Snapple 2014 Annual Report Download - page 34

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31
BEVERAGE CONCENTRATES
The following table details our Beverage Concentrates segment's net sales and SOP for the years ended December 31, 2014
and 2013 (in millions):
For the Year Ended
December 31,
2014 2013 Change
Net sales $ 1,228 $ 1,229 $ (1)
SOP 790 778 12
Net Sales. Net sales decreased $1 million for the year ended December 31, 2014, compared with the year ended December
31, 2013. The decrease was due to higher discounts and unfavorable foreign currency translation, largely offset by an increase in
concentrate prices, a slight increase in sales volumes and higher licensing revenue. The higher discounts were primarily driven
by the annual true-up of our prior year estimated customer liability.
SOP. SOP increased $12 million for the year ended December 31, 2014, compared with the year ended December 31, 2013,
primarily driven by decreases in SG&A expenses and favorability in cost of sales. The decrease in cost of sales was primarily
driven by lower commodity costs, led by sweeteners, and ongoing productivity improvements, partially offset by an unfavorable
LIFO comparison of $3 million and higher costs associated with increased sales volumes. The decrease in SG&A expenses was
the result of $15 million in planned lower marketing investments, partially offset by increased people costs.
Volume (BCS). Volume (BCS) was flat for the year ended December 31, 2014 compared with the year ended December 31,
2013. Dr Pepper decreased 2%, driven primarily by declines in our diet products. Our other brands decreased 10%, primarily due
to the discontinuation of Welch's. These decreases were partially offset by growth in Schweppes, our Core 4 brands and Crush.
Schweppes had a 10% increase driven by distribution gains in our seltzer water and growth in the ginger ale category. Our Core
4 brands increased 3% compared to the prior year as a result of a 6% increase in Canada Dry and 3% increase in Sunkist soda
partially offset by a 4% decrease in 7UP and a 1% decline in A&W. Crush grew 1% for the current year.
PACKAGED BEVERAGES
The following table details our Packaged Beverages segment's net sales and SOP for the years ended December 31, 2014 and
2013 (in millions):
For the Year Ended
December 31,
2014 2013 Change
Net sales $ 4,361 $ 4,306 $ 55
SOP 636 525 111
Volume. Branded CSD volumes increased 1% for the year ended December 31, 2014 compared with the year ended December
31, 2013. Volume for our Core 4 brands increased 2% compared to the prior year period, led by a 11% increase in Canada Dry,
partially offset by a 2% decline in Sunkist soda. 7UP and A&W volumes were flat in the current year. Squirt increased 7% compared
to the prior year period due to higher promotional activity and package innovation. RC Cola increased 6%. Our other CSD brands
increased 1% in the current year. These increases were partially offset by a 2% decrease in Dr Pepper, driven primarily by declines
in our diet products.
Branded NCB volumes decreased 1%, driven primarily by a 6% decline in Hawaiian Punch as a result of increased competitive
activity and category declines. Our other NCB brands decreased 2%, while Mott's decreased 1% due to declines in apple sauce.
These decreases were partially offset by a 12% increase in our water category and a 7% increase in Clamato as a result of increased
promotional activity. Growth in our water category was primarily driven by new distribution arrangements for Bai 5 and Sparkling
Fruit2O and distribution gains in FIJI and Vita Coco. Snapple volumes were flat for the current period as growth in our higher
margin Snapple Premium products was fully offset by our de-emphasis on our value products.
Net Sales. Net sales increased $55 million for the year ended December 31, 2014 compared with the year ended December
31, 2013. Net sales increased due to favorable product mix, higher branded sales volumes, an increase in contract manufacturing
and lower discounts, partially offset by increased promotional activity and unfavorable foreign currency translation.