Snapple 2009 Annual Report Download - page 27

The beverage concentrates are shipped to third party bottlers, as well as to our own manufacturing systems,
who combine them with carbonation, water, sweeteners and other ingredients, package it in PET containers, glass
bottles and aluminum cans, and sell it as a finished beverage to retailers. Beverage concentrates are also
manufactured into syrup, which is shipped to fountain customers, such as fast food restaurants, who mix the
syrup with water and carbonation to create a finished beverage at the point of sale to consumers. Dr Pepper
represents most of our fountain channel volume. Concentrate prices historically have been reviewed and adjusted at
least on an annual basis.
Our Beverage Concentrates brands are sold by our bottlers, including our own Packaged Beverages segment,
through all major retail channels including supermarkets, fountains, mass merchandisers, club stores, vending
machines, convenience stores, gas stations, small groceries, drug chains and dollar stores. Unlike the majority of our
other CSD brands, 72% of Dr Pepper volumes are distributed through the Coca-Cola affiliated and PepsiCo
affiliated bottler systems.
Pepsi Bottling Group, Inc. (“PBG”) and Coca-Cola Enterprises, Inc. (“CCE”) are the two largest customers of
the Beverage Concentrates segment, and constituted 25% and 23%, respectively, of net sales during 2009.
Packaged Beverages
Our Packaged Beverages segment is principally a brand ownership, manufacturing and distribution business.
In this segment, we primarily manufacture and distribute packaged beverages and other products, including our
brands, third party owned brands and certain private label beverages, in the United States and Canada. In 2009, our
Packaged Beverages segment had net sales of approximately $4.1 billion. Key NCB brands in this segment include
Snapple, Mott’s, Hawaiian Punch, Clamato, Yoo-Hoo, Country Time, Nantucket Nectars, ReaLemon, Mr and
Mrs T, Rose’s and Margaritaville. Key CSD brands in this segment include Dr Pepper, 7UP, Sunkist soda, A&W,
Canada Dry, Squirt, RC Cola, Welch’s, Vernors, IBC, Mistic and Venom Energy.
Approximately 87% of our 2009 Packaged Beverages net sales of branded products come from our own
brands, with the remaining from the distribution of third party brands such as FIJI mineral water and AriZona tea. A
portion of our sales also comes from bottling beverages and other products for private label owners or others for a
fee. Although the majority of our Packaged Beverages’ net sales relate to our brands, we also provide a
route-to-market for third party brand owners seeking effective distribution for their new and emerging brands.
These brands give us exposure in certain markets to fast growing segments of the beverage industry with minimal
capital investment.
Our Packaged Beverages’ products are manufactured in multiple facilities across the United States and are sold
or distributed to retailers and their warehouses by our own distribution network or by third party distributors. The
raw materials used to manufacture our products include aluminum cans and ends, glass bottles, PET bottles and
caps, paper products, sweeteners, juices, water and other ingredients.
We sell our Packaged Beverages’ products both through our DSD, supported by a fleet of more than 5,000
trucks and approximately 12,000 employees, including sales representatives, merchandisers, drivers and warehouse
workers, as well as through our Warehouse Direct delivery system (“WD”), both of which include the sales to all
major retail channels, including supermarkets, fountain channel, mass merchandisers, club stores, vending
machines, convenience stores, gas stations, small groceries, drug chains and dollar stores.
In 2009, Wal-Mart Stores, Inc., the largest customer of our Packaged Beverages segment, accounted for
approximately 17% of our net sales in this segment.
Latin America Beverages
Our Latin America Beverages segment is a brand ownership, manufacturing and distribution business. This
segment participates mainly in the carbonated mineral water, flavored CSD, bottled water and vegetable juice
categories, with particular strength in carbonated mineral water and grapefruit flavored CSDs. In 2009, our Latin
America Beverages segment had net sales of $357 million with our operations in Mexico representing approx-
imately 88% of the net sales of this segment. Key brands include Peñafiel, Squirt, Clamato and Aguafiel.
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