Snapple 2011 Annual Report Download - page 44

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Seasonality
The beverage market is subject to some seasonal variations. Our beverage sales are generally higher during the warmer months
and also can be influenced by the timing of holidays as well as weather fluctuations.
Segments
We report our business in three operating segments: Beverage Concentrates, Packaged Beverages and Latin America
Beverages.
The key financial measures management uses to assess the performance of our segments are net sales and segment operating
profit ("SOP").
Beverage Concentrates
Our Beverage Concentrates segment is principally a brand ownership business. In this segment we manufacture and sell
beverage concentrates in the U.S. and Canada. Most of the brands in this segment are CSD brands. In 2011, our Beverage
Concentrates segment had net sales of approximately $1.2 billion. Key brands include Dr Pepper, Canada Dry, Crush, Schweppes,
7UP, Sunkist soda, A&W, Sun Drop, RC Cola, Diet Rite, Squirt, Welch's, Country Time, Vernors and the concentrate form of
Hawaiian Punch.
We are the industry leader in flavored CSDs with a 40.0% market share in the United States for 2011, as measured by retail
sales according to Nielsen. We are also the third largest CSD brand owner as measured by 2011 retail sales in the U.S. 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.
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 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, 70% of Dr Pepper volumes
are distributed through the Coca-Cola affiliated and PepsiCo affiliated bottler systems.
PepsiCo and Coca-Cola are the two largest customers of the Beverage Concentrates segment, and constituted approximately
29% and 20%, respectively, of the segment's net sales during 2011 .
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 2011, our Packaged Beverages segment had net sales of
approximately $4.3 billion. Key NCB brands in this segment include Snapple, Hawaiian Punch, Mott's, Yoo-Hoo, Clamato, Deja
Blue, AriZona, FIJI, Mistic, Nantucket Nectars, ReaLemon, Mr and Mrs T, Rose's and Country Time. Key CSD brands in this
segment include 7UP, Dr Pepper, A&W, Sunkist soda, Canada Dry, Squirt, RC Cola, Big Red, Sun Drop, Diet Rite, IBC and
Vernors.
Approximately 87% of our 2011 Packaged Beverages net sales of branded products come from our own brands, with the
remaining from the distribution of third party brands such as Big Red, AriZona tea, FIJI mineral water, Neuro beverages, Vita
Coco coconut water and Hydrive energy drinks. 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.