Coca-Cola Says North America Refranchising Plan Remains On Track For Completion In 2017

Posted On: 10/28/2016

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TAGS: vending, Coca-Cola Co., Coca-Cola Co. North America refranchising plan, Coke bottlers, Coca-Cola, National Product Supply Group

ATLANTA -- Coca-Cola Co. said it is making steady progress toward completing its North America refranchising plan. The beverage giant reached definitive agreements and closings involving nine different bottling partners during the third quarter and early fourth quarter of 2016. Financial terms are not being disclosed.

Atlantic Coca-Cola Bottling Co. (Atlantic, IA) closed on additional franchise territory in Iowa, along with areas in Minnesota, Wisconsin, Illinois and Missouri, including six distribution centers in Iowa and one in Illinois.

Great Lakes Coca-Cola Distribution (Rosemont, IL) closed on one distribution center in Wisconsin and two in Minnesota, and production plants in Eagan, MN, and Milwaukee.

Swire Coca-Cola USA, a subsidiary of Swire Pacific Ltd.'s beverages division, closed on seven distribution centers in Arizona and New Mexico. And Viking Coca-Cola Bottling Co. of St. Cloud, MN, closed on facilities in Duluth, MN, and Ashland, WI, along with surrounding franchise territory in Minnesota, Wisconsin and Michigan.

Additionally, during the third quarter and early fourth quarter Coca-Cola Beverages Florida, based in Tampa, agreed to acquire franchise territory in north and south Florida, including nine distribution centers and four production facilities in Jacksonville, Tampa, Orlando and Hollywood.

Coca-Cola Bottling Co. Consolidated (Charlotte, NC) signed a definitive agreement to acquire 14 distribution centers in Illinois, Indiana, Ohio, Kentucky and West Virginia, and three production plants in Cincinnati, IN, and Portland, IN.

Coca-Cola Bottling Co. United Inc. (Birmingham, AL) signed a definitive agreement for a production facility in Montgomery, AL. Coca-Cola United previously acquired distribution rights for the Montgomery market and surrounding territories in 2014.

Coca-Cola of Durango-Farmington (Durango, CO) signed a definitive agreement for territory in Gallup, NM.

Odom Corp. (Bellevue, WA) has acquire franchise territory in Hawaii, including five distribution centers and a production plant in Honolulu. Odom is an expanding bottler with existing territory in Alaska.

In addition, three bottlers intend to join the Midwest Regional Product Supply Group, which is part of the National Product Supply Group that Coca-Cola formed to administer key product supply activities for member bottlers in order to strengthen its U.S. production system. | SEE STORY

The new members are Atlantic Coca-Cola, Coca-Cola Bottling Co. High Country (Rapid City, SD) and Ozarks Coca-Cola Bottling Co. (Springfield, MO). Great Lakes Coca-Cola Distribution is already a member of the Midwest RPSG and Heartland Coca-Cola Bottling Co. (Kansas City), a new bottler led by Ulysses "Junior" Bridgeman, will become a member next year.

These agreements are part of a plan to refranchise all of Coca-Cola Co.'s North American territories by the end of 2017. Coca-Cola 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 with Coca-Cola Enterprises, Coca-Cola Co. has accelerated the implementation of the new model by 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 U.S. and Canada.

So far, the company has reached definitive agreements or signed letters of intent to refranchise 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 U.S.