Dr Pepper Snapple Group
), recently entered into an agreement with
Buffalo Wild Wings, Inc.
) to offer DPS drinks at all Buffalo Wild Wings restaurants by
BUFFALO WLD WNG (BWLD): Free Stock Analysis
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Dr Pepper Snapple owns some of the most popular flavored
(non-cola) carbonated soft drinks (CSDs) and non-carbonated
beverages (NCBs) including ready-to-drink teas, juices, juice
drinks and mixers. However, Dr Pepper Snapple as well as other
soft drink companies like
The Coca-Cola Company
) have been seeing sluggish volume growth for their high calorie
soft drinks. Sales of these drinks have been hurt by changing
consumer preferences, increasing health consciousness, rising
obesity concerns, possible new taxes on sugar-sweetened beverages
and growing regulatory pressures. In fact, Dr Pepper Snapple
witnessed year-over-year volume decline in the first three
quarters of 2013.
Buffalo Wild Wings offerings are marked by strong flavors, which
perfectly complement the beverages from Dr Pepper Snapple.
Moreover, given the huge consumer base of Buffalo Wild Wings, the
recent agreement will help Dr Pepper Snapple strengthen its
volumes in the upcoming quarters.
Buffalo Wild Wings is popular among sports fans for its
dine-and-watch games facility. In first quarter 2014, management
indicated that all major sporting events are scheduled the same
way as in the year-ago period with the addition of Winter
Olympics. This would likely improve guest traffic, which will in
turn boost sales.
Dr Pepper Snapple presently has a Zacks Rank #4 (Sell), whereas
Buffalo Wild Wings carries a Zacks Rank #2 (Buy).