Dr Pepper Snapple Group
) recently entered into a deal to buy back distribution rights
for several of its brands for certain parts of Asia-Pacific from
Mondelez International, Inc.
Dr Pepper has bought back distribution rights of its Snapple
beverage line in Australia, Malaysia, Singapore, China, Hong
Kong, Japan and South Korea. In addition, Dr Pepper will
henceforth distribute Mott's, Mr & Mrs T, Clamato, Mistic,
Holland House and Yoo-hoo brands in Australia.
Dr Pepper lacks significant exposure outside the U.S. The
company mainly operates its business in the U.S., Canada and
Mexico, which are experiencing saturation. It thus lacks exposure
in the fast emerging markets where demand is growing and health
consciousness is comparatively less than the western countries.
This is a significant competitive disadvantage for Dr Pepper
versus its peers like
The Coca Cola Company
), which are fast expanding and exploring markets outside the
U.S. Deals like the above will help Dr Pepper gain foothold in a
growing market and thereby increase popularity of its brands
outside the U.S.
Terms of the deal remain undisclosed. Management does not
expect the transaction to have any material impact on 2013
Last week, Dr Pepper acquired a bottling company in the
western part of U.S. The bottler, Dr. Pepper/7-UP Bottling
Company of the West is based in Reno, Nev.
Dr Pepper carries a Zacks Rank #4 (Sell), following dismal
fourth-quarter results announced last month. Dr Pepper missed the
Zacks Consensus Estimates on both revenue and earnings. While
revenues grew 2% year over year, earnings declined 2.4% as decent
sales growth was offset by weak profits.
DR PEPPER SNAPL (DPS): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
MONDELEZ INTL (MDLZ): Free Stock Analysis
PEPSICO INC (PEP): Free Stock Analysis Report
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