just On Call - Dr Pepper Snapple Group's Ten bringing consumers back to CSDs - CEO
DPSG saw its first-half profits fall
Dr Pepper Snapple Group's CEO has claimed that its low-calorie Ten portfolio is enticing lapsed consumers back to CSDs, but admitted the category as a whole remains “difficult”.
Speaking to analysts on a conference call today (24 July), following the group's H1 results, Larry Young said that 51% of Ten's consumers were either new to CSDs, or had previously deserted the category. Young said a national roll-out of its Ten portfolio, so-called because the drinks have ten calories, is underway.
Dr Pepper Ten was launched in 2011 and the portfolio now also includes 7-UP, Sunkist, A&W and Canada Dry.
“We are achieving our goal of bringing lapsed and new users into the category,” said Young. But later he added: “We are operating in a difficult environment with limited visibility.”
The CEO also admitted that it "takes time to change people's drinking habits."
DPSG did not give specific sales figures for Ten in its Q2 results today but its CSD volumes as a whole fell 3%, while the Dr Pepper brand saw a 4% drop in volumes.
However, Young said the company is “pretty excited” about the results it is seeing for July, helped by better weather in the US. Earlier Young said the company had been affected in Q2 by “some of the coldest and wettest weather in recent years.”
But DPSG's CFO, Marty Ellen, told analysts: “We don't expect CSD headwinds to lessen.”
The CSD category in the US has been affected by the increasing debate around obesity, as many consumers look to lead healthier lifestyles.
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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