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Sunny Delight One Of Biggest Gainers

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It may be best known for its orange-flavoured beverage in the yellow and blue labelled container, but Sunny Delight’s fastest growth is coming from flavoured water, fruit smoothes and a nutritious “super fruit” called acai.

Acquisitions and new products helped the company crack the top 10 on this year’s Deloitte Cincinnati USA 100 for the first time. The beverage maker and marketer reported 2008 sales of $707 million.

The growth also has happened at a time when consumers are spending more time in their kitchens than at restaurants. They’re spending their dollars at the neighbourhood grocery and convenience stores where Sunny Delight generates nearly all of its sales.

“When we saw that the markets we compete in were going to do well, we invested in marketing support and product innovation,” said Billy Cyr, CEO of the 800-employee company.

The move up the annual list of privately-owned companies is significant for the firm. Just five years since a Boston private equity firm bought it from Procter & Gamble, it’s a much a different company today. It’s acquired new brands such as Fruit2O, Very fine and Bossa Nova that put it in new sections of the grocery store. It’s also created and launched new products Fruit2O Essentials, Fruit Simple smoothes and Elations joint supplement, and cut calories and added nutritional elements to each beverage in its portfolio, including the original SunnyD.

Cyr said the company’s growth comes from its three core competencies: branding, innovation and winning in the store.

“There is a systemic approach that allows our retailers to do a better job with our brands than our competitors,” he said. “We love to figure out how to do things they say you can’t do.”

With the brands it acquired, Sunny Delight has found efficiencies to send more profit to the bottom line. It also tweaked its management team. To run its Fruit2O business, acquired in October 2007, it hired Rick Suchenski, an industry expert who ran Naked Juice and Republic of Tea. With his help, the firm cut distribution costs and developed a new marketing strategy for the stagnant flavoured water brand. It also launched a new Fruit2O product, Essentials, with two servings of fruit in every plastic bottle. Fruit2O now makes up 13 percent of the company’s revenue.

“Fruit2O was a real diamond in the rough,” Cyr said. “We’re going to spend a lot of time building out distribution on that in 2010.”

Sunny Delight has been especially successful at building relationships with big retailers such as Kroger Co. and Wal-Mart, said John Sicher, publisher of Beverage Digest, an industry publication. In turn, its brands have gotten better placement and marketing opportunities in stores.

“Billy has created some critical mass to get the attention of retailers,” Sicher said. “Retailers want an array of products to help grow their business.”

Additional acquisitions aren’t necessarily on the firm’s horizon, Cyr said. It still has a lot of value to build from the brands it already purchased. And it is always coming up with new products to launch and market. But that’s not to say Sunny Delight would pass up the right opportunity.

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Friday, November 24, 2:38 pm

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