Snapple 2012 Annual Report Download - page 47

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SOP. SOP decreased $5 million, or approximately 1%, for the year ended December 31, 2012, as compared with the year ago
period. The decrease was primarily driven by $21 million of higher marketing investments and increased costs for our commodities,
led by flavors. These decreases were partially offset by the benefit of higher net sales.
Volume (BCS). Volume (BCS) was flat for the year ended December 31, 2012, as compared with the year ago period. Our
Core 5 brands decreased approximately 1% compared to the prior year as a result of high single-digit declines in Sunkist soda,
and Sun Drop and low single-digit decreases in 7UP and A&W, partially offset by a mid single-digit increase in Canada Dry. Crush
had a mid single-digit decline. Dr Pepper volume was flat due to increases in regular Dr Pepper and Dr Pepper TEN, which
launched in the fourth quarter of 2011, offset by declines in Cherry and Diet.
PACKAGED BEVERAGES
The following table details our Packaged Beverages segment's net sales and SOP for the years ended December 31, 2012 and
2011 (in millions):
For the Year Ended
December 31,
2012 2011 Change
Net sales $ 4,358 $ 4,292 $ 66
SOP 539 519 20
Volume. Total sales volume decreased 2% for the year ended December 31, 2012, compared with the year ended December
31, 2011, driven by lower NCB volumes.
Within CSDs, volume was flat for the year ended December 31, 2012, compared with the year ended December 31, 2011.
Volume for our Core 5 brands increased 1%, led by a high single-digit increase in Canada Dry, mid single-digit increase in Sunkist
soda, as a result of flavor expansion, and a low single-digit increase in A&W. Sun Drop experienced a double-digit decrease
primarily due to cycling the national launch of the brand in the prior year, while 7UP had a mid single-digit decrease. Dr Pepper
volumes decreased 1% for the year ended December 31, 2012, as decreased volume in base Dr Pepper was partially offset by
growth of Dr Pepper TEN, which launched in the fourth quarter of 2011. Squirt increased 2%, while our other brands, which
include Welch's, decreased 2% for the year ended December 31, 2012.
Within NCBs, volume decreased 5%. Hawaiian Punch declined 17% as a result of price increases, while Mott's decreased
7% as a result of net pricing increases and lower promotional activity. These decreases were partially offset by a 12% increase in
our water category, led by Vita Coco and Deja Blue, and a 2% increase in Snapple due to package and flavor innovation.
Net Sales. Net sales increased $66 million for the year ended December 31, 2012, compared with the year ended December
31, 2011. Net sales increased due to favorable mix and net pricing increases for CSDs, Mott's and Hawaiian Punch. These increases
were partially offset by a decrease in our sales volumes.
SOP. SOP increased $20 million for the year ended December 31, 2012, compared with the year ended December 31, 2011.
Significant factors included the benefit of higher net sales partially offset by higher labor and benefit costs. Other positive factors
that impacted SOP included ongoing productivity improvements, lower distribution fees, which were primarily a result of lower
NCB volumes, and the favorable comparison of the ABC litigation recorded in the prior year. These positive factors were partially
offset by higher costs for our commodities, increased manufacturing costs and an increase in our last-in, first out ("LIFO") provision.
The higher costs for our commodities, which impacted the increase in our LIFO provision, were led by apples, flavors, apple juice
concentrate and PET.