The ratings on Toronto-based Cott Corp. reflect its below-average business profile stemming from a narrow product portfolio, customer concentration, and small size in a sector dominated by companies with substantially greater financial resources and market presence. Furthermore, the company's weak operating performance has resulted in an ongoing decline in operating margin since 2003. These factors are partially offset by Cott's good credit protection measures for the ratings and solid market position as the leading private label manufacturer and marketer of take-home carbonated soft drinks (CSDs) in the U.S., the U.K., and Canada. Cott competes in the mature and highly competitive soft drinks market by securing a strong private label share. Despite this defensive operating strategy, the company is vulnerable to
