View Full Version : Cadbury to Sell Off US Unit

11-03-2003, 05:38 PM
Cadbury announced yesterday that it may look at the businss opportunity to "demerge" its US Soft drink business

What do you think? Who should they sell to? Should they go public? What about Dr. Pepper Seven Up Bottling Group?


11-03-2003, 05:39 PM
i think the demerge (if you read the article) was to split it from the candy/confectionary units...

11-03-2003, 07:44 PM
I think with the "merging" of the various beverage businesses (Snapple, Mott's, DPSU, etc), they will be in a better position then they are now, and I don't think the de-merging of the beverages from the rest of the company would be necessary.

Terry K
11-04-2003, 12:21 AM
My take on it is that DPSU needs to do a few things, including seperating beverages from Cadbury.

Its a pretty proven fact that a company who has a major focus on beverages does better than a company who is in multiple businesses (Eg, Coke and its botches attempt to get into movies and other businesses. Pepsi and Fast food, need I say more?)

In the case of Cadbury/Schweppes, Cadbury has mismaanged DPSU to the point where seperating it and Motts/Snapple from the candy business would be a good thing.

Selling off the international rights to Dr Pepper and other products was a complete and total mistake. Its really confusing to figure out who has rights to what outside the US (and we won't even discuss the 7up international fiasco)

As for DPSUBG, its owned only 40% or so by DPSU/Cadbury. I think turner owns like 20-30% and the rest is stockholder owned publically, not sure on that.

Pepsi is looking at the same thing with Quaker simply because they're in a business they know nothing about and is not doing all that well. As for Frito-Lay, Pepsi does well with it because they let it run as a seperate business, yet are able to tie it in when they need to (snacks do go with soda), and both COke & Pepsi have done well with the juice businesses which do tie back to soda.

Candy and Soda/Juice do not go together, IMHO.

11-04-2003, 08:16 AM
Pepsi: The market views PepsiCo as a potato chip company with a soft drinks side-line. The company runs the two divisions totally seperately, so much so that the word "PepsiCo" doesn't even appear on F-L packages. The salty snack division now represents the majority of the corporation's sales and income. W/o F-L, Pepsi would be one of the worst stocks to own there is. Tropicanna was a valid pickup.

Pepsi bought the whole Quaker Qats company to get Gatorade, it has to own it for 2 years for income tax purposes, but it will strip off Gatorade and a few other products (Quaker's line of snack foods and a little else) and sell the rest to a traditional grocery food company.

C-S: A C-S beverage group, which would be a North America focused stock, would be a valid company. If I understand this correctly, C-S is currently a mess of rights issues, owning Dr Pepper in North America and what I guess we can call the ex-British Empire, 7-up in just North America, but it sold off US rights to its own candy brands to Hershey long ago. This makes for a mess, a worldwide candy company which doesn't sell in the US combined with a US only soft drinks company.

The real answer for DPSU is to get control of its marketing by a nationwide system of "3rd tier" bottlers of its entire product line, and massive expansion in the fountain markets, rather than being a mish-mash of Coke and Pepsi bottler's side lines.

11-04-2003, 11:35 AM
What Cadbury realy needs to do is make a chocolate soda that tastes as good as those little cream filled easter eggs they make. MMMMMmmmmmm.

11-04-2003, 10:55 PM
Sam's right. They need to quit licensing Pepsi and Coke being entirely dependent upon sales from them. They need to pull Dr Pepper from Pepsi and Coke, and they need to remove some of the other products like Canada Dry and Sunkist, which help determine whether Pepsi or Coke holds the advantage in the market. Pushing fountain like it's been done in the Dallas market nationwide is the only legitimate way to make its presence known, showing America there are 3 bottlers of soft drinks in America.

They also need to find a way to get something going outside of the US, instead of letting Pepsi have 7Up, and Coke having Dr Pepper.

11-06-2003, 12:31 AM
Cadbury squashed this rumor today. No truth in it, according to them.

11-06-2003, 12:56 AM
You can't believe anything they say in either direction. But the answer is most obviously, to just hand their cans and plastic to some mass market maverick and to license every imaginable brand they own to me to market in glass bottles totally autocratically with their getting a percentage off the top. Then just watch...

11-06-2003, 12:45 PM
the man's right, i mean, he usually is, ain't he?