CADBURY SCHWEPPES : UNFINISHED BUSINESS

However Americas Beverages is sold or demerged, it will be unfinished business. Cadbury Schweppes will leave its American operations in stronger shape than before. But whoever takes them on will still be number three to Coke and Pepsi, with relative weakness in some of the higher margin and faster growth sectors. The gaps will need filling. Moreover, the bigger brands cannot avoid the question of international potential. Schweppes is already owned by other companies in most countries, as is 7 UP. Snapple may have the widest opportunity. Dr Pepper and others could be good candidates for expansion too. There will also be unfinished business for the new confectionery based Cadbury plc, mainly because its Australian beverage activities will remain a strategic anomaly. All this is confusing and ironic. Growing brands at some point need to explore new territories. They tend to need larger companies to sustain them. Cadbury Schweppes was once just such a worldwide player, but it has progressively retrenched in beverages towards narrower country based priorities. This is most evidently demonstrated by the Schweppes brand itself, which will be divided between four geographies.

• Cadbury - Australia
• Americas Beverages - US, Canada, Mexico
• Orangina Group - Benelux, France, Iberia, Italy
• Coca-Cola - Rest of world

So success for the new Americas Beverages will mean taking some beverages beyond the Americas. And success for the Orangina Group will mean taking more beverages beyond Europe. But Coca-Cola has the widest interests and Australia cannot remain isolated forever. There are also relationship complications for other brands such as Oasis and Orangina. So the outlook for these lemonades will become cloudier before it becomes clearer.