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At Dr Pepper Snapple Group, fun, flavor and
innovation combine to create our formula for growth.
Wayne R. Sanders
Chairman of the Board
Larry D. Young
President &
Chief Executive Officer
To Our Stockholders
STOCKHOLDER LETTER
At Dr Pepper Snapple Group, we are known for our flavors. The 50-plus brands in our unmatched portfolio set us
apart from our peers, providing the variety our customers and consumers want and the great taste and refreshment
they enjoy. It’s our winning flavors, along with fun and innovation, that combine to create our one-of-a-kind formula
for growth.
This formula proved successful in 2012 as we outperformed the carbonated soft drink (CSD) category, growing
dollar share for CSDs despite a backdrop of an uncertain economic environment and cautious consumer spending.
To ensure our brands were close at hand and top of mind for our consumers, we closed distribution gaps and
increased all-commodity volume (ACV), placing more of our products into stores and gaining incremental shelf space.
We grew ACV on our core brands and packages across CSDs, teas and juices in grocery, with CSDs up 0.5
percentage points, Mott’s up 1.8 percentage points and tea up 4.3 percentage points. And with carefully crafted
promotions designed to drive on-the-go shoppers into stores, we increased ACV in the convenience channel by
0.2 percentage points for CSDs and 6.7 points for Snapple 16-oz. glass.
We’re proud that 13 of our 14 leading brands hold the No. 1 or No. 2 position in their flavor category. Even so, many
of our brands have considerable runway for growth outside their heartland areas, so we’ve continued our efforts to
expand consumption of key brands with new and existing consumers in targeted markets. Per-capita consumption
of Snapple, long a stronghold on the coasts, grew in targeted markets by 0.7 servings per person. In our targeted
markets for Canada Dry, we grew volume share of ginger ale by 2.2 percentage points.
As we approach our fifth anniversary as a public company, our cash flow remains strong and consistent. We returned
approximately $684 million to shareholders in 2012, with $400 million in share repurchases and $284 million in
dividends. More recently, we announced a 12 percent increase to our dividend, our fifth increase since going public
and a further demonstration of our commitment to return excess free cash to our shareholders over time.
฀ •฀We฀grew฀Dr฀Pepper฀dollar฀share฀for฀the฀fifth฀consecutive฀year,฀up฀0.2฀points.฀
฀ •฀Based฀on฀positive฀consumer฀response฀to฀Dr฀Pepper฀TEN
฀ ฀ 40฀percent฀of฀dollar฀sales฀were฀incremental฀to฀the฀CSD฀category.฀Backed฀by฀these฀promising฀results,฀we฀took
฀ •฀We฀grew฀Snapple฀volume฀3฀percent,฀ensuring฀that฀Snapple฀is฀enjoyed฀by฀more฀consumers฀across฀the฀country.
฀ •฀We฀launched฀Snapple฀Diet฀Half฀‘n฀Half฀Lemonade฀Iced฀Tea,฀which฀gained฀distribution฀quickly฀and฀has฀already฀฀
฀ •฀Driven฀by฀local฀activation฀events฀such฀as฀sponsorships฀of฀sporting฀events฀and฀The฀Latin฀GRAMMY
฀ •฀Canada฀Dry฀volume฀increased฀6฀percent฀on฀top฀of฀double-digit฀gains฀in฀2011.
฀ •฀Retail฀sales฀on฀priority฀brands฀in฀Canada฀were฀up฀1฀percent,฀outpacing฀the฀liquid฀refreshment฀beverages
฀ ฀ (LRB)฀category฀by฀0.2฀percentage฀points.฀
฀ •฀Our฀Latin฀America฀Beverages฀segment฀grew฀volume฀2฀percent,฀driven฀by฀increases฀in฀Peñafiel,฀Crush,฀Clamato฀฀
฀ ฀ and฀Squirt.฀In฀Mexico,฀we฀grew฀dollar฀share฀of฀total฀LRB฀by฀0.2฀points.
฀ •฀We฀increased฀trial฀and฀sampling฀opportunities฀at฀the฀fountain,฀adding฀more฀than฀45,000฀valves฀and฀growing
฀ •฀With฀a฀focus฀on฀quality฀placements
฀ ฀ cold-drink฀equipment.฀
฀ •฀We฀increased฀display฀tie-in฀rates฀by
฀ •฀Since฀beginning฀our฀rapid฀continuous
DPS฀is฀uniquely฀positioned฀to฀continue฀to฀capitalize฀on฀these฀trends.฀In฀fact,฀we’re฀adding฀incremental฀sales฀to฀the฀
being฀a฀line฀extension,฀TEN฀is฀a฀critical฀part฀of฀a฀long-term฀strategy฀designed฀to฀increase฀consumption฀frequency฀and฀
Our฀iconic฀flavors฀and฀their฀devoted฀followers฀are฀
flavors฀have฀grown฀21฀percent฀over฀the฀last฀three฀years.฀In฀California,฀there’s฀a฀new฀sales฀team฀in฀town฀–฀our฀Latino฀
value,฀one฀thing฀remains฀the฀same:฀When฀it฀comes฀to฀liquid฀refreshment,฀taste฀is฀king.฀In฀2013,฀our฀unrivaled฀brand฀
around฀goal฀deployment,฀ensuring฀alignment฀across฀functions฀and฀cultivating฀a฀Lean฀mindset฀in฀our฀senior฀leaders฀and฀
our฀leaders฀and฀their฀teams฀through฀our฀Mobilizing฀for฀ACTION฀initiative.฀The฀talent฀and฀commitment฀of฀our฀employees฀
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