Snapple 2009 Annual Report Download - page 26

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growth third party brands in new categories that can use our manufacturing and distribution network. We can
provide these new brands with distribution capability and resources to grow, and they provide us with exposure
to growing segments of the market with relatively low risk and capital investment.
Increase presence in high margin channels and packages. We are focused on improving our product
presence in high margin channels, such as convenience stores, vending machines and small independent retail
outlets, through increased selling activity and significant investments in coolers and other cold drink
equipment. We have embarked on an expanded placement program for our branded coolers and other cold
drink equipment and intend to significantly increase the number of those types of equipment over the next few
years, which we believe will provide an attractive return on investment. We also intend to increase demand for
high margin products like single-serve packages for many of our key brands through increased promotional
activity.
Leverage our integrated business model. We believe our integrated brand ownership, manufacturing
and distribution business model provides us opportunities for net sales and profit growth through the alignment
of the economic interests of our brand ownership and our manufacturing and distribution businesses. We intend
to leverage our integrated business model to reduce costs by creating greater geographic manufacturing and
distribution coverage and to be more flexible and responsive to the changing needs of our large retail customers
by coordinating sales, service, distribution, promotions and product launches. For example, we intend to
concentrate more of our manufacturing in multi-product, regional manufacturing facilities, including opening
a new plant in Southern California in 2010 and investing in expanded capabilities in several of our existing
facilities within the next several years.
Strengthen our route-to-market. In the near term, strengthening our route-to-market will ensure the
ongoing health of our brands. We are rolling out handheld technology and upgrading our information
technology (“IT”) infrastructure to improve route productivity and data integrity and standards. With third
party bottlers, we continue to deliver programs that maintain priority for our brands in their systems.
Improve operating efficiency. The integration of acquisitions into our Direct Store Delivery system
(“DSD”), a component of our Packaged Beverages segment, has created the opportunity to improve our
manufacturing, warehousing and distribution operations. For example, we have been able to create multi-
product manufacturing facilities (such as our Irving, Texas facility) which provide a region with a wide variety
of our products at reduced transportation and co-packing costs. In 2009, we established a Productivity Office to
drive ongoing productivity initiatives.
Our Business Operations
As of December 31, 2009, our operating structure consists of three business segments: Beverage Concentrates,
Packaged Beverages and Latin America Beverages. Segment financial data for 2009, 2008 and 2007, including
financial information about foreign and domestic operations, is included in Note 21 of the Notes to our Audited
Consolidated Financial Statements.
Beverage Concentrates
Our Beverage Concentrates segment is principally a brand ownership business. In this segment we manu-
facture and sell beverage concentrates in the United States and Canada. Most of the brands in this segment are CSD
brands. In 2009, our Beverage Concentrates segment had net sales of approximately $1.1 billion. Key brands
include Dr Pepper, 7UP, Sunkist soda, A&W, Canada Dry, Crush, Schweppes, Squirt, RC Cola, Diet Rite, Sundrop,
Welch’s, Vernors and Country Time and the concentrate form of Hawaiian Punch.
We are the industry leader in flavored CSDs with a 40.3% market share in the United States for 2009, as
measured by retail sales according to The Nielsen Company. We are also the third largest CSD brand owner as
measured by 2009 retail sales in the United States and Canada and we own a leading brand in most of the CSD
categories in which we compete.
Almost all of our beverage concentrates are manufactured at our plant in St. Louis, Missouri.
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