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Cott Takes Steps to Improve Results

Cott Takes Steps to Improve Results In an effort to compete against soft drink behemoths Coca-Cola and Pepsi, Cott Corp. has announced plans to rationalize its product lines and to shake up its management. Specifically, Cott will eliminate underperforming assets and focus its marketing on high-potential accounts. It's a major restructuring that is expected to cost as much as US$80 million over the next year-and-a-half. These moves take place against a backdrop that's seen the private-label soft drinks giant struggle against rising costs for plastics and aluminum, as well as changing consumer tastes away from soft drinks to lower-margin water and energy drinks. On top of this, the company's executive vice-president, Robert Flaherty, is moving on to pursue other interests. Flaherty was brought in to revive Cott's US operations nine months ago. Concurrently, Cott has announced a plan to realign its Canadian and US businesses, so its management can improve its supply-chain efficiencies and marketing efforts on a North American basis. This, say some analysts, is the response of a company to a state of being overwhelmed. Cott's shares fell 40 cents to $21 on the Toronto Stock Exchange on the day these announcements were made. Source: Canadian Grocer E-Newsletter, October 13, 2005.