Monday, June 16, 2008

Cott returning to roots

Cott, the private-label soft drink supplier for numerous retailers (most prominently Wal-Mart), seems to be looking to re-emphasize that portion of their business, after making a go at other products:
... the Canadian company, known for making beverages for big retailers such as Wal-Mart Stores Inc. (WMT) and Loblaw Cos. (L.T), said it will host a conference call Thursday to discuss initiatives to "refocus the company on retailer brands."

That was precisely Cott's core business until Brent Willis came aboard as president and chief executive in 2006, bringing along a strategy to reduce reliance on soft drinks and expand into better-selling energy drinks, teas, and vitamin-enriched water.

While a loss of focus on the core business may have been a part of the problem, they had problems with the core as well -- a major blow came a few months back when Wal-Mart announced plans to cut back on shelf space for their Sam's Choice products, manufactured by Cott.

As I noted in this post, it's never a good idea to allow one account to become 40% of your business, as Wal-Mart had become for Cott. In Cott's case, it cost the CEO his job.

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