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Dr Pepper Snapple Group set to construct distribution/production center in California

BY Jenna Duncan

PLANO, Texas Dr Pepper Snapple Group today announced the finalization of a plan to build a distribution/production plant in Victorville, Calif.

The company said that the new $120 million facility will be built at Southern California Logistics Airport at the site of former George Air Force Base. This area was selected for its access to air, ground and train shipping services.

The site will feature an 8,500-acre “multimodal freight transportation hub” and a plant housed within an 850,000-square-foot building sprawling 57 acres. The company plans to employ more than 200 people at the plant, making it the largest Dr Pepper Snapple Western locale.

Construction of the distribution/production center will begin in October. The company plans to have the doors open by early 2010. When completed, the plant will have the ability to produce about 40 million cases of product each year. The company said that covers about 20 percent of the United States.

At the new operation in Victorville, Dr Pepper Snapple said it will produce soft drinks, juices, energy drinks, ready-to-drink teas and other premium beverages. The Dr Pepper Snapple Group owns more than 50 beverage brands including Dr Pepper and Snapple brands; the company’s portfolio includes A&W, Canada Dry, Hawaiian Punch, Schweppes, 7UP and Yoo-hoo.

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Hershey tuning its ears to customer comments, sets plan for long-term net sales boost

BY Jenna Duncan

HERSHEY, Pa. The Hershey Co. said it will announce its plan for meeting long-term for net sales goals and increasing earnings per share growth today. The company said that a new plan was developed after Hershey completed a market structure/category segmentation review. The company will also realign its plans to focus on the interests of key consumer segments to help drive growth.

Hershey said it is readjusting its resources and plans to beef up its advertising by about 20 percent in 2008 and 2009. A focus will be directed on core brands currently generating around 60 percent of the company’s U.S. net sales.

“Our extensive consumer research validates our strategy of increasing advertising and consumer investment behind the core U.S. brands that offer the greatest potential for growth,” David J. West, president and chief executive officer said. “We will combine this focused approach with consumer-centric innovation and continued international expansion to achieve our long-term net sales growth rate of 3 to 5 percent. Longer term, as marketplace trends improve and targeted consumer initiatives are executed, the Company expects to generate earnings per share growth of 6 to 8 percent.”

Hershey has said that it estimates its total net growth for 2008 to be at around 3 to 4 percent. Earnings per share were expected to be around $1.85 to $1.90. Hershey’s management planned to discuss the new strategy and long-term goals at a meeting with investors earlier this morning.

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Nestle says it will keep its prices steady

BY Jenna Duncan

VEVEY, Switzerland Due to a price ceiling hit by rising costs of commodities, Swiss food maker Nestle will most likely not raise prices of its products any higher in the near term, the company’s chairman said Sunday.

“You are now seeing the impact of price increases which were done some months ago,” Peter Brabeck-Letmathe, Nestle S.A. chairman, said to Dow Jones Newswires. “I would expect [the rising costs of foods] to flatten out over the next several months and not increase anymore as our costs have come down.”

Brabeck-Letmathe was in Malaysia attending the World Economic Forum on East Asia. He said “the worst is probably past” for surges in the costs of raw ingredients such as milk, coffee, salt and cocoa.

Brabeck-Letmathe also said that his company will probably not make any acquisitions any time soon because there aren’t many attractive deals in the horizon. He also reported that Nestle doesn’t have a firm decision to sell its 29 percent hold in L’Oreal, however, it may review the idea some time next year.

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