TORONTO — Cott Corp. has designed a plan to improve operating efficiencies and enhance sales focus. The company will realign the management of its Canadian and U.S. businesses to a North American basis to leverage management strengths, improve supply chain efficiencies and position the North American business to become more profitable and responsive to customers’ needs.
The company estimates that pre-tax charges of $60 million to $80 million will be recorded over the next 12 to 18 months. This amount is comprised mainly of asset impairment charges and also includes severance and other costs. The company also estimates that operating income will improve by $10 million to $15 million annually when these changes are completed.
Under the new structure, two veteran Cott executives with strong track records of success will lead North American operations and sales. Mark Benadiba, currently executive vice-president of Canada and International, will head North American operations and supply chain functions including manufacturing, purchasing, logistics and quality.
John Dennehy, currently vice-president of new business development for Cott U.S.A., will lead North American sales and marketing. Additionally, Gil Arvizu, who successfully built Cott’s Mexican business, returns to the U.S. to head up the U.S. sales organization, reporting to Mr. Dennehy.
Mr. Benadiba and Mr. Dennehy, along with Jason Nichol, Cott’s vice-president of business development for Wal-Mart, will report directly to president and chief executive officer, John Sheppard. The company also announced that Robert J. Flaherty, executive vice-president and president of Cott U.S.A., has left Cott to pursue other interests.
Cott’s board of directors endorsed these changes and reiterated its support of the management team.
"The actions announced today are right for Cott’s customers, employees and shareowners," said Frank E. Weise, chairman of the board. "They will enable the company to reap the benefits of retailer brand growth potential and position Cott to continue leading that growth.
"The new structure puts proven Cott executives into key leadership positions with John Sheppard taking a direct role in turning around and growing Cott’s North American operations. The skills and experience he demonstrated while delivering record results as president of Cott’s U.S. division are exactly what the company needs to remain the preferred supplier of retailer brand beverages.
"We committed to taking quick and decisive action. These steps are important in positioning us for increased profitability. With this structure, we will be a more efficient and effective organization with a critical focus on operations and sales."
As part of the organizational realignment, the company also announced that Cott’s Mexican business unit and Royal Crown International now will report to Colin Walker, senior vice-president of corporate resources. All appointments are effective immediately.
In addition to the organizational changes, key elements of the company’s plan include rationalizing product offerings, eliminating underperforming assets and increasing focus on high potential accounts.