Food Business News - March 12, 2013 - 15

Cott to add more diverse products and packages

MIAMI — Despite its large scale as a
manufacturer of beverages for others,
Mississauga, Ont.-based Cott Corp. does
not participate in a number of product
categories. Expect that to change, albeit
slowly, the company’s chief executive
officer told participants at the Deutsche
Bank dbAccess Consumer, Retail, Gaming and Lodging Conference held March
6 in Miami.
“We don’t have any pouches,” said Jerry
Fowden, c.e.o. of Cott, which makes more
than 200 bottled water, juices, ready-todrink teas, and energy and sports drinks at
approximately 20 beverage production facilities in North America and six overseas.
“We don’t have any Tetra-brick cartons.
We don’t have any glass lines. We don’t do
liquid enhancers, MiO-type products. And
therefore, I think people should expect, in
no mad panic, in no big rush, in no massive
tons of cap-ex, because I think you’ve seen
our conservative, constrained approach to
these things. People should expect that, as
time passes, we will continue to add those
more diverse products and packages to
our manufacturing make-up so that we
can be an even better one-stop shop for
our customers.”
Mr. Fowden said Cott in recent years
has told its customers “no” when they ask
whether Cott may make a pouch product
or MiO-type water enhancer. Those “nos”
soon will change to “yes.”
He said Cott recently bought its first
two pouch fillers from a company that entered bankruptcy a few months ago. The

equipment is being refurbished, and Cott
hopes to begin offering pouch products
by September.
Cott also is installing a liquid enhancer
line that should be ready by May or June.
Cott’s approach to liquid enhancers will be
different than those currently on the market, Mr. Fowden said.
Although the company will be able to
make a liquid enhancer similar in size to
the 1.5-oz MiO, Mr. Fowden said he believes Cott may capture another market
with a “family size” product that offers
about four times the amount as MiO at
about the same price.
“MiO is what I would call a ‘handbag product,’ but actually what
about the gym bag? What about
the office drawer? What about the
fridge at home for all the kids, etc.?
So, we’ll have this available to be
sold from around July this year and
our smaller size starting around
May,” he said.
In addition to new product categories, Cott also plans to launch
several new products later this
year, including Clear Choice Ice
and AquaMist.
“These are different versions of
that purified water, antioxidants,
green tea extracts, a nice flavor profile across things like orange and mango,
strawberry and kiwi, etc.,” he said. “That
product will be in 60%, 70% of our customer base by the time we get to the middle of
this year.”
Asked by an analyst whether Cott would
consider moving away from 2-liter bottles
to 1.25-liter bottles, like many of the big
branded players have done, Mr. Fowden replied that Cott would “be a little bit careful
and cautious.”
“The reason the national brand
players are introducing things like
1.25- and 1.5-liter is they no longer
want to sell their national brands at
$1 or 99c for 2-liter, because they

can’t, with inflation, make the kind of
margins they need,” he said. “Therefore,
seeing their 2-liter up much more often
in the $1.25 to $1.50 mark with private
label next to it at 84c I don’t think is a
bad comparison compared to 84c versus
a promoted 98c. So, I can see exactly why
they are going for hidden pricing through
opaque-pack proliferation. That’s a good
strategy for their business I would support, but I’m not so sure that’s something
today we need to follow, because there
is an advantage in seeing 2-liter private
label versus a more expensive 2-liter national brand in terms of very easy consumer price comparison.
“If we do need to do more smallpack and other pack sizes, we can.
We did put a load of eight-packs
into our largest customer at $1.97,
I think, retail just to hit that sub-$2
retail last year. I’m not so sure all of
our post-event analysis shows we’ve
really gained anything out of that, a
la giving less space to more s.k.u.s
(stock-keeping units), so some of
those we’re going to convert back,
some of those we’re going to leave.
But, we have the capability to do it.
I just don’t think we should rush it.”
Mr. Fowden also was asked
whether there is a “magic complete
replacement natural sweetener” in the market yet, and whether PepsiCo’s switch in
sweeteners earlier this year may be a volume driver for the industry. In his opinion,
no “magic” replacer exists yet, and the industry is likely to rely on blends for a while.
“They (new naturally artificial sweeteners) don’t taste the same,” he said. “Therefore, I think this will be an ongoing gradual
development, new s.k.u.s, new line extensions, new flavors, where the people that
are really interested in that, yes, with a different flavor profile, will have an additional
option. I think we’re a ways off from a ‘you
can’t notice the difference’ all-natural artificial sweetener.” FBN

Dunkin’ Brands makes changes in leadership
CANTON, MASS. — John Costello, Bill
Mitchell and Paul Twohig have been named
to president positions at Dunkin’ Brands
Group, Inc.
Mr. Costello has been named president
of global marketing and innovation, and
he will continue to head global marketing,

March 12, 2013

product development and channel businesses across both Dunkin’ Brands and
Baskin-Robbins.
Mr. Mitchell has been named president of
Baskin-Robbins U.S. and Canada and will
head the Baskin-Robbins operations team.
Mr. Twohig has been named president of

Dunkin Donuts U.S. and Canada. He will
lead the Dunkin’ Donuts operations, franchising and development teams.
The company also named Scott Murphy
as senior vice-president and senior supply officer. He was previously in charge of
Dunkin’ Donuts global supply chain. FBN

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Food Business News - March 12, 2013

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