Dive Brief:
- Dr Pepper Snapple Group posted a 3% increase in net sales to $1.68 billion for the third quarter, according to the company's earnings report released Thursday.
- Quarterly EPS came in at $1.29, with a $0.09 tax gain, compared to $1.05 per share in the prior year period. The company also reported core EPS of $1.17, an 8% increase over a year ago. Total profit for the quarter was $217 million.
- Dr Pepper Snapple may also be in the running to acquire Bai Brands, people familiar with the matter told Reuters this week.
Dive Insight:
Dr Pepper Snapple has had different successes with growth in its portfolio. While PepsiCo and Coca-Cola have posted better gains from its noncarbonated drinks. DPS's carbonated soft drinks (CSDs) saw a 2% uptick, and non-carbonated beverages (NCBs) were flat. BCS volume increased 2%.
But as other soda makers expand into new non-carbonated categories, Dr Pepper Snapple will want to keep pace if not get ahead of the game with different investment, acquisition and distribution deals. The company has been on this path since upgrading its distribution agreement to a $15 million minority stake in April 2015. Taking this route from investment to acquisition is becoming increasingly popular among major manufacturers, which may be able to lock in a better price for the acquisition later on.
The potential acquisition of Bai Brands by Dr Pepper Snapple could make it more competitive against its larger global counterparts and by continuing to diversify its non soda alternatives. The acquisitive strategy also makes sense for Dr Pepper Snapple, since its strong domestic sales protect the company from the currency exchange struggles that Coca-Cola and PepsiCo grapple with each quarter.