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CitrusCola
03-20-2007, 05:11 PM
It seems Cadbury-Schweppes plans to split into two separate companies: a candy company and a soft drink company.

At first, I thought that this might be good news, but as I read more about what is likely to happen, I became more concerned. If the soft drinks are spun off in a U.S.-based company, the most likely thing to happen would be for the poorer-selling soft drinks to be eliminated. If the soft drink business is sold off to a private equity firm, the rights to most of the underperforming drinks would most likely be sold off. In either case, I get the impression that our choices of soft drinks will decrease after this demerger.

greg
03-20-2007, 05:29 PM
Business is Business. If poorer performing drinks are a drain to the bottom line it only makes sense to get rid of them. Why would any company want to keep sku's around just for a few dedicated consumers? The beverage business is a volume based business. Of more importance, the CSD business is a volume business.

boodoo
03-20-2007, 06:08 PM
Or maybe it would be a good thing. Over the past several years we have seen many smaller companies swallowed up by the evil corporate giants. What has this given us? Limited sku's and some brands disappearing completely. If brands were sold by a pending investment group maybe we could see a return of missing brands. One can always hope.....

Willbev
03-20-2007, 10:12 PM
Let'em sell them off, we will drink them.

popologist
03-20-2007, 11:04 PM
will coke FINALLY buy dr pepper?

fusion
03-20-2007, 11:32 PM
Dr Pepper has too much market share. The FTC would never allow it.

This move will put C-S on par with Coke. A beverage-only company.

Plus, C-S now owns most of their own bottling operations. So, a company that focuses only on beverage development and distribution could be a lot stronger than the current behemoth that exists.

Maybe #3 could give Coke and Pepsi a real run for their money.

The split should be fairly uncomplicated, since C-S reorganized all the beverage operations.. Previously you had Snapple, Motts and DPSU all separate.

SamC
03-21-2007, 06:51 AM
will coke FINALLY buy dr pepper?

Coke owns Dr Pepper. In all but 17 countries, including the USA. The government will not let KO buy it here. Similarly, Pepsi owns 7UP everywhere but the USA. The government will never agree. In any event bottler deals overlay who is running the corporate HQ anyway.

A C-S split off makes sense. The S side is a, more or less, US soft drinks company, not owning the brand names elsewhere, while the C side is a everywhere else candy company, having liscensed its candy brand name in the USA to Hershey.

mofizz
03-21-2007, 09:12 AM
The C-S split does make sense. Soft drinks are way more profitable than candies. Our C-S rep was here yesterday and is quite happy about it because they will no longer be subsidizing the candy business and will no longer have to report to London. It will once again be an American run company. I hope it works out.

Drew
03-21-2007, 10:00 AM
We basically have 3 main pop companies in canada. Pepsi, Coke and Cadbury Schweppes. On that note Pepsi bottles for C-S so technically we only have two bottlers. It makes for not a lot of options in a pretty optionless country.

CitrusCola
03-21-2007, 03:10 PM
While I would really like to see C-S be on par with Coke and Pepsi, I'd hate to see some products go away. C-S has acquired many overlapping soft drinks:

A&W/Hires/I.B.C.
Orange Crush/Sunkist Orange/Nehi Orange
Welch's Grape/Nehi Grape
Canada Dry/Vernors/Schweppes Ginger Ale

If a private firm buys the C-S beverage business, then most of the redundant brand names would probably be sold off to smaller beverage firms. If C-S beverages becomes a free-standing company after the split, however, the company's best interest might be to retire the redundant brands instead of selling an established brand name product to a competing company.

mjb1124
03-21-2007, 03:13 PM
I'd like to see C-S sell Crush to Pepsi. It's a popular brand that they've mostly pushed aside in favor of Sunkist and Welch's, and Tropicana Twister Soda hasn't really caught on from what I can tell. Maybe they can give Pepsi one of their ginger ale brands as well.

CitrusCola
03-21-2007, 03:28 PM
If many of the C-S products end up being sold, some currently retired brands could end up being sold off as well.

When the folks at C-S aquired the Royal Crown Cola products, for example, they retired Upper 10 (which competes with 7-Up) and Kick (which competes with Sun Drop). A private holding firm would want to sell these brand names if there were any interested buyers.

Mr Zabe
03-21-2007, 04:53 PM
Man, if forgot about Upper 10. Back in my pay check to ever poorer days, Upper Ten was more affordable then 7up or Sprite. Upper 10 was a good soda pop for those hot humid Chicago days of summer.

Paul's Beverages
03-22-2007, 08:34 AM
Or maybe it would be a good thing. Over the past several years we have seen many smaller companies swallowed up by the evil corporate giants. What has this given us? Limited sku's and some brands disappearing completely. If brands were sold by a pending investment group maybe we could see a return of missing brands. One can always hope.....
We have seen Nehi and Crush disappear. Many of their distributors and consumers would have loved to see those flavors offered. I believe that plant consolidations have forced Cadbury to narrow production to limit the sku's. I agree change could only be good.

mofizz
03-22-2007, 09:31 AM
I'd like to see C-S sell Crush to Pepsi. It's a popular brand that they've mostly pushed aside in favor of Sunkist and Welch's, and Tropicana Twister Soda hasn't really caught on from what I can tell. Maybe they can give Pepsi one of their ginger ale brands as well.

God i hope Crush will be aligned with the Pepsi system. That would be huge. Tropicana Twister is ****.

pepsipimp
03-22-2007, 03:27 PM
God i hope Crush will be aligned with the Pepsi system. That would be huge. Tropicana Twister is ****.

That would be nice, the only Twister left around here is Orange (12pk and 2Liter only) Slice outsold it 2 to 1.

MISTICman
03-23-2007, 02:52 AM
Now this REALLY has me curious.....
Will this encourage more 3rd tier distributers across America to try to get the rights to ALL of C-S's brands? Around here, Coke doesn't have ANY C-S brands. Pepsi has Schweppes, Dr. Pepper, Hawiian Punch and Squirt. Cheerwine has Sun Drop, Sunkist, A&W, Welch's, RC, Vernors, Canada Dry, Sunny D, Diet Rite, and 7-Up.
As far as Snapple and Mistic, a wine vendor has those and won't even give Mistic a chance.
Maybe it would be a good idea for all these 3rd tier distributors to carry all of C-S's brands of sodas and new age beverages. This way there would be true competition.
It would also be less confusing to those of us that live so close to more than one distribution area. I technically live in Coke of Danville's area. Less than a mile from home is Coke from Greensboro's area. About 30 min. away in Burlington is another different distribution area. If someone asks me about certain sodas, i have to think about where I am at the time. If each company distributed only what they make, it would be a lot better IMHO.

greg
03-23-2007, 09:26 AM
A Lot of people are speculating that the break up or de-marger is actually an attempt to sell off the CS beverage business.
Every thing I read tends to lead to the reality that CS Americas Beverage side is actually a crutch to the Confectionary side of the business here in the US.
MOst believe that CS American Beverage will be a much more profitable and more valuable company to the shareholders in the end due to retention of profits and re-investment of said profits.
Dr.Pepper and & 7up are both Strong Brands along with Sunkist:The #1 selling ornage CSD in America. CSAB can thrive on its own with these drinks and other CSD's that do well in the marketplace. I see CS taking back DP.7up, Siunkist at the ends of their contracts to Coke and Pepsi and be a viable contender for market dominace in the next 10-15 years.

CitrusCola
03-24-2007, 08:59 AM
Everything that I've read seems to indicate that the C-S beverage business will be sold off to a private equity firm. More than a few such firms are already expressing interest. The consensus seems to be that C-S beverages is a sleeping giant that has some great products but has been poorly managed.

The best bet seems to be that a private equity firm buys the C-S beverage business. Next, the new owner streamlines its product line by picking out the best-selling products and one from each category (one root beer, one ginger ale, etc.), sells off all of the other products, and then attempts to sell its streamlined product nationwide. They will probably try to end contracts with Coke, Pepsi, and other distributors in order to have control of their products.

Also, I doubt if Coke or Pepsi will be buying any of the drinks that the C-S buyer decides to sell. The FTC seems to think that the market leaders already have complete product lines. More likely buyers are smaller, regional companies (like Carolina Beverages, for example).

I hope that the situation does pan out this way. The market needs more than two major players.

JACK
03-25-2007, 11:30 AM
I do not believe that CSAB has been mismanaged but that the beverages have carried the Candy group for some time. If they had been why would there be this buzz around buying them for the profits they generate. CSAB is a well run company that has OVER delivered profits back to Cadbury. CSAB provides over 60% of the profit that Cadbury generates. Fact is CSAB is a very large company that would be in the top 400 in this country and larger than many US brands

I find it interesting that many on the board think this breakup will allow CSAB to sell off brands. CSAB could have sold brands and they have. Buying and selling Slush Puppie, selling off other non beverage brands earlier this year.

Private equity is not a sure bet and Cadbury has other options including selling to another consumer goods company or still maintaining minority ownership thru an IPO or just having a full IPO.

CitrusCola
03-25-2007, 09:53 PM
C-S beverages has indeed generated a great deal of money to help support the C-S candy business, but I do not think that the beverage unit has reached its maximum potential.

While the move of setting up a C-S bottling division was a good first step, there are still many areas where C-S falls short. One good example is in fountain sales. How many fast food chains offer the C-S lineup of soft drinks? Another problem area is how they have so many overlapping products. How much extra money is needed to make Sunkist orange for one area, Orange Crush for another area, and Nehi Orange for yet another area? Also, C-S often depends on other companies to distribute their products.

Why do I think a private equity firm buyout is more likely than an IPO? The answer is money. The C-S shareholders will opt for whatever pays them the most. These equity firms see potential for a quick return on their investment should they purchase C-S beverages. That ties back into why I tend to think that some of the C-S beverages would be sold. In order to put C-S beverages onto the same playing field as Coke and Pepsi, the new owners would likely streamline the business and dispose of the redundant products. While they could pick the top-selling orange drink (as an example), Sunkist, and retire Orange Crush and Nehi Orange, such a move would produce zero income. If, on the other hand, the new owners could sell the underperforming (Nehi, Hires, Vernors, etc.) and retired (Upper 10, Kick, Chero Cola, etc.) C-S beverages, then they would have some money back to help offset their initial purchase cost and they could concentrate on selling a single product lineup nationwide.

reset man
03-26-2007, 07:47 AM
If I could add my speculation as a C-S employee, I only hope it will mean bringing more of the items we own under our own roof and selling our own products. Selling Snapple, Mistic, Nantucket, RC, A&W, Sunkist, 7UP, Canada Dry, DP, Country Time and Yoo Hoo is a great line-up to hit the streets with!!!!!!!!!!!!

greg
03-26-2007, 10:52 AM
It seems that a private equity group may be the way for CSAB currently, however, in the long run I believe an IPO would be in the best interest of the company. PE Groups like to see an ROI quickly and often make snap decisions to start seeing that return, even if it is just on paper. Furthermore, PE groups would most likely put their people in management and most decisions will be made by people looking at the immediate P & L Statement rather than the long term value of a product.
Anyone remeber the 80's when this sort of thing was considered a leveraged buyout? They can get nasty in the end and sometimes companies implode(remember Eastern Airlines).

Mr Zabe
03-26-2007, 11:12 AM
Just like Greko in that movie Wall Street. Excellent point,Greg.

CitrusCola
03-27-2007, 09:48 PM
CORRECTION: Soft Drink Sector Story - Forbes.com (http://www.forbes.com/feeds/ap/2007/03/27/ap3555548.html)

drp24/7
03-28-2007, 12:13 AM
In looking accross the brand portfolio of CSAB there is something to be said for the strength of some of the brands, where others are less than stelliar. What makes the most sense, that Pepsi should pick up all the brands currently owned by CSAB, implement some of them into its corporate set: A&W, Canada Dry, Country Time, Dr. Pepper, Hawaiian Punch, Nantucket Nectars, Sunkist, Yoo-hoo, and Snapple. I'll explain. Most of these would be to either replace existing poor performing Pepsi products, or to further expand their reach in that particular sector of the beverage market. A&W replaces Mug, Canada Dry so they could have a ginger ale, County Time, Hawaiian Punch, Sunkist would help to replace the Tropicana (a better juice play) sodas, Dr. Pepper is an obvious, Yoo-Hoo gives them a better dairy presence, Nantucket Nectars expands the juice again, and Snapple opens all kinds of opportunites in juice, tea, and energy drinks. As far as the remaining brands, Pepsi could do a fire sale of sorts, maybe Neslte Waters would have an interest in Deja Blue, Coke already bottles Schweppes so maybe they'd want to pick that up, as far as the mixers as such maybe a spirits or beer company would pick them up, and the remaining who knows. I just think that this is a logical way to appoarch it if Pepsi should want to look into acquiring CSAB.

greg
03-28-2007, 11:05 AM
In looking accross the brand portfolio of CSAB there is something to be said for the strength of some of the brands, where others are less than stelliar. What makes the most sense, that Pepsi should pick up all the brands currently owned by CSAB, implement some of them into its corporate set: A&W, Canada Dry, Country Time, Dr. Pepper, Hawaiian Punch, Nantucket Nectars, Sunkist, Yoo-hoo, and Snapple. I'll explain. Most of these would be to either replace existing poor performing Pepsi products, or to further expand their reach in that particular sector of the beverage market. A&W replaces Mug, Canada Dry so they could have a ginger ale, County Time, Hawaiian Punch, Sunkist would help to replace the Tropicana (a better juice play) sodas, Dr. Pepper is an obvious, Yoo-Hoo gives them a better dairy presence, Nantucket Nectars expands the juice again, and Snapple opens all kinds of opportunites in juice, tea, and energy drinks. As far as the remaining brands, Pepsi could do a fire sale of sorts, maybe Neslte Waters would have an interest in Deja Blue, Coke already bottles Schweppes so maybe they'd want to pick that up, as far as the mixers as such maybe a spirits or beer company would pick them up, and the remaining who knows. I just think that this is a logical way to appoarch it if Pepsi should want to look into acquiring CSAB.

I could never see this making it through the FTC. As big as Coke is and as strong as it this would great a Mega Giant soda company and a giant soda company competing for business. This would essentially create an environment where no one else could compete.

greg
03-28-2007, 11:08 AM
CORRECTION: Soft Drink Sector Story - Forbes.com (http://www.forbes.com/feeds/ap/2007/03/27/ap3555548.html)

Yes , the total sell off was/is understood. The correction was about the erroneous information stating Dr Pepper was owned by Coc Cola.

fusion
03-28-2007, 11:13 AM
Not to mention the cost of buying out all those existing bottling/distributing contracts.

Coke's about to go through that with Fuze - one of the reasons they paid a little less for the company.


Also, Coke does not bottle Schweppes everywhere. They actually own the long term rights to use the Seagram's name on ginger ale and mixers - I think most of the Coke bottling system has Seagram's.

They also have Canada Dry in some areas as well.

CitrusCola
03-30-2007, 09:57 PM
Cott already owns the rights to the Royal Crown Cola family of drinks outside of the U.S.A. I could see them making a bid to buy out the C-S carbonated drinks.

RC International - Refreshment Portfolio (http://www.rccolainternational.com/refresh/)

DrPepperYummy
04-02-2007, 02:46 PM
In looking accross the brand portfolio of CSAB there is something to be said for the strength of some of the brands, where others are less than stelliar. What makes the most sense, that Pepsi should pick up all the brands currently owned by CSAB, implement some of them into its corporate set: A&W, Canada Dry, Country Time, Dr. Pepper, Hawaiian Punch, Nantucket Nectars, Sunkist, Yoo-hoo, and Snapple. I'll explain. Most of these would be to either replace existing poor performing Pepsi products, or to further expand their reach in that particular sector of the beverage market. A&W replaces Mug, Canada Dry so they could have a ginger ale, County Time, Hawaiian Punch, Sunkist would help to replace the Tropicana (a better juice play) sodas, Dr. Pepper is an obvious, Yoo-Hoo gives them a better dairy presence, Nantucket Nectars expands the juice again, and Snapple opens all kinds of opportunites in juice, tea, and energy drinks. As far as the remaining brands, Pepsi could do a fire sale of sorts, maybe Neslte Waters would have an interest in Deja Blue, Coke already bottles Schweppes so maybe they'd want to pick that up, as far as the mixers as such maybe a spirits or beer company would pick them up, and the remaining who knows. I just think that this is a logical way to appoarch it if Pepsi should want to look into acquiring CSAB.


Pepsi is looking to buy whole companies in a category they are weak, not replace exsisting inhouse products completely... it's just not cost effective for them to replace a dozen of their soda brands buying something that would cost way too much just to get the better name brand... they would get more results pushing those products instead of making them filler's for the shelf space they got from their core flavors which is all they are...

In some areas coke sells canada dry and the local C-S bottler does schweppes so its not just a big hey lets shuffle things around and do whats right for everyone, with hundreds of distributors and contracts on various products lasted dozens of years its not something likely to happen unless an investor group looks to butcher the company down for profits.... They probably want to grow and enhance the position so the long-term equity of the products is worth more and they can get a better return by selling it off that way instead of breaking everything apart for a smaller buck.

7up was created as a result of anti-trust issues in the beverage world, so I doubt the government would even allow a large buy off of various products to those other companies, lots are already distributed by them... hawaiian punch is distributed by pepsi here, drpepper by coke/pepsi in various areas, same thing for just about every other product....

I guess the only thing I could add is I don't see a private investment group buying up other bottlers who distribute C-S products like the current ownership was doing to create a stronger presence that can get products out quicker to market and more efficiently overall, but who knows maybe they'll learn the value of whats been going on already behind the scenes and want to continue that effort to make more of a return decades from now when they'll probably want to cash out. (plus look at the soda market these days, sagging sales and trends don't put much hope for it so companies aren't going to want to buy up the top brand cause its just not going to be worth what they paid years from now.)

Wow really I could rant and rave all day, maybe I should have put together all my thoughts instead of spreading them out and double backing on some, have it lol.

fusion
04-13-2007, 04:26 PM
WSJ is reporting that Cott is interested.

CitrusCola
04-13-2007, 09:36 PM
A CS/Cott merger would provide some stronger competition for Coke and Pepsi.

Cott surges on Cadbury Schweppes rumors - Apr. 13, 2007 (http://money.cnn.com/2007/04/13/news/international/bc.cott.cadbury.reut/?postversion=2007041317)

I think such a deal would be good for customers.

greg
04-14-2007, 09:17 AM
A CS/Cott merger would provide some stronger competition for Coke and Pepsi.

Cott surges on Cadbury Schweppes rumors - Apr. 13, 2007 (http://money.cnn.com/2007/04/13/news/international/bc.cott.cadbury.reut/?postversion=2007041317)

I think such a deal would be good for customers.

Doesn't Cott make generics for major chains? how would this affect that business? Afterall, would it not be a conflict of interest if you are making sodas for the same people you now compete against?

CitrusCola
04-14-2007, 09:57 AM
I doubt if this would be considered a conflict of interest. The name brand soft drinks would be considered "premium" whereas the generics would be considered "bargain." Cott already competes against its generics in my local Wal-Mart. I've bought "premium" sodas with the Cott name on them that were alongside the "Sam's Choice" sodas on the shelf.

That said, another possibility for a merged CS/Cott would be to sell off their generics business and to concentrate on expanding the market for the "core" brands.

Terry K
04-14-2007, 10:57 AM
Doesn't Cott make generics for major chains? how would this affect that business? Afterall, would it not be a conflict of interest if you are making sodas for the same people you now compete against?

Actually ABC does private label for a number of supermarkets in the midwest including Roundy's/Pick & Save and Hy-Vee.

Rob The SURGE Drinker
04-14-2007, 01:30 PM
Actually ABC does private label for a number of supermarkets in the midwest including Roundy's/Pick & Save and Hy-Vee.
I was just going to say that, All of our Roundy's brand soda that you get in Pick-N-save is bottled by ABC. Right across the asile from the roundys are ABC bottled DPSU Products.

Paul's Beverages
04-14-2007, 11:40 PM
Cott already owns the rights to the Royal Crown Cola family of drinks outside of the U.S.A. I could see them making a bid to buy out the C-S carbonated drinks.

RC International - Refreshment Portfolio (http://www.rccolainternational.com/refresh/)

Cott reported to be in talks with investors about possible merger with Cadbury | Markets | Headline News | Canadian Business Online (http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b041319A)

You might have hit the nail on the head CitrusCola.

fusion
04-15-2007, 01:55 AM
Some of those Cott sodas are about as good as generics, though. I remember a few years back they had Stewart's-like flavors in 4pk longnecks in Wal-Mart. Marked down to $1 a 4 pack in some stores, just to clear them out.

juniorjin
04-16-2007, 04:29 AM
Personally, I think this would be better than anybody realizes.
It might finally allow schweppes to maximize its potential. Schweppes has a really strong portfolio, but Cadbury did not capitalize on its strong portfolio of brands. I never really understood why Cadbury didn't do that in the first place. Combining Orangina, Snapple, Stewarts, IBC, Motts, Welch's, Country Time, etc etc into one distribution form would have been more benefitial for each brand. I'm sure that whoever purchases Schweppes if it does go up for sale, will cast off some products, but that means someone else will undoubtably pick it up. If it's a decent product (which in most cases for Cadbury, they are), then there will always be at least a small market for it, and someone will be there to try to profit from it, however small it is.

I also disagree with the comments that Canada has 3 players. There really aren't. All if any Cadbury-Schweppes are distributed by Coke and Pepsi. Acosta Canada might be marketing the rest of the line, but it doesn't een compare to the big two.

So in NB, is it impossible to find Boylans, Stewarts, Fuze, Izze, Steaz, Pop Shoppe, Cool Mountain, Jones, Snapple....etc. etc.??
im finding in the last couple of years the selection in canada is catching up with the states for the most part....

CitrusCola
04-16-2007, 07:07 AM
This article mentions that there is speculation that Cott may "go private."

Analysts baffled by Cott-Cadbury Schweppes linkage (http://www.canada.com/nationalpost/financialpost/story.html?id=78a59922-a7a3-4751-a02a-00ac2bb50325&k=80003)

Maybe there is a private equity firm that wants to buy both CS beverages and Cott. The better parts of CS and Cott could then be combined into a new company, while the other parts could be sold.

Something to think about.

Walter
04-24-2007, 04:00 PM
What is your C-S rep saying about the future of the company?
And with it's buy-out of All American bottling , when , if any, will the logistics of operating a poorly managed company be put in place?
It seems as if the method that C-S is doing business is... a bit old!

fusion
04-24-2007, 09:18 PM
Rumors are churning again... talk of a Coke buyout of Glaceau, or Tata buying out C-S and merging it with Glaceau.

CitrusCola
04-25-2007, 07:16 AM
The idea of a private equity firm buying both C-S and Cott and combining them seems to be picking up steam.

FT.com / Mergermarket - Cadbury Beverages financing reaches 9x; could go higher, sources say (http://www.ft.com/cms/s/834744ac-f274-11db-a454-000b5df10621.html)

Cott Corporation Investor Relations (http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=COT&script=410&layout=-6&item_id=984724)

Some of what I've read indicates that potential buyers think that Cott has some facilities and/or distribution systems that will fill in gaps in the current C-S system. Does anyone know enough about the two businesses to say if that is true?