Snapple 2010 Annual Report Download - page 45

We sell our Packaged Beverages’ products both through our Direct Store Delivery system (“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 2010, Wal-Mart Stores, Inc., the largest customer of our Packaged Beverages segment, accounted for approximately
18% 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 2010, our Latin America Beverages segment had net
sales of $382 million with our operations in Mexico representing approximately 81% of the net sales of this segment. Key
brands include Peñafiel, Squirt, Clamato and Aguafiel.
In Mexico, we manufacture and distribute our products through our bottling operations and third party bottlers and
distributors. In the Caribbean, we distribute our products through third party bottlers and distributors. In Mexico, we also
participate in a joint venture to manufacture Aguafiel brand water with Acqua Minerale San Benedetto. We provide expertise in
the Mexican beverage market and Acqua Minerale San Benedetto provides expertise in water production and new packaging
technologies.
We sell our finished beverages through all major Mexican retail channels, including the “mom and pop” stores,
supermarkets, hypermarkets, and on premise channels.
Volume
In evaluating our performance, we consider different volume measures depending on whether we sell beverage
concentrates or finished beverages.
Beverage Concentrates Sales Volume
In our Beverage Concentrates segment, we measure our sales volume in two ways: (1) “concentrates case sales” and
(2) “bottler case sales.” The unit of measurement for both concentrates case sales and bottler case sales equals 288 fluid ounces
of finished beverage, or 24 twelve ounce servings.
Concentrates case sales represent units of measurement for concentrates sold by us to our bottlers and distributors. A
concentrates case is the amount of concentrate needed to make one case of 288 fluid ounces of finished beverage. It does not
include any other component of the finished beverage other than concentrate. Our net sales in our concentrates businesses are
based on concentrates cases sold.
Although our net sales in our concentrates businesses are based on concentrates case sales, we believe that bottler case
sales, as defined below, are also a significant measure of our performance because they measure sales, both by us and our
bottlers, of our finished beverages into retail channels.
Packaged Beverages Sales Volume
In our Packaged Beverages segment, we measure volume as case sales to customers. A case sale represents a unit of
measurement equal to 288 fluid ounces of packaged beverage sold by us. Case sales include both our owned-brands and certain
brands licensed to and/or distributed by us.
Volume in Bottler Case Sales
In addition to sales volume, we also measure volume in bottler case sales (“volume (BCS)”) as sales of packaged
beverages, in equivalent 288 fluid ounce cases, sold by us and our bottlers to retailers and independent distributors.
Bottler case sales and concentrates and packaged beverage sales volumes are not equal during any given period due to
changes in bottler concentrates inventory levels, which can be affected by seasonality, bottler inventory and manufacturing
practices, and the timing of price increases and new product introductions.
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