Billy Cyr revamps Sunny Delight Beverages Co.

Billy Cyr, President and CEO, Sunny Delight Beverages Co.

Billy Cyr had been leading a company that had operated with the same supply chain and technology for the past 15 years, lacked a competitive product line-up, and was dabbling in businesses that weren’t helping the company grow.

Cyr, president and CEO of Sunny Delight Beverages Co., a 600-employee, $550 million drink business, knew the company needed to make changes to grow. The challenge would be figuring out what changes would have the biggest impact.

He acquired two new brands to expand the Sunny Delight line-up, sold an underperforming European business, and made a significant investment in the company’s supply chain and overall operations in the US.

“We have built a supply chain that’s both chilled and shelf-stable, increased the wholesomeness of our products, and invested in the supply chain and built that out,” Cyr says. “As a result of that, we are more profitable than we were several years ago and we’re certainly in a stage now where we have a clear path to some pretty significant growth.”

Through acquisitions and a $70 million investment in the future of Sunny Delight, Cyr has made a push for the company to be more competitive in a tough beverage industry.

Here’s how Cyr revamped the company with new products, technology and a narrowed focus on U.S. growth.

Consider acquisitions

No matter how hard you look within your own company for growth opportunities, sometimes they just aren’t there. You have to be willing to bring in opportunities from outside.

“(Acquisitions) are always tricky because it’s where opportunity meets strategy,” Cyr says. “You could have the best idea on the best acquisition, but if it’s not available at the right time and you’re ready for it, there’s really not much you can do about it. We like to think of ourselves as staying very, very close to the industry and constantly aware of where the opportunities might be and how they might fit with us. You have to be open to the unexpected and be ready to say no. We say no nine times out of 10, because if it’s not right, why waste your time and why waste the seller’s time?”

Being open to the unexpected is exactly what put Cyr and Sunny Delight in front of the Fruit2O water and Veryfine juice brands deal, both from Kraft Foods.

“The Fruit2O and Veryfine acquisitions have been a gold mine for us and have done extremely well,” he says. “When we first saw the materials on it we looked at it and we said, ‘You’ve got to be kidding, why in the world would we want this thing?’ We went in and took a look at it and said, ‘Well, there’s something here.’ We kind of entered the process a bit reluctantly and ultimately turned out to get a deal.”

Not every opportunity works out that way. You have to constantly pay attention to your industry.

“At the end of the day, you’ve got to be connected to your industry, you’ve got to know what you’re looking for and have people knowing what it is you’re interested in,” he says. “You’ve got to pursue those things at the right time, but you have to at the same time be open to some things being a little unexpected.”

A CEO has to be very clear about where value creation is going to come from.

“Value creation is what acquisitions are all about,” he says. “Every acquisition has sources of value creation and sources of value erosion. You have to minimize value erosion from things that might go wrong or could go wrong or might result in a one time cost. You want to maximize value creation on things where you’re going to get operating synergies or revenue growth or cost savings. Keeping those out in front of you and optimizing those that make the most sense is critically important. Be clear, decisive and transparent about how things are going to run. If you’re not, people will muddle along and do the work, but they won’t understand where value is created.”

Focus on the best performing units

Shortly after installing Fruit2O and Veryfine into the company’s product line-up, Cyr had to make another big decision about the direction of the organization.

“We were looking at our opportunities and looking at where we want to spend our management time and energy,” Cyr says. “We quickly concluded that the European market was going to be one of our slower growing markets. It was a market where we did not have significant scale. If we wanted to build the scale there to become more competitive, we were going to have to make several very sizable investments—either acquisitions or infrastructure. When we compared that to the opportunity to make further investments in our North American business, we quickly concluded the North American business would be more lucrative for us.”

At the same time Cyr and his team were contemplating their decision, a Japanese company offered to buy the European business to build its own presence there.

“When you have somebody who is as determined as they were knocking on your door and wanting to own your business in Europe and you’ve already mentally decided that it’s OK to separate your business, it makes for a fairly simple and easy decision to separate the US business from the European,” he says. “It has paid very big dividends in terms of focus and the ability to make the investments we want to make in the US.”

When making decisions that will shift the focus of the company, you have to be as certain as possible that you are making the right move.

“It’s always easy to give advice on this one from the outside in or looking back,” Cyr says. “I think every CEO would tell you that they always wait too long to make some of the decisions that could help narrow and tighten the focus. Part of being eternally optimistic is you believe that every part of your business — every child that you have is going to succeed and be great. You don’t want to decide to narrow your scope to focus on the few things that have the greatest chance of being successful. You don’t stop paying attention to two children to focus on the other two. You have to always be focused on all of them, but in reality when you look back and look at it as a business and not as your children, you quickly figure out that there are some things you do need to do when you’re narrowing your focus and that’s always a tough call. The minute you think it’s a possibility, you might really want to think it’s time to go do it.”

Invest in operations

With a narrowed focus and a new product line-up, Cyr could turn his attention to growing the North American business and improving the company’s operations.

“We’re making a very sizable investment in our manufacturing operations,” Cyr says. “We bought a plant in Texas. We’re buying all new filling lines that are going to speed up our manufacturing processes. We’re automating all of our warehouses. We’re upgrading our IT system. We made several very significant improvements and those are things that would have been tougher to do if we hadn’t made the decision to focus on North America.”

Making those improvements took a lot of evaluation of areas where there were opportunities that hadn’t been seen before.

“In this particular case, we stepped back and said, ‘It’s been 15 years since our supply chain and our packaging lineup was last revisited,’” Cyr says. “Sunny Delight’s supply chain in North America had basically been frozen with the technology and the basic platform it was built on in 1994. So in 2009 we said, ‘Maybe after 15 years the world has changed.’”

There were three fundamental changes that had a big impact.

“No. 1 is our gallon bottle business had gone from being a relatively small part of our total business to being more than half of our business in North America. So when it was originally designed for our manufacturing operations, it was designed to be sort of an adjunct to the portfolio rather than a key part of the portfolio. The second thing is our customer base had changed. In 1994 we were selling virtually nothing to Wal-mart and in 2009 and 2010 when we started looking at this project, Wal-mart was our single largest customer. The third thing is our technology changed. The speed of filling lines and the capability of equipment to operate at higher speeds had all changed dramatically. They all changed in different ways and when that many different things change that much over a 15-year period, you know there has to be opportunity to do the business better.”

Cyr and his team spent a year analyzing the entire operation and found that moving to higher-speed lines and developing a new bottle would help save money and meet consumer’s needs.

“It would allow us to reduce our operating cost in our plants,” he says. “It would allow us to run with much higher-speed lines, which are higher-quality, higher-reliability lines than we had before.”

The faster lines sparked a new design for the SunnyD bottle, called the quadro-bottle, which took Sunny Delight’s iconic cylindrical bottle and replaced it with a rectangular one.

“That rectangular bottle offers four very distinct benefits,” he says. “One is its less packaging material so there’s a savings and it’s more environmentally responsible. The second is it fits in the refrigerator door so the consumer can easily use it in the refrigerator. Third is it moves to an off-center spout so it’s much easier to pour. The fourth is because it’s rectangular it’s much more efficient through the supply chain. It fits on the store shelf and allows the retailer to fit 22 percent more product on the shelf and it fits on pallets more efficiently and fits in cases and in warehouses more efficiently. It gave us these four significant steps up versus what we had before and that became the basis for our business building opportunity.”

Much like the decision to sell the European business, this project took some major foresight and planning on Cyr’s part.

“I didn’t know what the solution was, but I knew that the world had changed and we needed to respond to that change,” he says. “You have to focus on the big drivers, not the little ones. What are the big broad strokes that are going to have a dramatic impact? Those will give you 99 percent of the benefit and you’ll be able to do it with 50 percent of the effort as opposed to pushing so far that you push all the little pieces too. The other part is focusing on making sure you’re harnessing the full capability of the organization.”

The best way to harness the full capacity of your business and see all the potential opportunities is to gather and consider the advice of others in your company.

“It always starts with having people around you that you trust who can give you very good information and input,” Cyr says. “The second thing is to start trying to figure out where all the biases are. When your folks have been looking at the business over an extended period of time and looking at it through the same lens, they’re pretty much going to see the same thing. At some point you have to step back and say, ‘I need to find a different lens, a different way to look in at the same issue.’ Where can you see an obvious sign that you aren’t seeing the whole market or somebody’s seeing the market differently than you do? Where do you find that the choices and directions that you’re making aren’t consistent with what others may be doing? That’s because they have a different lens on the same set of circumstances.”

To get a different lens, Cyr relies on the perspective of his board.

“They look at the business through a lens that is different than the lens that I have,” he says. “When I hear them say something that inherently makes no sense to me or doesn’t seem to fit the situation, rather than thinking it must be wrong, I always ask myself the question, ‘In what context is that statement true?’ If you ask yourself that question, you ultimately will find a different way to look at the exact same set of circumstances and almost always it is dead-on right. It teaches you something else about the set of circumstances that you completely missed. Start with understanding where the biases are and then go directly after those. If your biases perceive the world this way, eliminate that bias and you’ll see it a completely different way.”

HOW TO REACH: Sunny Delight Beverages Co., (800) 395-5849 or


–         Look outside your business for growth opportunities

–         Find chances to narrow your company’s focus

–         Invest in and grow your business

The Cyr File

Billy Cyr

President and CEO

Sunny Delight Beverages Co.

Born: Palmerton, Pa.

Education: Graduated from Princeton with a degree in history and East Asian studies.

What was your first job and what did you learn from that experience?

I was self-employed. I did everything from snow-shoveling to lawn-mowing to house-sitting to having a newspaper route. I did anything to make a buck. If you’re willing to do something that other people are less willing to do or aren’t willing to work as hard at, you could make a lot of money. It was also self-reliance, independence and dealing with customers.

What is the best business advice that you’ve ever received?

My father always encouraged us to take risks. That’s one of the biggest sources of advantage that I have and one of the things that is most in shortage today. We’re all far more capable of doing things than we think and the downsides of failing are much less than we think. The upside is usually much bigger than you think.

If you opened your fridge, what Sunny Delight beverages would we find?

We have a lot of Fruit2O in our refrigerator right now. We have a regular 64oz bottle of Sunny Delight. One of my kids loves it and I certainly drink it. We have the Veryfine red fruit punch that’s very good. My daughter likes some of our fruit simple smoothies and our Bossa Nova products, so some of that is in there as well. 

Do you have a personal favorite?

I have seasonal favorites. In the summer I need the water when I’m running, so the Fruit2O fits in there. I drink a lot of SunnyD in the winter time.