Food Business News - February 24, 2015 - (Page 39)

looking at tell us we're still on the right track." Peñafiel to make U.S. debut In 2015, Dr Pepper plans to bring Peñafiel, the top selling mineral water brand in Mexico, to the United States, Mr. Young said. "Like we've told you before with our Hispanic strategy, we have found, as we go out in the market, a lot of us think we have packages and brands they want," he said. "But the Hispanic consumer is very savvy, and they want to see something from Mexico. Marty (Ellen, chief financial officer) and I were in the trade a while back where we had some of our products in our regular U.S. packaging, and the owner of the chain of Hispanic supermarkets told us they were fakes and that the consumer knew it. "Where we've brought the Peñafiel from Mexico in, the success has been tremendous. We're looking forward to bringing this in, especially into our Hispanic markets where we have our focus points. And it's still early, but I think you're going to see some great results from these." Cold partnership could be hot Mr. Young also touched briefly on the recently signed partnership with Keurig Green Mountain. The Keurig Green Mountain Kold single-serve beverage system is scheduled to be introduced later this fall, and as part of a multi-year agreement, Keurig will be the exclusive producer of singleserve pod-based carbonated Dr Pepper Snapple brands using fountain syrup in the cold platform in the United States and Canada. Mr. Young acknowledged that while Dr Pepper Snapple does not know how big the Keurig "cold" launch is going to be, "we know that it could be a very, very important channel, so we want to make sure we are there." "I think it could be a big piece into another one that we're all watching close on ecommerce," Mr. Young said. "But those two could tie very closely together, so we all want to understand that, and know where it's going to go, but most importantly, make sure that our brands are there." Capitalizing on R.C.I. F ive years ago, Dr Pepper Snapple implemented a Rapid Continuous y Improvement (R.C.I.) initiative. The initiative involves the development of Lean business practices and Six Sigma efficiencies throughout the company. The focus of the initiative was on safety, quality, delivery, productivity and growth. Today, R.C.I. "is becoming the way we do business," said Larry Young, president and chief executive officer, in a Feb. 12 conference call with analysts to discuss fiscal 2014 results. "Our lean tracks in 2014 helped us to drive growth and productivity across the business," Mr. Young said. "To name a few examples, we Lean tracks in 2014 helped Dr Pepper Snapple to drive growth and productivity across the business. Strides in packaging Coca-Cola Co., Atlanta, and PepsiCo, Inc., Purchase, N.Y., have made package innovation a priority. Dr Pepper Snapple also sees packaging playing a key role, although maybe not to the extent of its competitors in the category. "We constantly look at package innovation," Mr. Young said. "We do a lot of it by geographic territories. And with Coke and Pepsi, where we have Dr Pepper with them, we participate in those packages. So we know how they perform, and where we should have them. "You'll see some of the smaller Snapple Straight Up Teas and Hawaiian Punch pouches are among innovations planned for 2015. worked collectively with our bottling partners to improve display tie-in rates on Dr Pepper, increased distribution on single-serve juice, and streamlined our driver check-in and check-out process." Marty Ellen, chief financial officer, added that there are "opportunities everywhere" for R.C.I., and the company has a "whole slate of lean tracks for 2015." "We probably captured $20 million to $25 million of pure P&L cost improvement last year, which is probably what we've done in the couple years before that," he said. "It's just permeating the way we think, the way we do business. That's really important. When we can see the entire organization be that as its culture, we'll know we're successful." FBN packages with our innovation coming out, not only package innovation, but some of our new brand innovation, and items that we have lined up for the year. So, we look at it very closely and we take advantage of any price we can, but we also want to make sure that we have the package lineup that the consumer wants out there." Challenges ahead in 2015 While there is plenty of reason to be optimistic about the future of Dr Pepper Snapple, Marty Ellen, chief financial officer, cautioned that tough headwinds in the C.S.D. category, particularly in diets, combined with the strengthening U.S. dollar's impact on the company's businesses in Mexico and February 24, 2015 Canada will affect 2015 fullyear guidance. He said the company expects 2015 net sales will be up approximately 1%, net of a foreign currency headwind of 1%. "With 80% of our volume in C.S.D.s, total company sales volume is expected to be flat, with C.S.D.s down slightly, offset by growth in our non-carb portfolio and allied brands," Mr. Ellen said. "On a total company basis, we expect combined price and mix to be up about 2%. Our Jan. 1 concentrate price increase will drive about 40 basis points of this increase, and the remainder will come as a result of growth in our higher-priced non-carb and allied brands." FBN - Eric Schroeder FOODBUSINESS NEWS ® 39

Table of Contents for the Digital Edition of Food Business News - February 24, 2015

Food Business News - February 24, 2015
General Mills accepts the C.P.G. challenge
Gluten-free front and center
Mexican trade rift looms over Sweetener Colloquium
Table of Contents
Web Contents
Editorial - Subscription models may offer unique marketing opportunities
Confectionery companies switching to simpler ingredients
McCormick to acquire Italian spices and seasonings company
Mondelez has big plans to grow small platforms
WhiteWave Foods ‘busting at the seams'
More c-suite change at Kraft Foods
Keurig in transition
Mondelez acquires Enjoy Life Foods
Innovation paying for PepsiCo
TreeHouse Foods trims expectations
Kraft cleans up Capri Sun
Washington - Federal bills seek to mandate G.M.O. food labeling
Company Profile - Dr Pepper Snapple Group seizing opportunities
Capitalizing on R.C.I.
Ingredient Innovations - Clean label starches get tougher
Are clean labels and G.M.O. ingredients compatible?
More clean label ingredient opportunities
Dairy Business News - Yogurt, the next generation
New Food Products
Ingredient Market Trends - Belt-tightening time for U.S. agriculture in 2015-16
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 24, 2015