In 1995, global conglomerate Cadbury Schweppes bought Dr. Pepper followed by the acquisition of the Snapple Beverage Group in the year 2000.
Eight years later, Dr. Pepper Snapple Group (DPSG) emerged as a standalone company listed on the New York Stock Exchange. This occurred as a result of a spin-off by Cadbury Plc, the holding company of Cadbury Schweppes, which was by now known as the Cadbury Schweppes Americas Beverages group.
In 2017, DPS was large enough to acquire Bai Brands LLC. This acquisition added products such as antioxidant infused enhanced waters, carbonated flavored waters, coconut water and premium teas to the DPS portfolio. In 2018, DPS merged with Keurig Green Mountain to form Keurig Dr Pepper.
“We do things with flavor”
Headquartered in Plano, Texas, USA, DPS is one of North America’s top producers of flavored beverages offering over 50 brands of carbonated soft drinks, premium beverages, juices, waters, teas and mixers, catering to the North American and Caribbean markets.
It has an excess of 20, 000 employees working all over the country. Its end-to-end business model begins with innovation and ends on the store shelves, ready for consumption.
SWOT Analysis of Dr Pepper
In the article we will perform swot analysis by discussing the key strengths, weaknesses, opportunities and threats of Dr Pepper Snapple Group.
Key Strengths of Dr Pepper
High Brand Recognition and Strong Reputation
Owing to its wide sales plus distribution network and healthy, low calorie product line, Dr Pepper is a well-known and respected brand. It also has a good reputation among its employees owing to its balanced lifestyle policies. The company aims to maintain its healthy and happy theme across all aspects of business, including customer satisfaction in which it rates quite high. This brand positioning has worked well and continues to, among the growing section of health-conscious individuals. Added to which, the company has an active Corporate Social Responsibility program that focuses on environment sustainability.
Diverse and Wide Product Mix
As a result of some sensible acquisitions, Dr Pepper has a wide product line that caters to a vast audience. Snapple specifically covers the juice and tea genre while Dr. Pepper which is the flagship brand offers 23 unique flavors of beverages. Taking over Bai brands resulted in a completely new set of nonalcoholic drinks in the form of coconut water, antioxidant waters, premium teas and additional carbonated water drinks. Other strategic moves that contributed towards adding and refreshing the product line was with Canada Dry and then 7UP. Hence, Dr Pepper Snapple boasts of one of widest range of beverages in the world, offering it a strong foothold in the North American market.
Bottling Contracts for Major Beverage Players
Dr Pepper handles the bottling and distribution of beverages for some top players in the industry. These include All American Bottling Co., Davis Bottling Co, Southeast-Atlantic Beverages Corp. and of course, Dr. Pepper/7UP Bottling Co. This line of business is a major contributor to Dr. Pepper’s overall business and industry standing.
Key Weaknesses of Dr Pepper
Too Many Products
Presence in a multiple product lines, has proved to be a deterrent for Dr. Pepper. Individual positioning of products is vague, and this has caused competition to overpower DPS in most product areas within their mix. International brands with focused positioning and marketing are dominating the market.
Lack of Technology
Being an old company, DPS has been slow in adopting technology in its processes. There is a lack of integration between products and less usage of analytics or data in the past to further grow the business.
Lack of Control in Distribution Channels
More than half of DPS’s distribution is conducted by bottlers that are affiliated with rivals – Coca Cola and Pepsi. There are too many third-party retailers eating into profit margins. DPS also has low awareness and almost no presence in international markets.
Parent Company has less Control
Dr Pepper, as the parent company, has limited say in decision making at the brand level due to limited shares in the current brands in the DPS portfolio. This is adding to the problems of managing the many brands in a unified manner.
Key Opportunities of Dr Pepper
Healthy Product Line
A steady focus on Dr. Pepper’s healthy offerings is a step in the right direction. It’s an advantage over competition and the best strategy to enter emerging markets such as China, India and Malaysia. The addition of antioxidant waters, teas and coconut water to the product mix holds immense potential. By 2025, DPS claims to reduce beverage calories in all its drinks by 20%, per consumption.
The company is working towards securing international licenses for many new markets that present a range of opportunities. Government free trade policies and the adoption of technologies will facilitate this growth and help boost market share.
Large Investment in utilizing online channels have opened up the brands to the younger customer base of millennials. DPS is now ready to tap the massive online buying segment for all its brands.
Key Threats of Dr Pepper
Pricing is a problem area for DPS. Competitors Coca Cola and PepsiCo managed to remain profitable with clever pricing strategies even during bad market situations.
A weak distribution system causes a lack of Dr Pepper products reaching retail outlets, for consumers to view and buy.
Lack of Marketing
Dr. Pepper occupies third place in the global beverage market. The two victors – Coca Cola and Pepsi have massive marketing budgets. In fact, Coca Cola and Pepsi are known to produce some of the most expensive ads even known.
Conclusion: SWOT Analysis of Dr Pepper
Dr. Pepper and its diverse product portfolio has great potential. The futuristic vision of healthy beverages is one that can help the company make the right splash on the international scene. It is also an apt differentiator which can help DPS to stand apart and build its own against beverage giants Coco Cola and Pepsi.
Today, marketing and selling have been simplified with online mechanisms. The quicker DPS is able to adopt technology with all its benefits, the easier it will be for the company to tackle competition and boost their market share.
Image by Aaron Holmes