Dr. Pepper Snapple Group, Inc.
Dr. Pepper Snapple Group, Inc.
1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?
§ Five dominant competitors: Red Bull, Hansen Natural (Monster), Pepsi (Sobe Adrenaline Rush, AMP), Rockstar, and Coke (Tab, Full Throttle)
§ $6.2 billion industry in 2006
§ Grew at a rate of 42.5% from 2001 to 2006, 10.2% from 2007-2011
Consumers limit their choices to only 1.4 different brands indicating brand loyalty § Red Bull, Hansen, Pepsi, Rockstar, and Coke accounted for 94% of dollar sales and unit sales
§ Heaviest users are males ages 12 to 34; 43 million total US energy beverage users
§ 153 million cases of energy beverages were sold during 2006 (5.5 billion 8 oz. cans)
§ Off-premise retail channel dominated by convenience stores and supermarkets; department stores like Wal-Mart seeing an increase in their share of sales
i. “Energy beverage manufacturers with a broad product line and an extensive distribution network have had the greatest success in gaining shelf space in supermarket and mass merchandisers for their brands”
§ DPSG
i. Flavored carbonated soft drink (CSD) market segment
1. Dr. Pepper, 7UP, Sunkist, A&W Root Beer, Canada Dry ii. Non-CSD brands
1. Snapple, Mott’s, Hawaiian Punch, Clamato iii. 18% share of CSD market in 2007, a 1.62% increase from the previous year iv. No. 1 flavored CSD company in the US; Dr. Pepper is No. 2 flavored CSD in the US, Snapple is leading ready-to-drink tea
v. Integrated business model; bottling and distribution
1. Broad geographic coverage vi. No. 3 in all beverage markets in North America vii. Does not participate in bottled waters or colas viii. Focused on high growth, high margin categories
2. Does your characterization bode well for a new energy beverage brand introduction generally and for Dr. Pepper Snapple Group, in particular?
§ With five competitors with approximately 94% of the market share,
1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?
§ Five dominant competitors: Red Bull, Hansen Natural (Monster), Pepsi (Sobe Adrenaline Rush, AMP), Rockstar, and Coke (Tab, Full Throttle)
§ $6.2 billion industry in 2006
§ Grew at a rate of 42.5% from 2001 to 2006, 10.2% from 2007-2011
Consumers limit their choices to only 1.4 different brands indicating brand loyalty § Red Bull, Hansen, Pepsi, Rockstar, and Coke accounted for 94% of dollar sales and unit sales
§ Heaviest users are males ages 12 to 34; 43 million total US energy beverage users
§ 153 million cases of energy beverages were sold during 2006 (5.5 billion 8 oz. cans)
§ Off-premise retail channel dominated by convenience stores and supermarkets; department stores like Wal-Mart seeing an increase in their share of sales
i. “Energy beverage manufacturers with a broad product line and an extensive distribution network have had the greatest success in gaining shelf space in supermarket and mass merchandisers for their brands”
§ DPSG
i. Flavored carbonated soft drink (CSD) market segment
1. Dr. Pepper, 7UP, Sunkist, A&W Root Beer, Canada Dry ii. Non-CSD brands
1. Snapple, Mott’s, Hawaiian Punch, Clamato iii. 18% share of CSD market in 2007, a 1.62% increase from the previous year iv. No. 1 flavored CSD company in the US; Dr. Pepper is No. 2 flavored CSD in the US, Snapple is leading ready-to-drink tea
v. Integrated business model; bottling and distribution
1. Broad geographic coverage vi. No. 3 in all beverage markets in North America vii. Does not participate in bottled waters or colas viii. Focused on high growth, high margin categories
2. Does your characterization bode well for a new energy beverage brand introduction generally and for Dr. Pepper Snapple Group, in particular?
§ With five competitors with approximately 94% of the market share,