DPSG released its full-year results today

DPSG released its full-year results today

The CEO of Dr Pepper Snapple Group has praised the Coca-Cola Co's move into home carbonation, but warned that the industry must look out for the interests of its bottling franchises.

In an analysts' call, following today's full-year results, Larry Young said Coca-Cola's agreement to co-fund the Keurig Cold carbonation machine was “a great move”. “New ideas to the category are always good,” he said.

However, he added that “we all have a lot of work to do” on how systems such as the Keurig Cold, which uses single-serve concentrate “pods” to make CSDs in the home, affect bottlers.

“We have franchises out there and my job is to protect their equity,” Young said. “We have to look at it and see if we are doing the right things for the future on growth.”

Coca-Cola said last week it will invest US$1.25bn for a 10% share of Keurig Cold developer Green Mountain Coffee Roasters. The deal includes a ten-year agreement to use Coca-Cola-branded products in the machine, due out next year.

In the same call, DSPG's CFO, Marty Ellen, told analysts the company was focussed on creating profits despite volumes drops in its CSD portfolio. But, he warned that it is not just health concerns over full-sugar and diet sodas that the industry is contending with. 

“We have to think about what's happening to the consumer,” Ellen said. “Whether it's higher taxes or the impact of food stamp reduction, the world has changed. But what we want to demonstrate is that even on lower volumes we can make more money.”

Young also defended volumes drops in DPSG's low-calorie Ten range. 

“It may have been down but it's still above the industry,” he said. “That's one of the things we are focussed on, that we are bringing people back to the CSD category.”