Dr Pepper Snapple saw a 1% increase in volume, taking year-to-date volume growth to 2%, as it reported a very strong set of third-quarter results.
Net sales for the three months to the end of September were $1.74 billion – up 3.6% from the same period last year – while operating income fell nominally to $367 million.
Like Unilever, the company cited natural disasters in North America as a significant obstacle during the quarter. It said that recent hurricanes and earthquakes in the US and Mexico were estimated to have reduced volume and net sales by about 0.5%, and core income from operations by about 2%, over the course of the three months.
Its acquisition of Bai Brands, which closed at the beginning of the year, continued to deliver improvements in volume, revenue and incremental gross profit. The company expects net sales growth of around 4.5% for the year, including the acquisition of Bai.
Doctor Pepper Snapple CEO Larry Young said: “We continue to make progress in the execution of our priority brand strategy, including our brand building platform and channel strategies for Bai, even though we had markets that were significantly disrupted by hurricanes and earthquakes in the US and Mexico.
“Our carbonated soft drink portfolio continued to perform well in the quarter, growing both dollar and volume share in the category, and our allied portfolio continues to drive strong growth across the business.”
American and Canadian volume was flat, with Mexico and the Caribbean contributing 2% growth. The company’s overall volume performance was negatively impacted by an estimated 0.5% as a result of recent natural disasters, including hurricanes and earthquakes.
In terms of DPS’ reporting segments, beverage concentrates grew volume by 1% and Latin America Beverages by 2%.
For the quarter, volume was flat, with carbonated soft drinks decreasing 1% and non-carbonated beverages increasing 6%.
Dr Pepper sales decreased 2% with declines in both regular and diet formats, due primarily to the timing of orders from “a large customer in fountain foodservice”. 7UP decreased 8%, driven by reduced retail activity compared to the prior year. Schweppes decreased 1% as declines in sparkling water were partially offset by continued growth in ginger ale. A&W decreased 1%, and other CSDs declined 3%, primarily due to the loss of Rockstar distribution rights. Canada Dry grew by 2% on continued growth in the ginger ale category. Peñafiel increased 5% on distribution gains and product and package innovation, and Squirt grew 1%. Fountain foodservice volume declined 3%.
Bai Brands increased 108% on the acquisition and continued growth in DPS’ existing distribution. So-called allied brands, which no longer include Bai, grew 40% on strong distribution gains in brands like Bodyarmor, Fiji and Core, as well as strong innovation. Clamato grew 7%, and Mott’s increased 5%, primarily because of growth in sauce. Snapple declined 5%, and all other non-carbonated beverages declined 1%.
© FoodBev Media Ltd 2018
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