Irn-Bru maker moves into ice cream

Irn Bru bottlesIrn-Bru maker AG Barr has moved into the ice cream market for the first time with a new range of tropical flavours under its Rubicon brand.

The group has started selling mango, passion fruit and lychee flavoured ice cream tubs and push-up lollies under ambitious plans to grow the tropical drink label, which uses England cricketer Graeme Swann as a brand ambassador.
The Cumbernauld-based group reported a 6.2% rise in pre-tax profits to £33.6 million in the year to January 28 helped by strong sales of its tropical brands Rubicon and KA.

And it announced further details of plans to open a new factory in the UK, with a £40 million plant in Milton Keynes unveiled as the chosen site, which will create up to 100 jobs after it opens in the summer of 2013.

A spokesman for the group said the move into the frozen market was designed to tap into a growing demand for more exotic ice cream flavours. The group said: "We believe this will further support the long-term development of the brand by delivering a new way for consumers to enjoy the delicious exotic flavours and taste of the Rubicon brand."

Barr previously said it planned to open a new site in the south of England to cater for its growth, but this is the first time it has announced a location. It said it is in the final stages of discussions for the production and warehouse facility, which will add "substantial future capacity".

It last year closed its site in Mansfield as it expanded capacity at its main site in Cumbernauld, which is now operating in line with expectations following production difficulties over the summer.

The group, whose brands also include Tizer and St Clements juice, described its overall performance in the past year as excellent, given the poor summer weather and the increasing number of promotions from competitors.

Revenues rose 6.6% to £237 million, and are now up 27.6% over the past three years, with revenues of its tropical flavours KA and Rubicon up 15.7%. This helped it outperform the buoyant soft drinks market, which has held up well despite the economic gloom because it is seen as an affordable treat. Sales of its Jamaica-inspired KA range grew by two-thirds after it launched still flavours in addition to its fizzy ranges.

Its gross margins were squeezed in the year as it battled rising sugar, fruit pulp and plastic costs. It expects to deal with further price hikes this year, while it expects household incomes to remain under pressure.
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