Cost savings and product quality enhancements boost Suntory Beverages half-year results

Japanese beverage firm, Suntory Beverage & Food Limited said on Tuesday that half-year sales and profit for 2017 was lifted by focus on strengthening its brands and creating new demand as well as managing cost structure and product quality improvements.

The company which makes Lucozade and Ribena said that revenue for its non-alcoholic beverages and foods grew 1.7% in the half-year through end of June to ¥685.7bn yen ($6.2bn), from ¥674.4bn ($6.09bn) in the same period in 2016.

The soft drinks giant said that it aimed to create new demand in its home Japanese market by concentrating on products with high added value, resulting in sales volume surpassing previous year’s level.

Similarly in Europe, the company carried out proactive marketing for its key brands such as small format products like Orangina and Oasis in France, with sales surpassing those of the previous year. It noted that sales of the May Tea were strong.

However, sales in the U.K. were flat for its Lucozade brand, and declined year-on-year for Ribena. In Spain, its focus on the on-premise channel continued, and sales for Schweppes grew.

The company said it focused on building a business base for its products in Nigeria.

In Asia, the firm bolstered its key brands as well as sales and distribution systems in each country.

Oceania saw similar effort with expansion of sales for key brands.

In the Americas, the company set its attention on strengthening sales of its PepsiCo franchise in the State of North Carolina as well as growing the non-carbonated drinks segment. It noted that sales of water, black tea beverages, and coffee beverages were particularly strong.

Net profit for the half-year rose 7% to ¥52.7bn yen ($476m).

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