Supply chain efficiency puts pep into Dr Pepper's profits

21 February 2011
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21 February 2010 | Angeline Albert 

A productive supply chain helped push up profits at drinks manufacturer Dr Pepper Snapple Group.

The group, which has published its fourth quarter and full year 2010 financial results, said supply chain efficiencies helped boost its segment operating profit (SOP) by 3 per cent “reflecting net sales growth and supply chain productivity benefits”.

For 2010, net sales rose by 2 per cent, when compared to the previous year. Overall the beverage group’s net sales were up by 4 per cent for the quarter and efficiencies were made despite higher costs. 

The group said supply chain productivity benefits were “partially offset by a [£11.7 million] $19 million increase in marketing, higher packaging, ingredient and transportation costs”. They were also affected by “higher LIFO-related [last-in-first-out] inventory provisions”. This inventory costing method assumes the last items placed in inventory are the first sold during an accounting year.

Reported income from operations for the quarter was $268 million (£165 million) compared to $251 million (£155 million) in 2009.

Group president and CEO Larry Young said the company accomplished a lot in 2010. “Strong innovation, the national launch of Sun Drop and continued marketplace investments, gives me great confidence in our ability to grow and enhance the returns of this business in 2011 and beyond," he added.

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