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just On Call - Dr Pepper Snapple Group targets sparkling water growth with Peñafiel ramp-up

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Dr Pepper Snapple Group's CEO has said that growing sparkling water trends are “here to stay” as the company expands Mexican brand Peñafiel in the US.

DPSG is targetting the Hispanic market with Peñafiel

DPSG is targetting the Hispanic market with Peñafiel

On a call with analysts yesterday, Larry Young denied that increased demand for Peñafiel, Schweppes and Canada Dry was a “fad”, and announced new investment in sparkling water for this year and next. He also said Peñafiel was being brought in from Mexico for Hispanic consumers in the US.

Young said: “I think it's a trend... We're putting a lot of programmes together on it (sparkling water), and we believe it's here to stay.”

On the Peñafiel programme in the US, Young added: “We're very excited about the results we're seeing to date, and we'll expand that as we go.”

In third-quarter results released yesterday, Peñafiel volumes increased 25% while Schweppes volumes were up by 8%. DPSG said a high single-digit performance from Canada Dry helped push its Core 4 (Ten, Canada Dry, Sunkist and A&W) volumes up 3%.

Cadbury Schweppes acquired Peñafiel in 1992 and has since rolled out extensions including the flavoured Peñafiel Twist in 2003 and lower-calorie Peñafiel Naturel in 2004. DPSG took control of the brand when the group was spun out of Cadbury Schweppes in 2008.

Meanwhile, Young said DPSG is well-placed to capitalise on growth in diet beverages once the industry discovers “the silver bullet” to consumer fears over artificial sweeteners. He said the company will continue to support its range of aspartame-sweetened ten-calorie beverages such as Dr Pepper Ten and A&W Ten Root Beer, as well as educate consumers that aspartame is safe. 

Young said: “There is nothing wrong with aspartame. It's one of the most tested food ingredients there is. So we've all got a lot of work to do, but it's also going to give us upside when we find the silver bullet.”


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