Vimto CEO sees purple gold for soft drink's future

Great leaders see opportunities for growth where others cannot. When Vimto owner Nichols appointed Marnie Millard as chief executive officer in 2013, having worked in soft drinks for some time, she was bemused to find that a few people in the company believed certain areas of Nichols had reached their peak. Millard, however, saw purple gold and was ready to dig with determined precision to exploit it.

For those who do not know of or understand Vimto – and some will not – it is a northern classic, founded in Manchester in 1908. Like many northerners, Millard’s first taste of Vimto goes back to the ‘pop man’. These men, and they were mostly men, drove open-sided vans through residential streets with their cargo of glass bottles filled with fizzy drinks, making a distinctive jingle as they drove down the road.

But changing consumerism soon made the pop man redundant, and it will now be by rare chance only that children are able to buy the likes of cream soda, cherry cola, lemonade and – in the north – Vimto from a van.

Yet, the demise of the pop man some years ago and the subsequent rise of supermarkets, along with new purchasing habits, made it possible for Millard to seize the opportunity to manoeuvre Nichols and its brands into a stronger position.

Vimto is still mostly consumed in the north, but sales are rising further south, as the CEO explains in her sleek office situated at the company’s Merseyside-based headquarters: “If you look at packaged, where we’re measuring through Nielson, our market share in the north is 27%, so it’s bigger than canned Coke.

“When we start moving down to the Midlands, then it’s a healthy 9-10%, but as we surge south, at best, we’re 4.8-5% (Nielsen Value Sales MAT 17 July 2017).”

The healthy uptick in sales in the Midlands was not always the case, however. “We did a massive distribution drive in the Midlands, which wasn’t just in our grocery business but also in our out-of-home business because this is a great way of getting products into consumers’ hands,” Millard explains.

‘Approve our position in the south’​

“From this we have moved our market share in the Midlands up and have held it for two years and it’s part of our long-term agenda to improve our position in the south.”

Millard is keen to maintain the company’s position as the UK’s third largest dispensed soft drinks supplier behind Coca-Cola and Britvic. She is now bolstering Nichols’s position in the market, with full-year results, released at the start of this year, showing UK sales up 6.9% to £90.7m to the end of 2016. The positive figures were driven by increasing sales of Vimto, which were up 5% compared with 2015.

Now, for those doubters: “I remember the first time I sat down with the senior management team,” she says. “We had two days off-site to start formulating our strategy and, at that point, I think our brand value on Vimto was circa £54m and it was believed we couldn’t grow much more than that.

“I said we’ve got fizzy, still and squash, and I was looking at Irn Brew at that point and their brand value was £120m and they had two fizzy products.”

Following a series of new products, such as Vimto’s Remix – a still, fruity variant of the main Vimto flavour – and other brand promotions, Vimto’s brand value has now increased to over £75m.

“When you look at our Vimto Remix, it’s been the single best piece of innovation other than inventing the product in 1908 and, at the moment, I get a lot of pleasure out of that and I can drive it,” adds Millard.

Though a big part of Nichols’s past and, indeed future, is based around the company’s legacy brand Vimto, Millard has many other strings to her bow that she hopes will seed continued growth.

In 2015, the company acquired the no-added sugar brand of soft drinks Feel Good, reformulated it and pushed it into the on and off-trade as a healthier premium soft drink. In the same year, Nichols bought a £6.6m (49%) steak in The Noisy Drinks Co, before fully buying the Essex-based slush and milk drinks dispensing firm outright a year later.

Such acquisitions have expanded Millard’s power to place more of the company’s portfolio into new outlets. The buyout of Noisy Drinks gave the CEO foundations to use the company’s existing relationships and name to spread other products into businesses it did not previously have relationships with.

‘Opens up a huge opportunity’​

“Now we have Noisy we’re able to look at potential customers on a national level and that opens up a huge opportunity,” says Millard.

“In July last year, we were installing 35% more slush machines than Noisy had and that’s not because they didn’t want to do it, but because if you’re in a private business and you don’t want to go into debt then you can’t [expand as far]. We opened in Hungry Horse, Greene King and lots of other places.

“We’re right at the start of our [Noisy Drinks] journey and there’s nobody else in the market with scale, because when you’re installing equipment, you need the capital.

“We’ve got £40m sitting [in the bank] and we’re in a nice place,” she says. “As long as there’s a good return [on investment], if a big operator came and said to us we want 1,000 machines of dispense and 500 slushes, then as long as the business plan works, that’s not an issue for us.”

Dispense, too, is of massive importance to Nichols – 2015 was a big year for Millard and Nichols when, along with buying a new drinks brand and investing in Noisy Drinks, a deal was struck with Coca-Cola European Partners making Nichols the largest independent supplier of dispensed soft drinks in the UK.

The deal, which allows Nichols to install post-mix units on behalf of Coke and distribute its products, also saw Coca-Cola joining brands including Vimto, Irn Bru and Sunkist – in addition to Nichols’ own-brand dispense range – on the bar together.

The deal came about because “our service reputation and quality of serve is the best in the market”, claims Millard. “We’re very precious about that and that’s the key reason why we were able to take the Coke licence on board – it’s the only kind of agreement in the world.”

Millard’s ability to spot opportunity where other are not able to has propelled Nichols into the spotlight. The company’s portfolio is now in more pubs than ever and it is expected to grow further still in the coming years.