Coke Grants Expanded Distribution Territories To Three Bottlers

ATLANTA -- Coca-Cola Co. has signed letters of intent with three U.S. bottlers to grant expanded distribution territories in seven states as part of its goal to refranchise half of company-owned U.S. bottler-delivered volume by the end of 2017. Financial terms were not disclosed.

In each territory, Coca-Cola will grant exclusive rights to these bottlers for the sale and distribution of bottler-delivered Coca-Cola beverages. In addition, Coca-Cola Refreshments, a company-owned U.S. bottler, will sell its sales and distribution assets to the local bottling partner.

Coca-Cola Beverages Florida (Tampa), will assume additional territory in north Florida, which includes Brevard, Daytona, Jacksonville, Gainesville and Orlando.

Great Lakes Coca-Cola Distribution LLC (Chicago) will assume additional territory in Michigan, most of Wisconsin including Milwaukee, southern Minnesota including Minneapolis, portions of northeast Iowa and northern Illinois adjacent to its Chicago territory.

Atlantic Coca-Cola Bottling Co. (Atlantic, IA) will assume new territory in southeastern Iowa including Cedar Rapids and the Quad Cities, western Illinois and northeastern Missouri.

As with previous deals, Coke and the bottlers will work together, and benefit from more contiguous operating territories across the U.S.; an improved, more integrated information technology platform across bottlers; and a new beverage agreement that supports the Coca-Cola system's evolving U.S. operating model.

"We are confident that we are building a model that is modern, agile and consumer and customer focused," said Coca-Cola North America president Sandy Douglas. "The progress announced today continues our efforts to balance national scale and local capability, and will help us increase our leadership and competitive advantage in the U.S. business."

Coca-Cola also said it has reached definitive agreements with Coca-Cola Bottling Co. United, Swire Coca-Cola USA, Coca-Cola Bottling Co. High Country and the Ozarks Coca-Cola Bottling Co. and with Coca-Cola Bottling Co. Consolidated for several of the territories announced last spring. Some of these transactions are expected to close in 2015 and others in 2016.

In total, territories transitioned to-date or included in agreements represent more than 30% of total U.S. bottle-delivered volume.