Cott Corporation, together with its subsidiaries, engages in the production of beverages on behalf of retailers, brand owners and distributors. In 2014, the company completed the acquisition by merger of DSS Group, Inc. (DSS Group), parent company to DS Services of America Inc. and its subsidiaries (collectively DSS), a bottled water and coffee direct-to-consumer services provider in the United States. Segments The company’s business is operated through the following segments: North America, the United Kingdom (U.K.), All Other (which includes its Mexico segment, Royal Crown International (RCI) segment, and DSS. Products and Markets As a producer of beverages on behalf of retailers, brand owners and distributors, the company has a diversified product portfolio across beverage categories, including beverages that are on-trend with consumer demand. The company’s product lines include carbonated soft drinks (CSDs); 100% shelf stable juice and juice-based products; clear, still and sparkling flavored waters; energy drinks and shots; sports products; new age beverages; ready-to-drink teas and alcoholic beverages; beverage concentrates; liquid enhancers and freezables; and hot chocolate, coffee, malt drinks, creamers/whiteners and cereals. Intellectual Property The company owns registrations, or applications to register, various trademarks that are important to its worldwide business, including Cott and Red Rain in North America and the United Kingdom; Stars & Stripes, Vess, Vintage, So Clear, Shanstar, Harvest Classic, Chadwick Bay, Exact, Alhambra, Belmont Springs, Deep Rock, Hinckley Springs, Sparkletts, Crystal Springs, Kentwood Springs, Mount Olympus Standard Coffee and Javarama in the United States; Emerge, Red Rooster, MacB, Carters, Calypso, Mr. Freeze, Jubbly, Suso, Cafe Nueva and Ben Shaws in the United Kingdom; Stars & Stripes in Mexico; and RC mark in various formats in approximately 120 countries and territories outside of North America. Moreover, the company is licensed to use certain trademarks, such as Old Jamaica Ginger Beer and Ting in the United Kingdom. Seasonality The company’s beverage and water delivery sales are higher during the warmer months, while sales of its coffee products are higher during cooler months and also can be influenced by the timing of holidays and weather fluctuations. The seasonality of its sales volume combined with the seasonal nature of fruit growing causes its working capital needs to fluctuate throughout the year, with inventory levels increasing in the first half of the year in order to meet high summer demand, and with fruit inventories peaking during the last quarter of the year when purchases are made after the growing season. In addition, its accounts receivable balances decline in the fall as customers pay their higher-than-average outstanding balances from summer deliveries. Customers The company’s customers include national and regional grocery, mass-merchandise, drugstore, wholesale and convenience store chains, as well as customers for whom the company manufactures beverages on a contract basis. For 2014, sales to Walmart accounted for 26.1% of the company’s total revenue. The company supplies Walmart and its affiliated companies, under annual non-exclusive supply agreements, with various products in North America, the United Kingdom, and Mexico, including CSDs, clear, still and sparkling flavored waters, 100% shelf stable juice, juice-based products, bottled water, energy products, sports products, new age beverages and ready-to-drink teas. In 2014, the company supplied Walmart with all of its private-label CSDs in the United States. Research and Development The company engages in various research and development activities. Its research and development costs included $2.9 million in 2014. Strategic Alliances The company has a strategic alliance with Primo Water Corporation (Primo) to bottle and distribute Primo’s 3G and 5G water bottles through retail stores. Regulations The production, distribution and sale in the United States of many of its products are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; and state consumer protection laws, federal, state and local workplace health and safety laws. The company is a member of the International Bottled Water Association (IBWA) and the Water Quality Association. Competition The company’s principal competitor in the 3 gallon and 5 gallon home and office bottled water delivery services bottled water business is Nestle, which competes with it directly in its markets within the United States. The company also faces competition in the juice category from juice brands, such as Welch’s, Ocean Spray and Mott’s. History Cott Corporation was founded in 1955. The company was incorporated in 1955 and is governed by the Canada Business Corporations Act.
cott corporation (BCB:Toronto)
5519 West Idlewild Avenue
Tampa, FL 33634
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