Strategy and Business Model
Our long term strategy is to build a sustainable international cider-led, multi-beverage business through a combination of organic growth and selective acquisitions.
The Medium-Term Strategic Goals For The Group Are:
Our core businesses are strongly cash generative. We therefore focus on cash. We critically review the value for money of all brand and capital investment. Our current emphasis is on investment at the customer interface, to drive revenue. Group management relentlessly drive to reduce costs - in production, distribution and marketing.
Revenue Generation and Earnings Growth
In our core markets of Ireland and Scotland, we seek revenue generation through a full-service multi-beverage portfolio model predominantly focused on brands and customers. In the rest of the UK and internationally we focus on volume growth.
We seek to make brand innovations at low cost and exploiting niche markets.
We seek earnings growth through revenue generation, cost control and margin improvement.
We engage with our workforce and incentivise them to ensure alignment with shareholders. Local management are incentivised with financial targets relevant to their local business unit. Where necessary, we are prepared to buy in expertise on a margin-sharing basis.
We seek local expansion in our core territories. Potential acquisitions must complement our business and meet our strategic objectives.
We are prepared to make larger transformational acquisitions, and we are ready to seize opportunities as they arise. The strength of our balance sheet and experience at integrating businesses minimises execution risk.
We will make disposals where they will enhance shareholder value.
In the absence of capital investment opportunities we will return surplus cash to our shareholders.
Throughout the Group we seek to operate compliantly with the law and as good corporate citizens.
How We Are Connected
C&C has five business segments, which comprise:
REPUBLIC OF IRELAND
The Bulmers sales and marketing team has now been integrated into the Gleeson wholesaling and distribution business to create a major new player in the Irish market offering an enhanced portfolio of long alcoholic drinks, soft drinks and water. The Irish manufacturing plants are located in Clonmel and Borrisoleigh in Co. Tipperary.
CIDER - UK
This segment covers the sale of cider brands in Great Britain and Northern Ireland. The volumes of cider sold by the Group in the UK make our UK cider business a key focus for management. The Shepton Mallet Cider Mill division, based in our cider mill in Somerset, exploits the catalogue of brands acquired with the Gaymers business in 2010 and acts as a nursery for innovation in cider. Marketing and sales execution of the division has been outsourced to Green Light Brands Ltd, a specialist team experienced in rejuvenating historical brands.
TENNENT’S - UK
The Tennent’s beer business is headquartered at Wellpark Brewery, Glasgow and operates in Scotland and Northern Ireland. Profits of the business have been increased from €3.7m when it was acquired in 2009 to €34.6m in FY2014. This has been achieved through brand investment, cost control and improved trading terms. Our brands portfolio, which is centred on the iconic Scottish brand Tennent’s, has been expanded with the introduction of Caledonia Best and Heverlee, and niche Tennent’s products.
During FY2015 the Tennent’s UK sales and marketing team will be integrated into Wallaces Express, the Scottish wholesale business, of which the Group acquired full control in March 2014.
THIRD PARTY BRANDS - UK
This business segment comprises two divisions: agency brands and private label.
The principal agency brands sold in the UK by the Group are the AB InBev brands, which the Group distributes in Northern Ireland and Scotland.
In addition the segment includes IWS International Wine Services, which handles the former Waverley portfolio of wines and spirits brands. Sales and marketing is outsourced to Monuriki Ltd, a specialist wine-marketing team.
The private label contract production division manufactures cider and beer at Wellpark and Shepton Mallet for a range of customers, including the major supermarkets and other contract brewers.
The international division now comprises two main elements: Vermont Hard Cider Company, LLC (VHCC) in the US and the international beer and cider business.
VHCC manufacturers the Woodchuck, Wyder’s and Hornsby’s brands at its cidery in Middlebury, Vermont, which it distributes in the USA alongside Magners, Tennent’s and other C&C brands.
Outside the US, the Group operates through distributors, notably in continental Europe and Australia, with Magners being the principal product.