40 million to £50 million lower than last year, reflecting disciplined cash management.

Looking forward, the economic outlook for 2021 remains uncertain. The re-introduction of further lockdown restrictions and the impact of social distancing measures on capacity in the hospitality sector will, undoubtedly, continue to have an impact on Britvic’s performance in 2021. However, Britvic is confident in its long-term prospects and anticipates rebuilding investment in 2021 behind its long-term growth drivers, including innovation and marketing, as well as its commitment to sustainability through its strategic priority of “Healthier People, Healthier Planet”. Britvic is well-positioned to lead the long-term recovery of the category with a portfolio of market-leading, trusted brands, a track record of operational agility and a dedicated and committed team.

Further detail will be communicated in the Preliminary results announcement on the 26 November 2020.