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Beverage NewsCarbonated Soft Drinks

Sales growth in Q4, full-year 2014 for DPS

Peñafiel volume increases, product innovation leads growth

February 13, 2015

Dr Pepper Snapple Group Inc. (DPS), Plano, Texas, reported positive net sales for both the fourth quarter of 2014 and the full year.

For the quarter, reported net sales increased 3 percent on a 2 percent increase in sales volumes and favorable product, package and segment mix, which were partially offset by 1 percentage point of unfavorable foreign currency translation. Reported income from operations for the quarter was $256 million, including a $23 million unrealized commodity mark-to-market loss and a $14 million charge due to the annuitization of certain pension obligations.

Bottler case sales (BCS) volume in the quarter increased 2 percent with carbonated soft drinks (CSDs) increasing 2 percent and non-carbonated beverages (NCBs) increasing 1 percent.

In CSDs, Peñafiel volume increased 17 percent on product innovation. Its Core 4 brands grew 3 percent, driven by a high-single-digit increase in Canada Dry and low-single-digit increases in Sunkist soda and A&W, which were partially offset by a low-single-digit decline in 7Up. Schweppes increased 10 percent, and Crush declined mid-single-digits. In addition, Dr Pepper volume was flat, and fountain foodservice volume grew 2 percent for the quarter.

In NCBs, Snapple grew 4 percent for the quarter, driven primarily by mid-single-digit growth in Snapple Premium, which was partially offset by the company’s de-emphasis on its value products. Clamato volume increased 9 percent, and its water category grew 5 percent for the quarter. Hawaiian Punch volume decreased 4 percent in the period, and Mott’s declined 2 percent on lower sauce volumes.

For the year, reported net sales increased 2 percent, and reported income from operations was nearly $1.2 billion. Core income from operations was just more than $1.2 billion, up 7 percent compared with the prior-year period.

During 2014, BCS volume increased 1 percent with CSDs increasing 1 percent and NCBs declining 1 percent.

In CSDs, Peñafiel volume increased 21 percent on product innovation in 2014. The company’s Core 4 brands grew 2 percent, driven by a high-single-digit increase in Canada Dry, which was partially offset by a low-single-digit decline in 7Up. Sunkist and A&W were flat for the year, and Schweppes increased 10 percent, while Crush decreased low-single-digits. Dr Pepper volume declined 2 percent primarily on continued declines in diet, and fountain foodservice volume grew 1 percent for the year.

In NCBs, Hawaiian Punch declined 7 percent, and Mott’s volume decreased 1 percent on lower sauce volumes during 2014. Clamato increased 7 percent, and our water category grew 3 percent for the year. Snapple grew 1 percent, driven primarily by mid-single-digit growth in Snapple Premium, which was partially offset by DPS’ de-emphasis on its value products.

“In looking back at our performance in 2014, there’s no question that our teams continued to deliver against our focused strategy in a competitive environment,” said Larry Young, president and chief executive officer of DPS, in a statement. “We continued to build our brands with relevant consumer messaging and programming, delivered innovation to meet consumers’ evolving needs and drove distribution and availability gains across the portfolio. Rapid Continuous Improvement (RCI) is helping us to drive growth and productivity across the business, and we’ve continued to return excess cash to our shareholders. I’m confident that we have the plans in place for 2015 to drive further improvement.”

KEYWORDS: beverage sales financial reports

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