Pepsi shouts, "ME TOO!" at Dr. Pepper Snapple Group
Well Well.... After 1 year's full of Anti-Dr. Pepper Snapple Group naysayers having their way with DPS...Getting to see how correct they are as DPS's share price plummeted for a full year to $12 a share....
My Long term, retirement stock.....one of which I now carry 426 shares.... That's over an $8 grand stake and I still consider myself to be somewhat NEWBIE-ish to the market.
Turns out that PEPSI wants to buy out their Bottlers... and do a "ME TOO!" in terms of Dr. Pepper Snapple Group owning their bottling companys as well.
So many Hedge Funds like "TRIAN FUNDS" came out against DPS owning their bottlers.
When a press release was issued by TRIAN FUNDS that they were raising their stake in DPS while demanding that the management team dump their bottlers or be forced out by a change in directors....
I got steamed up and incredibly pissed off. I contacted Dr. Pepper Snapple Group A.S.A.P. and said:
"This is a BEAR market and during a BEAR market there is no way your Bottlers will survive as separate companies. Please don't agree with TRIAN FUNDS to dump your bottlers when they need you more than ever. If your bottlers go under after spinning them off then where will you be?"
Seriously...pissed off.... dumping your bottlers is never a good thing when times are tough for the beverage industry. So... I guess I can gaffaw...gaffaw... and basque in the glory of knowing that PEPSI agrees with the great "VARCHILD2008" that bottlers are a beverage company's best friend.
BUY....OWN....YOUR BOTTLERS... Don't kick them to the dirt and hope for the best while the bottlers suffer under Bear Market, Volume declines.
Sure... There isn't much revenue in the bottling industry compared to the syrup industry....But their is a fundamental benefit in having complete control over your bottlers. You can have bottlers wallow in debt until they go under... Or if you control them then you can control costs, perform Lean Six Sigma efforts across the board....and basically keep those bottlers chugging along during even the worst of the BEAR MARKET economy.
Ultimately.... It is far more expensive to have to replace a Bankrupt Bottler.... Than it is to own them.
If Coca-Cola doesn't own their bottlers..... I expect they will jump on board the DPS / PEPSI bandwagon.
TRIAN FUNDS 0