Irn-Bru manufacturer AG Barr has sold its Strathmore brand and acquired a majority holding in Innate-Essence, a company in the functional shots and other health drinks market.
AG Barr has paid an initial £15 million for a 50.1% stake in Innate-Essence which is the home of The Turmeric Co, providing the UK’s only clinically-proven raw turmeric shots.
Functional shots are carving out a strong place in the beverage market, gaining popularity for their ability to deliver a quick energy boost or tackle issues such as immunity and digestion. In 2024 the market was valued at $2.1 billion, and it is forecast to grow to $3.5 billion by 2031.
Innate-Essence was founded by former Wales international and Premier League footballer, Thomas Hal Robson-Kanu. He was inspired to launch the business after finding turmeric shots invaluable in recovering from a potentially career-ending knee injury.
Growth to date has been underpinned by monthly recurring subscriptions, nationwide launches in Sainsbury’s and Ocado, UK-wide placement in David Lloyd Clubs and strategic partnerships with Premier League football teams such as Everton and Brentford, Premiership rugby teams Sale Sharks and Leicester Tigers, and British Gymnastics.
Cumbernauld-based Barr said the deal is consistent with the company’s strategy of acquisitions and innovation in high growth, health-focused, functional beverage categories.
The investment has been funded from the company’s net cash position. It is not expected to have a significant impact on revenue or profit in the current financial year.
Innate-Essence founder and CEO, Thomas Hal Robson-Kanu, said: “I created the brand as a convenient and great-tasting way to support wellness-conscious individuals and sportspeople like me.
“We’ve had a remarkable few years but with this latest milestone and such heavyweight backing, it feels like our journey is just beginning – we’ve unlocked a new level. The international potential is huge, and we can’t wait to see what we achieve next.”
BDO and Pinsent Masons advised Innate-Essence.
AG Barr has also concluded the sale of the Strathmore brand and the Forfar production site to Welsh company T? Nant. This will negatively impact revenue in the short-term, but not profit.
T? Nant is a mineral water brand bottled at source in Bethania, Ceredigion. No further details were disclosed.
Barr announced the deals in a trading update for the 26 weeks ended 26 July which showed first half revenue is expected to be c.£228m, c.3% up on the prior year (H1 2024/25: £221.3m).
Overall, the company’s trading momentum increased as H1 progressed, with several record volume weeks in Q2.
Brand revenue performance was led by Boost which delivered strong double-digit growth. Irn-Bru and Rubicon were flat in H1, with a stronger performance in Q2. Funkin saw continued off-trade growth partly mitigating challenges in on-trade, with the overall trend improving during H1 and positive in Q2.
H1 adjusted operating margin is anticipated to be ahead of last year at c.15.0% (H1 2024/25: 13.0%) driven by improved manufacturing efficiencies, on-going benefits from our strategic business improvement initiatives and continued disciplined cost management.
Revenue and profit growth expectations for the full year are unchanged.
Euan Sutherland, chief executive, said: “We are pleased to report continued revenue growth and strong profit growth in the first half of the financial year.
“Trading improved during H1 and we enter H2 with strong momentum and continued progress on margin improvement as our strategic initiatives continue to deliver.
“I am also excited about our expansion into the functional beverage segment working alongside Thomas Robson-Kanu and the Innate-Essence team. Our full year guidance remains unchanged and in line with market expectations.”
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