Snapple 2014 Annual Report Download - page 39

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36
Volume (BCS). Volume (BCS) decreased 2% as a result of continued category headwinds for the year ended December 31,
2013 compared with the year ended December 31, 2012, primarily driven by a 2% decline in Dr Pepper and a 7% decrease in
Crush. Other drivers of the decline include a 7% decline in RC Cola, a 6% decrease in Sun Drop and a 6% decline in Squirt. These
declines were partially offset by a 6% increase in Schweppes reflecting distribution gains in our seltzer water and growth in the
ginger ale category. Our Core 4 brands, which included the impact of the launch of our Core 4 TEN products, were flat compared
to the prior year as a result of a 7% decline in Sunkist soda, a 4% decrease in 7UP and a 3% decline in A&W, offset by a 4%
increase in Canada Dry.
PACKAGED BEVERAGES
The following table details our Packaged Beverages segment's net sales and SOP for the years ended December 31, 2013 and
2012 (in millions):
For the Year Ended
December 31,
2013 2012 Change
Net sales $ 4,306 $ 4,358 $ (52)
SOP 525 539 (14)
Volume. Total sales volume decreased 3% for the year ended December 31, 2013 compared with the year ended December
31, 2012. Lower NCB volumes, CSD volumes and contract manufacturing each decreased our total segment sales volume by 1%.
Within CSDs, volume declined 2% for the year ended December 31, 2013 compared with the year ended December 31, 2012,
as a result of continued category headwinds. Volume for our Core 4 brands, which includes the impact of the launch of our Core
4 TEN products, decreased 1% for the year ended December 31, 2013, led by a 7% decline in Sunkist soda, a 3% decrease in 7UP
and an 1% decline in A&W, partially offset by a double digit increase in Canada Dry. Dr Pepper volumes decreased 3% for the
year ended December 31, 2013. Sun Drop declined by double-digits, while Squirt declined 2%. Our other brands decreased 6%
for the year ended December 31, 2013. These declines were partially offset by a 3% increase in RC Cola which included the launch
of the RC TEN product.
Within NCBs, volume decreased 4%, driven primarily by a 10% decline in Hawaiian Punch as a result of declines within the
category and lower promotional activity. Our other brands decreased 8%, led by distribution losses in AriZona. These decreases
were partially offset by a 3% increase in Mott's as a result of distribution gains in our juice and sauce categories and increased
promotional activity, a 2% increase in our water category and a 2% increase in Clamato. Snapple was flat for the period.
Net Sales. Net sales decreased $52 million for the year ended December 31, 2013 compared with the year ended December
31, 2012. Net sales decreased due to a decline in our sales volumes and an unfavorable comparison of trade adjustments, which
were partially offset by favorable mix and net pricing increases led by Mott's.
SOP. SOP decreased $14 million for the year ended December 31, 2013, compared with the year ended December 31, 2012.
The primary factors driving the decrease in SOP included a $56 million non-cash charge related to our intention to withdraw from
the Local 710 multi-employer pension plan and higher commodity costs, led by apples, which were partially offset by a $56 million
favorable comparison in our LIFO inventory provision. Other drivers of SOP include the gross margin impact of lower net sales,
partially offset by ongoing productivity improvements, lower labor and benefit costs, the favorable comparison to the $8 million
depreciation adjustment recorded in the prior year, lower logistics costs and a $6 million favorable adjustment in 2013 to the legal
provision associated with the ABC litigation.