Introducing my Firm - My reflections and thoughts

As outlined on my blog Where did the time go? I learnt that my company was not australian which I was sad about and anxious because I know the financial statements will confuse me even more than if they were Australian. However after reading the annual reports I am not quite so concerned about writing about them however the financial statements still scare the hell out of me! I did learn very early that Britvic works in conjunction with PepsiCo and provides/sells many famous drinks known as Pepsi, 7Up, SoRe and Mountain Dew. I also learnt that production and sale of these branded products are under an exclusive agreement with PepsiCo. While I read the website I discovered that Britvic’s goal outlined on their website is “to become the most dynamic and admired soft drinks company in the world” As I said on my blog I still think this is quite an impressive goal in this competitive world and quite a mission when sugar is becoming the enemy.

“Our purpose is to make life’s everyday moments more enjoyable. We offer a wide range of soft drinks to meet the many and varied needs of our consumers; at home or out and about, there is a

great tasting, high quality Britvic brand for every occasion.”

After reading (and getting a little lost) I have discovered that in a nutshell Britvic is a groundbreaking soft drink company that’s vision is “Making life’s everyday moment’s more enjoyable”. I learnt that Britvic is currently the lead of the market in Great Brittan for no added soft drinks which to be honest was great to read after my initial thoughts on “soft drink is bad for you”. It was also brought to my attention early on in my investigations that many people have a different perspective on soft drink and use it for different reasons. A fellow class member (see blog comment from Cheryl Haupt - March 19, 2017 at 4:31 am ) let me know that even a healthy person can love a nice cold drink of soft drink for various reason and to not focus on “sugar is bad for you” I really took this on board and looked into the Health and Nutrition tab on the website (http://www.britvic.com/health-and-nutrition/our-approach-to-nutrition) as this was less detailed than the annual report and it summarised that Britvic recognised the fact that they are facing the challenge of being a well-known soft drink company which of course has sugar and to combat tis they have a long term strategy in place to offer a wide choice of soft drinks including low calorie, low in sugar and even no added sugar varieties. In the past twelve months alone they have re-launched 3 new premium low calorie flavours in the K.Whites range. I also found out the answer to one of my initial questions in my “where did the time go” blog quite early in my investigation of Britvic which was “does this company really make a profit on something that is being deemed as dangerous and unhealthy in this day and age?” They sure do! A 6.5% profit to be exact. This identifies that the strategy put in place in the 2013 annual report to improve and take steps to make healthier choices available to consumers and “drive growth in kids, family and adult soft drinks” is successful as this is the third year of increasing profits.

Britvic identified that they have 5 geographic business units - Great Britain, France, Ireland, International, and Brazil. Each business unit is reported on separately (which freaks me out when I think of the next assignment ARGH!!). Great Britain is the lead of all five business units in regards to the volume produced, revenue made and brand contribution. Each business unit works under the same 4 strategies of:

1. Generate profitable growth in core markets (Increase)2. Realise global opportunities in kids, families and adults (Deliver)3. Continue to step change our business capabilities (Ensure)4. Build trust and respect in the community (Act)

One thing that really interested me was Martin’s advice to review how many of the board members had a background in finance and accounting. While only two of the board members are “qualified accountants” 6 of the 29 had a history in finance. It was also a real eye opener for me finding out that 78% of the board members are male! Wowsers! The other thing that I was interested in (as I am a long term employee for my employer) was that 45% of board members have been with the company over 3 years, 22 % has been with the company has been there from 1-3 years and 33% have been with the company for less than one year. I can’t help but wonder that the stability in long term board members is linked to the success of the 2013 strategy providing an annual increase in profit.

As outlined in my earlier posts I thought the biggest challenge would be trying to sell a sugar filled softdrink in a healthy world however Britvic identified that there are any more challenges that they are faced with. Britvic have identified in the soft drink world is that consumer attitudes are changing and consumers are becoming more aware of health and wellbeing. Consumers are no longer only focused on pretty packaging they actually want to know the ingredients of the soft drink and if they do choose to have a soft drink they have a desire to have a high quality experience which results in a feeling of refreshment, hydration and additional functional benefits eg: fat burning, and/or high protein options. It was also identified that the growing debate on sugar vs natural sweetener vs artificial sweetener is having an impact on their new products and ingredients which is why the strategy was introduced in 2013 to help combat this debate. My question here is “will they continually change their ingredients for their products to help combat these challenges and in the end lose the high quality taste that they offer?”

A shocking figure that I cannot stop thinking about is that Britvic sold over 2.3 billion litres of soft drink in 2016…. O.M.G! By reading their annual reports though I can see that they are trying their best to maintain their quality but also met legislative requirements which entail sugar as they have removed a further 19 calories to assist consumers to make a healthier choice. Some other challengers that I read about were that Britvic has to be one step ahead of the consumer preference and trying to anticipate changes in the consumer’s tastes and behaviours. There is also the concern which I touched on a little bit before which was failing to address government and consumer health concerns in regards to natural and artificial sweeteners and preservatives to assist in the health and wellbeing of consumers and avoiding obesity concerns. Britvic also identified that the retailer landscape is constantly changing in this fast world and they are working around the clock to ensure that their relationship with their customers is still intact and they are able to compete with good presentation and making sure that their products are available. Britvic is also regularly working with PepsiCo in Great Britain and Ireland to continue to increase the strength with their partners, distributors and franchisees to grow the bran in the current core market. As the annual reports are extremely detailed it was also identified that the remaining six challengers included international expansion, supply chains, safe and high quality products, legal and regulatory laws, technology and information security and treasury and pension. To be honest there were a lot more challenges than I envisaged and I struggled a little bit to understand all of them and put them into context of everyday life.

I have included a snippet from the 2016 Annual Report to give you an idea on the range of products that Britvic has.

Britvic in the media:

I struggled with this part of the assignment. I’m not sure if it was because I couldn’t find anything that seemed worthy or I was simply not looking in the right place but I did manage to locate the following article that seemed to confirm the success of the strategy that Britvic put in place in 2013 to reduce sugar in their drinks but still provide the same great taste. Britvic has been working hard to combat the challenge of reducing sugar to avoid paying large amounts of sugar tax that was introduced and even though they had a failed reformulation of the Robinson brand they were still able to gain profit this year. One statement that Britvic did include in the article was that “Britvic believes in offering choice, while making it easier for consumers to reduce their calorific intake without compromising quality. We are disappointed at the introduction of category specific taxes, since we believe a holistic approach is necessary to tackle this complex issue”. I can see what they are saying in the fact that it’s not just soft drink and fruit juices that are causing the issues in today’s world of cancers and obesity however I still can’t help but feel that the government feels that they must do something to try and assist in this well known issue and the one way for them to try and curb peoples actions of purchasing the drink is to make it harder for companies like Britvic to produce it and more expensive for the consumers to purchase it. You can see the full article from 30 November 2016 here: http://www.telegraph.co.uk/business/2016/11/30/sugar-free-fizzy-drinks-drive-britvic-sales-higher/

It was highlighted in the January’s quarterly review that Britvic’s children’s range named “Fruit Shoot” has dragged the Great Britain stills category down by 4% in sales. To counteract this Britvic have launched their multi-market campaign “It’s my thing” aimed at parents to let kids be kids and

to stay hydrated doing their activities by drinking Fruit shoots. Britvic identified that their research showed that society has that societal pressures are "limiting children's ability to express themselves and preventing them from finding the thing they really love". I can’t help but think of one of my initial thought which was “it must be a mission when sugar is becoming the enemy and let’s be honest that pretty much all soft drink is” and now I can add fruit juice to this statement as well. I guess one thing I am learning through this assessment yes Britvic faces this challenge and criticism on a daily basis but they are at least trying to work with the new regulations and sugar tax by offering different choices in their beverages so the consumer can make the conscious decision on whether they want sugar or not. I have included the you tube link to the new campaign (https://www.youtube.com/watch?v=Pc7KZaIPkyA) as well as the original news article http://www.just-drinks.com/news/britvic-launches-fruit-shoot-ad-to-reach-pragmatic-parents-video_id122563.aspx

Financial StatementsWhat do I understand?What don’t I understand?

Blog 1 Discussions and comparisons- Why I chose this Blog- Opinion- Supported reasons- Evidence- Link-

Blog 2 Discussions and comparisons- Why I chose this Blog- Opinion- Supported reasons- Evidence- Link

Blog 3 Discussions and comparisons- Why I chose this Blog- Opinion- Supported reasons- Evidence- Link

Brief Discussion on Facebook re: initial KCQ’s: