Dr Pepper Snapple

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Dr. Pepper Snapple Group: Energy Brands I. In 2007, Andrew Barker is charged with assessing whether or not a profitable market opportunity exist for a new energy beverage brand to be produced, marketed, and distributed by the company in 2008. The decision to explore a new energy beverage is part of a corporate business strategy, which aims at focusing on opportunities in high-growth beverage businesses. As part of this strategy, Dr Pepper Snapple Group, Inc. has previously launched the AcceleradeRTD brand, a ready-to-drink sport drink. Andrew Barker believes that the decision to introduce the AcceleradeRTD brand into a new beverage market for the company (sport drinks) is similar to the situation he faced with recommending whether or not Dr Pepper Snapple Group, Inc. should introduce a new branded product into the energy beverage market. II. Dr Pepper Snapple Group is an integrated brand owner, bottler, and distributor of nonalcoholic beverages in the US, Mexico, and Canada. In 2007, 89% of the company’s net sales were generated in the US, 4% in Canada, and 7% in Mexico and the Caribbean. In the US and Canada, Dr Pepper Snapple Group, Inc. participates primarily in the flavored carbonated soft drink (CSD) market segment. In the non-CSDmarket segment in the US, the company participates primarily in the ready-to-drink teas, juice drinks, and mixer categories. The energy drink market in the US is the 4thlargest nonalcoholic beverage category, after carbonated soft drinks, sport drinks, and bottled water, but is the fastest growing one. The market is defined by major brands, including Red Bull, Monster Energy, and Rockstar. From 2001 to 2006, total energy beverage retail sales grew at an average annual rate of 42.5%. However, industry analysts project an average annual growth rate of 10.2% from 2007 to 2011, which is attributed to market maturity, increased

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