Suffering from a consumer shift to bottled water, Cott Corp., one of the world's largest makers of store-brand soft drinks, said it will realign its Canadian and U.S. management team and cut underperforming assets.
The move comes a week after the company, which bottles drinks for large retailers such as Wal-Mart Stores Inc., warned its 2005 earnings will be lower than expected and rescinded forecasts for the year, blaming the consumer shift, weak U.S. soft drink volumes and rising raw material costs.
Cott, which reports its financial results in U.S. dollars, said pretax charges of $60 million to $80 million will be recorded over the next 12 to 18 months to account for asset impairment charges and severance costs.
Once the changes are completed, the company said operating income will improve by $10 million to $15 million a year.
Under the new structure, Mark Benadiba, currently executive vice-president of Canadian and international operations, will head North American operations as well as supply chain functions such as manufacturing and purchasing.
John Dennehy, currently vice president of new business development for Cott USA, will lead North American sales and marketing.
Benadiba, Dennehy along with Jason Nichol, Cott's vice president of business development for Wal-Mart, will report directly to Cott's chief executive, John Sheppard.
"These steps are important in positioning us for increased profitability," Sheppard said.
Cott also said its Mexican business unit and Royal Crown International will now report to Colin Walker, senior vice president of corporate resources.