Cott Corp. is King of Pop

Instead of going for attention-grabbing new brands, Fowden focused on operational changes that could save the company money, such as installing bottle-blowing machines at its manufacturing facilities. Fowden has a “relentless focus” on taking costs out of the system, Khermouch says.

Fowden didn’t completely abandon Willis’ ideas about diversifying. Cott now makes a majority of its money from non-soda drinks. A quarter of the company’s revenue comes from juices, thanks to the 2010 purchase of private label juice manufacturer Cliffstar for $503 million and $14 million in deferred compensation. (Cliffstar also can earn more for performance.)

Cott’s stock price has rebounded a bit to $7, but the company isn’t entirely out of the woods. Coca-Cola and Pepsi have raised their prices, giving Cott room to raise its prices as well. But the rising costs of apple juice concentrate and the resin used to coat aluminum cans is hurting the company.

Former CEO Sheppard questions the Cliffstar acquisition, which he says has left the company with $600 million in debt. “They have burdened themselves with debt,” he says, though one analyst says the company’s ratio of debt to cash is within its historical average.

Most Wall Street analysts believe Cott has good potential for long-term growth, however. Cott outperformed industry averages last year and could see its margins grow if materials prices ease.

At a sparsely attended shareholders meeting in Toronto in early May, Fowden detailed the company’s plans for 2012. The presentation was vintage Cott — a dry, focused, unflashy pledge to “gradually restore margins through operating efficiencies.” No one from the audience asked questions.

Khermouch says private-label beverages are “a very unsexy part of the business. You are just putting sugar and water together. How hard can it be?” Plenty hard, he answers. “There is a fair amount of magic to what Cott does and now has mastered pretty well.”

Stock Trends While the shares of Coke and Pepsi have risen ­over the past six years — Coke is up 45% and Pepsi, 12% — shares of lesser-known competitors Cott and National have fallen.