just Five Years Ago: Dr Pepper Snapple Group's NYSE debut
DPSG has enjoyed mixed fortunes since its inception as a stand-alone company
Five years ago this week, Dr Pepper Snapple Group began trading as a stand-alone entity on the New York Stock Exchange. The move to becoming a separate publicly-traded company was the result of it being spun off by its owner Cadbury Schweppes.
On the day DPSG started trading in New York, just-drinks' Chris Brook-Carter noted that it was an inauspicous debut, with investors seemingly "unconvinced of its potential".
So how has it fared since?
Three months after its demerger, the group announced it was moving into the US energy drinks market, with the launch of Venom. Later that summer, the company announced it had acquired a miniority stake in low-calorie energy drink Hydrive.
DPSG went on the acqusition trail again in August 2008, when it took a minority stake in soda firm Big Red. In December that year, the group got a boost as investor Nelson Peltz upped his stake in the company.
However, later that month, the company, which claims Dr Pepper is the "oldest soft drink" in the US having been invented in 1885, reported a full-year net loss of US$312m due to write-down charges relating to a weakening performance in its fourth quarter.
By 2010, DPSG was back in the black, reporting net profits of US$555m from 2009 trading. However, this did not stop CEO Larry Young expressing his concern over the threat of legislation around soft drinks. In June, the group pocketed $715m after agreeing a distrbution deal with The Coca-Cola Co in the US and Canada. Later that month it pledged to introduce more low-calorie drinks and smaller pack sizes to reflect the growing demand for healthier products.
However, the group's fortunes did not improve as it reported that net profits in 2010 slid by around 5%. Things did not improve in the first half of 2011 either. In October, the group launched a push behind its new ten-calorie drink Dr Pepper Ten.
For the 2011 full-year, the group increased its profit, off the back of rising sales. But a year later profits slowed slightly, with CEO Young saying the CSD category needed "invigorating". Young also showed a touch of defiance over the increasing threat over health concerns.
In its latest Q1, DPSG saw profits up, but volumes slide.
With it reliance on US markets, its new Ten range so far failing to hit the mark and the pressure on CSD volumes, DPSG may struggle for some time to come.
It's always fun for us to write up the opinions of industry observers when they posit that the next wave of consolidation in one sector or another is set to break some time soon....
This month, Tom Vierhile from Datamonitor looks at the small but booming soft drink sub-category of 'flavour enhancers'; the 21st Century's answer to the squashes and cordials of yore....
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