GlaxoSmithKline is to drench its cold drinks brands with a £100m investment this year.
The giant spend, up from £79m last year, will be ploughed into its Ribena and Lucozade propositions and will include funding for new products.
Plans for product launches are being kept under wraps, but it is understood that limited
edition variants under both banners are likely to feature, all of which could end up becoming permanent fixtures if they score a hit with consumers.
However, analysts have warned GSK could struggle to make a return on its investment because the spend is more than a quarter of the brands’ total current sales value. According to the company, sales of Lucozade Energy, Lucozade Sport and Ribena totalled £361m across all channels last year (ACNielsen MAT to December 27, 2003).
One analyst said: “These are big brands but £100m as a percentage of the existing sales is a hell of a lot of money. GSK will need to make sure it sees a decent return on its investment.”
GSK spokeswoman Alice Hunt said the company was confident it would gain positive results from the investment.
Ribena will receive £40m of the company’s marketing budget; Lucozade Energy will receive £30m, while Lucozade Sport, which enjoys the presence of rugby star Jonny Wilkinson as brand ambassador, will get £30m across its standard and Hydro Active variants.
“We have worked out what the return will be on this investment and are confident it is worthwhile,” said Hunt. “There will be a jam-packed agenda this year, including product launches, and £100m is a demonstration of our confidence in what our brands can achieve.”
Simon Mowbray