Snapple 2008 Annual Report Download - page 8

Letter to Stockholders
including all-new 7UP and Snapple advertising
campaigns and a return to the airwaves for A&W,
Canada Dry and Mo ’s.
We also expect the Crush brand to provide added
momentum to our CSD business as a result of
distribution agreements with Pepsi Bo ling Group,
PepsiAmericas and others that will greatly expand its
availability across the U.S.
Pursuing Profi table Channels, Packages
and Formats
In 2008, we gained distribution in key accounts across
several major channels, most notably the dollar store
channel, where Dr Pepper grew signi cantly; the
convenience channel, where we increased our Core 4
20 oz. availability by 8 percentage points; and fountain
foodservice, where we added more than 31,000 fountain
valves, primarily for Dr Pepper and Diet Dr Pepper in
quick service restaurants.
With 11 percent of our sales in our company-owned
direct store delivery (DSD) operation coming from
our single serve business, compared with an estimated
industry average of 18 percent, we see tremendous
room to grow in this highly pro table segment.
Supporting this is our Winning in Single Serve program,
which focuses on driving immediate consumption
opportunities through vending machine and cooler
placements, selling “up and down the street,” and
increased availability in fountain foodservice.
 rough this initiative, we plan to place 35,000
incremental pieces of cold drink equipment each year
for the next  ve years, beginning in 2009. We got a
head start on this program in 2008, with 10,000
incremental vending machines and coolers already
placed in both local and national accounts.
Leveraging Our Integrated Business Model
and Strengthening Our Route to Market
Acquiring several bo ling businesses over the
last few years has helped us secure our route to
market, protect our brands and be er serve
our customers. In the past year, we
made further strides through a
realignment of our sales functions.
We are integrating our  nished goods business with our
company-owned DSD operation to form a Packaged
Beverages organization that is serving retailers e ectively
via both DSD and warehouse delivery systems. Our
Beverage Concentrates division is focused on our
third-party bo lers and national accounts, developing
programs and processes that enable the sharing and
growth of the overall pro t pool. During the  rst quarter
of 2009, our reporting segments will be realigned to
be er re ect this structure.
In addition, we are equipping our DSD sales force with
a best-of-breed mobility solution that includes state-
of-the-art handhelds, printers and leading logistics
so ware. We expect these investments in our business
to improve sales and route analytics,  eet utilization and
deployment, sales e ciency and customer service.
Improving Operating Effi ciency
Dr Pepper Snapple is focused on crushing costs. With
our company-owned DSD system producing hundreds
of millions of cases each year, saving pennies per case
quickly adds up to tens of millions of dollars.
With a mindset of continuous improvement, we made
great progress in optimizing our operations in 2008.
Overall equipment e ectiveness (OEE), our supply
chain operating e ciency measure, increased nearly four
points in 2008, as we’ve made signi cant investments in
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Our strong, consistent cash fl ow enables us both to invest in
growth and productivity initiatives and pay down debt.