Coca-Cola Co.'s Report On Bottler Refranchising Lists Seven Deal Closings

Posted On: 2/14/2017

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TAGS: Coke bottlers, Coca-Cola Co., Coke's American refranchising plan, Coke definitive agreements, Coca-Cola's U.S. bottling territories, Coca-Cola Beverages, Coca-Cola Bottling Co. Consolidated

ATLANTA -- Coca-Cola Co. and its bottling partners said they are continuing to make significant progress toward their North American refranchising plan, including multiple closings and definitive agreements signed in the fourth quarter of 2016 and early 2017. These agreements are part of a plan to refranchise all of Coca-Cola's U.S. bottling territories by the end of 2017. Financial terms were not disclosed.

The beverage giant said it has completed seven closings since it last provided an update. Coca-Cola Beverages Florida (Tampa) closed on territory in North Florida, including production facilities in Orlando and Jacksonville.

Coca-Cola Bottling Co. Consolidated (Charlotte, NC) closed on territory in Louisa, KY, and in Cincinnati and Dayton, OH, including a production facility in Cincinnati. It also closed on a second deal that involved territory in Fort Wayne, Lafayette, Anderson, Terre Haute and South Bend, IN.

Coca-Cola Bottling Co. United (Birmingham, AL) acquired a production facility in Montgomery, AL, and an equipment refurbishment center in Atlanta. Coca-Cola of Durango-Farmington (Durango, CO) closed on territory in Gallup, NM.

Great Lakes Coca-Cola Distribution LLC (Rosemont, IL) closed on territory in eastern Michigan, including a production facility in Detroit. Odom Corp. (Bellevue, WA) closed on territory in Hawaii, with a production facility in Honolulu.

Additionally, Arca Continental (Monterrey, Mexico) reached a definitive agreement with Coca-Cola for a large area of the Southwest United States, including Texas and parts of Oklahoma, New Mexico and Arkansas. This region also has nine production facilities. AC's operations in the United States will be called Coca-Cola Southwest Beverages. Coca-Cola will be a minority owner of AC Bebidas, which includes Coca-Cola Southwest Beverages, as well as AC's beverage operations elsewhere in Latin America.

Great Lakes Coca-Cola Distribution LLC (Park City, IL) reached a definitive agreement with Coca-Cola for territory in much of Michigan, including production facilities in Detroit and Grand Rapids. The company has already closed on a portion of this territory and one of the facilities.

Heartland Coca-Cola Bottling Co. (Kansas City, MO) signed a deal with Coca-Cola to acquire territory in parts of Illinois, Missouri, Kansas and Nebraska, including St. Louis and Kansas City.

The pact includes a production facility in Lenexa, KS. Finally, Swire Coca-Cola USA, a subsidiary of Swire Pacific Ltd.'s Beverages Division, reached definitive agreements for additional territory in the Pacific Northwest, including most of Washington, parts of Idaho and most of Oregon. These agreements include production facilities in Bellevue, WA, and Wilsonville, OR.

In addition, Pittsburgh-based ABARTA Inc. agreed to letters of intent to transfer the company's Cleveland territory to Coca-Cola Bottling Co. Consolidated and Buffalo, NY, territory to Bedford, NH-based Coca-Cola of Northern New England.

Coke began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment. A critical step was the company's acquisition of the North American territories of Coca-Cola Enterprises in 2010, which led to the establishment of Coca-Cola Refreshments.

Since the closing of the transaction involving the North American territories of Coca-Cola Enterprises, Coca-Cola has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.

Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.

So far, the company has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 65% of total U.S. bottler-delivered distribution volume, which equates to 71% of total Coca-Cola Refreshments volume. The company has also reached definitive agreements or signed letters of intent for 44 of the 51 cold-fill production facilities in the United States.