Dive Brief:
- Dr Pepper Snapple Group reported first quarter net income of $177 million, a drop from the $182 million the same time last year.
- Sales for the company were slightly up, coming in at $1.51 billion for the quarter, compared to $1.49 billion year-over-year.
- The company’s non-carbonated beverage portfolio was down 6% in the quarter, while its carbonated beverage revenue increased 1%.
Dive Insight:
Not surprisingly, the biggest gains came from the company's newest acquisition: Bai Brands, the antioxidant superfruit power drink. By itself, Bai increased 80% following the company's acquisition and the growth it provided through distribution. While industry experts questioned the $1.7 billion price tag on the brand, Dr Pepper Snapple's investment is paying dividends already. If this kind of meteoric growth continues, the drink company can successfully reinvigorate itself as consumer tastes and preferences change.
More growth came with similarly growth-targeted brands, including BODYARMOR, Core and Fiji. These grew 33% in the most recent report. However, Snapple and Hawaiian Punch posted declines.
Although soda sales have seen a decrease industry-wide of late, the company saw its carbonated soft drinks revenue increase 1%. The increase was driven by the fountain foodservice business, with Canada Dry posting a 5% and Schweppes increasing 8%. Even its signature Dr Pepper brand increased 1%, reversing a sales trend that has been plaguing it in recent quarters.
Larry Young , DPS’ president and CEO, said in the report that the company used its strategy to unlock growth across its priority brands through integrated communication and execution. This came through in the carbonated beverage segment.
Net sales grew 2%, including the Bai acquisition, which accounted for about 1 percentage point of its net sales growth overall.