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Dr Pepper Snapple Group stands out among beverage giants

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Overview

Dr Pepper Snapple Group (DPS) is a leading producer of nonalcoholic beverages. The company’s product line-up comprises flavored carbonated soft drinks (or CSDs) and noncarbonated beverages like ready-to-drink teas, juices, juice drinks, water, and mixers. Headquartered in Plano, Texas, the company has 22 manufacturing and bottling facilities in North America and over 100 warehouses and distribution centers.

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Competitive position

The nonalcoholic beverage industry is dominated by two beverage giants: Coca-Cola (KO) and PepsiCo (PEP). According to Beverage Digest, in 2013, Coca-Cola and PepsiCo held 42.4% and 27.7% of the US CSD market share, respectively, based on volume. Dr Pepper Snapple has stood out among beverage giants by emerging as the third-largest US soft drink maker with a market share of 16.9%.

Domestic player

In contrast to Coca-Cola and PepsiCo, which have extensive international presences in over 200 countries, Dr Pepper Snapple is predominantly a domestic player. In 2014, the company derived 88% of its sales from the US market. Canada as well as Mexico and the Caribbean accounted for 4% and 8%, respectively, of 2014 sales.

Apart from the beverage giants, National Beverage (FIZZ), Cott Corporation (COT), and Monster Beverage (MNST) are also key stocks in the industry and part of the consumer staples sector. Beverage companies like these account for 19.9% of the holdings of the Consumer Staples Select Sector SPDR Fund (XLP) as of February 26, 2015.

So, how did Dr Pepper Snapple perform in 4Q14? Has it impressed analysts and investors? Find out in this series.

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