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Continued Progress in Refranchising of North American Bottling Territories
02-09-2017
ATLANTA, Feb. 9, 2017 – The Coca‑Cola Company and its bottling partners continue 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.
Collectively, The Coca‑Cola Company and its bottlers in North America are making investments that will shape the system for long-term success.
The Company has completed seven closings since it last provided an update when third quarter earnings were announced on Oct. 26, 2016:
- Coca‑Cola Beverages Florida, headquartered in Tampa, closed on territory in North Florida, including production facilities in Orlando and Jacksonville.
- Coca‑Cola Bottling Co. Consolidated, based in Charlotte, N.C., completed two closings. The first involved territory in Louisa, Ky., and in Cincinnati and Dayton, Ohio, including a production facility in Cincinnati. The second involved territory in Fort Wayne, Lafayette, Anderson, Terre Haute and South Bend, Ind.
- Coca‑Cola Bottling Company UNITED, based in Birmingham, Ala., acquired a production facility in Montgomery, Ala., and an Equipment Refurbishment Center in Atlanta.
- Coca‑Cola of Durango-Farmington, based in Durango, Colo., closed on territory in Gallup, N.M.
- Great Lakes Coca‑Cola Distribution LLC, based in Rosemont, Ill., closed on territory in eastern Michigan, including a production facility in Detroit.
- The Odom Corp., based in Bellevue, Wash., closed on territory in Hawaii, including a production facility in Honolulu.
Four definitive agreements were also signed during the fourth quarter of 2016 or in early 2017. A definitive agreement, or DA, follows a letter of intent and is the final step prior to closing:
- Arca Continental of Monterrey, Mexico, reached a definitive agreement 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. The Coca‑Cola Company 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 reached a DA 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, as noted above.
- Heartland Coca‑Cola Bottling Co. of Kansas City, Mo., reached a definitive agreement for territory in parts of Illinois, Missouri, Kansas and Nebraska, including the cities of St. Louis and Kansas City. Heartland Coca‑Cola’s DA includes a production facility in Lenexa, Kan.
- Swire Coca‑Cola, USA, a subsidiary of Swire Pacific Limited’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, Wash., and Wilsonville, Ore.
In addition, Pittsburgh-based ABARTA Inc. reached letters of intent to transfer the company’s Cleveland, Ohio, territory to Coca‑Cola Bottling Co. Consolidated and Buffalo, N.Y., territory to Bedford, N.H.-based Coca‑Cola of Northern New England.
21st Century Beverage Partnership Model History
These agreements are part of a plan to refranchise all of The Coca‑Cola Company’s U.S. bottling 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, which led to the establishment of Coca‑Cola Refreshments.
Since the closing of the transaction involving the North American territories of 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 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.
The Coca‑Cola Company and the parties involved 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 www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company.
