Our aim is to drive superior shareowner returns using all the levers of value creation: revenue growth, margin enhancement and increased capital efficiency. We will exploit and expand our business platforms through innovation, execution in the marketplace, investment and by using Smart Variety to extend our broad product portfolio into new markets. We will reduce costs to ensure we have a competitively advantaged cost base and can release funds to invest in our business, and will manage our capital base by maintaining an efficient balance sheet and growing our dividends more in line with earnings.
Driving innovation through global categories
Our new global category approach means that we can roll out our innovation more rapidly across many markets under our strong local and regional brands. Our aim is to replicate the success we have had with centre-filled gum, which now has annualised sales of over £100 million. As a result, we will be able to increase the efficiency of our innovation processes, by focusing on larger, more innovative products, and reduce the number of different product lines and pack sizes. In turn, this will allow us to unlock savings by further reconfiguring our supply chain.
Focusing on areas with the most potential
Our markets are large, growing and profitable. To sustain our growth in both confectionery and beverages at higher levels, we are intensifying our focus on developing our exposure to faster-growth areas which are aligned with consumer needs.
Within our global categories, we have identified a small number of growth platforms, such as superior indulgence (superior tasting product), wellbeing (focused on health and functional benefits), affordable products for emerging markets, and gifting. We believe these platforms have the most potential for growth, and therefore they will receive proportionally more of our focus and investment. In the beverages category, our range of Snapple super-premium functional White, Green and Red teas, launched in 2006, are examples of our focus on the fast-growing wellbeing platform. In confectionery, our premium Cadbury products such as Dairy Milk Melts and Snaps in the UK exemplify our approach to superior indulgence.
Expanding our reach in confectionery
Although we have global confectionery leadership, in many markets we only sell products in one or two of the three confectionery categories. Smart Variety exploits this growth opportunity by using our existing distribution strength to expand into new categories. In 2007, for example, we are using our powerful distribution in the UK to launch some of our best gum technologies (the long-lasting flavour technology we developed for our new US gum brand, Stride, and centre-filled gum) under our global gum brand, Trident.
In a number of confectionery markets we have little or no presence. We see opportunities to expand into new categories and markets and strengthen our existing presence through bolt-on acquisitions, particularly in emerging markets. Given our current platform and brands, we have greater capacity for exploiting the potential of acquisitions than other confectionery companies and we have strong knowledge of the opportunities. However, we will be disciplined, and will only pursue acquisition opportunities where they can be value creating.
Exploiting our beverages strength
In beverages, we will use our scale and continue to strengthen our distribution to expand the availability of our brands geographically, and in channels where we are currently under-represented, for example convenience stores and restaurants. We will also seek to further develop our presence in higher-growth products, either through our own products or through partnerships with third parties. For example, in 2007, we are launching Accelerade, a protein enhanced ready-to-drink sports beverage for serious athletes.
Increasing efficiency and reducing costs
To underpin margin growth and fund our investments, we must have a relentless focus on cost and efficiency. We have opportunities across all parts of our business, including commercial, general and administration and supply chain costs. Our new category structure will reduce duplication and complexity and the creation of a global outsourced shared business services organisation will further increase efficiency. In our supply chain, we will further reconfigure our assets to reduce complexity and enhance performance, and continue to improve our procurement processes.
Reinforcing our reputation
Being both performance driven and values led are vital to our long-term business success. In 2006, we adopted new goals and commitments on sustainability for the years to 2010 to support our aim of responsible and sustainable business growth. Together, they remind us that having an engaged and committed workforce, and taking care of our environment and the communities where we live, work and operate, are key parts of our reputation and our business success.