Snapple 2011 Annual Report Download - page 25

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Attractive positioning within a large and profitable market. We hold the #1 position in the U.S. flavored CSD beverage
markets by volume according to Beverage Digest. We are also a leader in Canada and Mexico beverage markets. We believe that
these markets are well-positioned to benefit from emerging consumer trends such as the need for convenience and the demand
for products with health and wellness benefits. Our portfolio of products is biased toward flavored CSDs, which continue to gain
market share versus cola CSDs, but also focuses on emerging categories such as teas, energy drinks and juices.
Broad geographic manufacturing and distribution coverage. As of December 31, 2011, we had 18 manufacturing facilities
and 116 principal distribution centers and warehouse facilities in the U.S., as well as three manufacturing facilities and seven
principal distribution centers and warehouse facilities in Mexico. These facilities use a variety of manufacturing processes. We
have strategically located manufacturing and distribution capabilities, enabling us to better align our operations with our customers,
reduce transportation costs and have greater control over the timing and coordination of new product launches. In addition, our
warehouses are generally located at or near bottling plants and geographically dispersed to ensure our products are available to
meet consumer demand. We actively manage transportation of our products using our own fleet of approximately 6,000 delivery
trucks, as well as third party logistics providers on a selected basis.
Strong operating margins and stable cash flows. The breadth of our brand portfolio has enabled us to generate strong
operating margins which have delivered stable cash flows. These cash flows enable us to consider a variety of alternatives, such
as investing in our business, repurchasing shares of our common stock, paying dividends to our stockholders and reducing our
debt.
Experienced executive management team. Our executive management team has over 200 years of collective experience
in the food and beverage industry. The team has broad experience in brand ownership, manufacturing and distribution, and enjoys
strong relationships both within the industry and with major customers. In addition, our management team has diverse skills that
support our operating strategies, including driving organic growth through targeted and efficient marketing, improving productivity
of our operations, aligning manufacturing and distribution interests and executing strategic acquisitions.
Our Strategy
The key elements of our business strategy are to:
Build and enhance leading brands. We have a well-defined portfolio strategy to allocate our marketing and sales resources.
We use an on-going process of market and consumer analysis to identify key brands that we believe have the greatest potential
for profitable sales growth. We intend to continue to invest most heavily in our key brands to drive profitable and sustainable
growth by strengthening consumer awareness, developing innovative products and extending brands to take advantage of evolving
consumer trends, improving distribution and increasing promotional effectiveness. We also focus on new distribution agreements
for emerging, high-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 continued the expanded placement program
for our branded coolers and other cold drink equipment and intend to selectively increase the number of those types of equipment
where we believe we can achieve 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 continue leveraging 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.
Strengthen our route-to-market. Strengthening our route-to-market will ensure the ongoing health of our brands. We have
rolled out handheld technology and are 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.