The Coca-Cola Company Announces Continued Progress with North American Refranchising Initiative
July 27 2016 - 6:45AM
Business Wire
Bottlers Sign New Letters of Intent for
Territories in Two States
National Product Supply Group to Add Two
Members, Including Newly Formed Regional Group that will Encompass
Much of the Midwest
The Coca-Cola Company today announced several agreements that
continue the Company’s progress in reshaping its North American
bottling system.
Coca-Cola announced new letters of intent involving two
bottlers. The National Product Supply Group (NPSG) – which was
formed to administer key activities for member bottlers, including
production of cold-fill beverages – also announced that it is
expanding.
The new letters of intent involve:
- Coca-Cola Bottling Company of Yakima,
Wash., expects to add territory in Moses Lake, Wash. This is a
portion of the Pacific Northwest territory that was previously
announced under a letter of intent with Swire Coca-Cola, USA.
Coca-Cola Refreshments (CCR), a subsidiary of The Coca-Cola
Company, currently has exclusive distribution rights in this
territory.
- Durham Coca-Cola Bottling Company of
North Carolina expects to add territory in Sanford, N.C. CCR
currently has exclusive distribution rights in this territory.
The NPSG – which has five current members and a sixth,
previously announced incoming member – expects to add to its
membership. The two additional members are Coca-Cola Beverages
Florida and the newly created Midwest Regional Product Supply
Group, or Midwest RPSG. The Midwest RPSG will be led by Rosemont,
Ill.-based Great Lakes Coca-Cola Distribution and is anticipated to
include other Midwestern bottlers.
Definitive Agreements and Closings
The Coca-Cola Company also confirmed progress on these
previously announced letters of intent:
- Viking Coca-Cola Bottling Co. of St.
Cloud, Minn., has reached a definitive agreement for territories in
parts of Minnesota, Wisconsin and Michigan.
- Great Lakes Coca-Cola Distribution has
reached a definitive agreement to acquire production facilities in
Alsip and Niles, Ill., Eagan, Minn. and Milwaukee. Great Lakes has
also closed deals for seven distribution centers in the
Midwest.
21st Century Beverage Partnership Model
History
These agreements are part of a plan to refranchise all of The
Coca-Cola Company’s North American territories by the end of
2017.
The Coca-Cola Company 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.
Since the closing of the transaction involving the North
American territories with Coca-Cola Enterprises, The Coca-Cola
Company 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 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 43 of the 51 cold-fill production
facilities in the United States.
The new letters of intent announced today are subject to The
Coca-Cola Company and the companies involved reaching definitive
agreements. The parties are committed to working together to
implement a smooth transition with minimal disruption for
customers, consumers and system associates. Financial terms are not
being disclosed.
About The Coca-Cola
Company
The Coca-Cola Company (NYSE: KO) is the world's
largest beverage company, refreshing consumers with more than 500
sparkling and still brands and more than 3,800 beverage choices.
Led by Coca-Cola, one of the world's most valuable and recognizable
brands, our company’s portfolio features 20 billion-dollar brands,
18 of which are available in reduced-, low- or no-calorie options.
Our billion-dollar brands include Diet Coke, Coca-Cola Zero, Fanta,
Sprite, Dasani, vitaminwater, Powerade, Minute Maid, Simply, Del
Valle, Georgia and Gold Peak. Through the world's largest beverage
distribution system, we are the No. 1 provider of both sparkling
and still beverages. More than 1.9 billion servings of our
beverages are enjoyed by consumers in more than 200 countries each
day. With an enduring commitment to building sustainable
communities, our company is focused on initiatives that reduce our
environmental footprint, create a safe, inclusive work environment
for our associates, and enhance the economic development of the
communities where we operate. Together with our bottling partners,
we rank among the world's top 10 private employers with more than
700,000 system associates. For more information, visit
Coca-Cola Journey at www.coca-colacompany.com, follow us on
Twitter at twitter.com/CocaColaCo, visit our
blog, Coca-Cola Unbottled, at www.coca-colablog.com or
find us on LinkedIn
at www.linkedin.com/company/the-coca-cola-company.
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version on businesswire.com: http://www.businesswire.com/news/home/20160727005664/en/
The Coca-Cola CompanyScott Williamson,
404-676-3288swilliamson@coca-cola.com
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