Private-label Pioneer

Our top-ranked company: Toronto, Canada’s Cott Corp., private-label drink king.

Fast Take

Cott, the fourth-largest soft-drink supplier in the United States, takes extensive Nielsen demographic research and, working with such retailers as Wal-Mart and Albertsons, quickly brews up new drinks that appeal to specific markets. The key: its acquisition of Royal Crown Cola in 2001, which brought not only a host of proprietary flavors but also the capacity to generate more with RC’s research and development facility in Columbus, Georgia. Cott’s symbiotic customer relationships “allow us to get closer and figure out what products make more sense,” says CEO John Sheppard.

How It Works

Last year, Wal-Mart needed a new soft drink quickly for its Kid Connection house brand. Thirteen weeks later, a new 8-ounce soda was rolled out to stores nationwide. It worked because of a relationship with the megaretailer that extends from laboratory to boardroom, allowing new ideas to bubble up quickly. “Most companies can innovate,” says Scott Huff, Wal-Mart’s vice president of divisional merchandise. “But the speed at which you innovate is the competitive advantage, and Cott’s been able to do that.”

Five-year return on invested capital: 18%
R&D spending/revenue: 0.2%FCS