Final Deals Close with Liberty Coca-Cola
Beverages, Reyes Coca-Cola Bottling and Swire Coca-Cola USA,
Returning Ownership of U.S. Bottling Operations to Local
Partners
Nearly a decade ago, The Coca-Cola Company began a journey to
reshape its bottling system in North America with a plan to return
the ownership of bottling operations to where they best perform –
in the hands of local bottling partners. Today, the company marks a
major milestone as nearly 70 independent Coca-Cola bottlers across
the United States are now running their trucks and bottling
operations as a fully refranchised system.
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Coca-Cola’s U.S. bottling business has
transformed from a largely company-owned system in 2013 to one that
is now operated by a diverse and highly capable group of local
business owners. (Graphic: Business Wire)
Three major territory closings occurred over the weekend to
reach this historic milestone:
- Liberty Coca-Cola Beverages, a
new bottler, began operations in New York, New Jersey and the metro
Philadelphia area. This is the former Tri-State Metro Operating
Unit of Coca-Cola Refreshments (CCR).
- Reyes Coca-Cola Bottling took on
new bottling territories in California and Nevada, which were
previously operated by CCR. Reyes added to its existing operations
in parts of six Midwestern states, including the cities of Chicago,
Detroit, Minneapolis and Milwaukee.
- Swire Coca-Cola, USA closed on
an additional production facility in Colorado, adding to its
existing bottling operations across six Western states.
With the closing of these U.S. transactions, Coca-Cola North
America has completed the company’s largest refranchising
initiative. The company and its U.S. bottling partners have worked
together to execute 60 transitions, which include 350 distribution
centers, over 50 production facilities, over 55,000 employees and
over 1.3 billion physical cases of volume.
A fully refranchised system in the United States finalizes the
installation of Coca-Cola’s 21st Century Beverage Partnership
Model. This transition has built an agile system to deliver value
to customers with scale across supply chain, information technology
and customer support through independent, local companies that know
their communities and customers best.
“We are reshaping our business and accelerating our
transformation to become a total beverage company,” said J.
Alexander “Sandy” Douglas, Jr., president of
Coca-Cola North America. “Our system is built to respond to
consumers’ needs in a fast-moving and highly competitive
environment. Returning the local part of our business to where it
really belongs and will best perform – in the hands of local
companies – is a key enabler of the exciting transformation and
growth of our business.”
The U.S. Coca-Cola system is now made up of a diverse array
of independent bottlers, from multinational owners to decades-old,
family-held operations. This new system is working to reinvent the
future of the business, especially in key areas such as portfolio
diversification, packaging innovation, production, procurement,
technology and pricing. Most new or expanding bottlers are hiring
more people and investing in plants and equipment. The new system
also operates on a new IT platform that enhances efforts to
digitize the Coca-Cola system and significantly improves the
ability to coordinate and manage information across bottling
partners at both local and national levels.
“Transforming to our new 21st Century Beverage Partnership Model
makes our routes to market and our national and local partner touch
points stronger than they’ve ever been,” said Todd Beiger, senior
vice president, System Transformation, Coca-Cola North America.
“The energy brought by our system partners during the refranchising
process has been truly inspiring, and we’re excited to carry the
momentum into our new operating model.”
Added Bruce Karinshak, vice president, System Transformation,
Coca-Cola North America: “Bottlers bring a personal and local touch
to their relationships, which is critical to the success of our
newly transformed system and the competitive advantage to our
business. A tremendous amount of time and effort was required over
the years for the transition to our 21st Century Beverage
Partnership Model, and with the collective teamwork and passion
between the company, CCR and bottling partners, the transitions
have been impressively seamless.”
21st Century Beverage Partnership Model
History
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. 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.
Coca-Cola North America’s refranchising plan will conclude with
the completion of transactions in Canada and the U.S. Virgin
Islands, which are anticipated in the first half of 2018.
About The Coca-Cola
Company
The Coca-Cola Company (NYSE: KO) is the world’s largest total
beverage company, offering over 500 brands to people in more than
200 countries. Of our 21 billion-dollar brands, 19 are available in
lower- and no-sugar options to help people everywhere more easily
control added sugar. In addition to our namesake Coca-Cola drinks,
some of our household names around the world include: AdeS
soy-based beverages, Ayataka green tea, Dasani waters, Del Valle
juices and nectars, Fanta, Georgia coffee, Gold Peak teas and
coffees, Honest Tea, Minute Maid juices, Powerade sports drinks,
Simply juices, smartwater, Sprite, vitaminwater, and Zico coconut
water. At Coca-Cola, we’re serious about making positive
contributions to our world. That starts with reducing sugar in our
drinks and bringing new and different drinks to people everywhere.
It also means continuously working to reduce our environmental
impact, creating rewarding careers for our associates, and bringing
economic opportunity wherever we operate. In fact, together with
our bottling partners, we employ more than 700,000 people around
the world. For more information, visit our digital magazine
Coca-Cola Journey at www.coca-colacompany.com and follow The
Coca-Cola Company on Twitter, Instagram, Facebook and LinkedIn.
Forward-Looking
Statements
This press release may contain statements, estimates or
projections that constitute “forward-looking statements” as defined
under U.S. federal securities laws. Generally, the words “believe,”
“expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and
similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from The Coca-Cola Company’s
historical experience and our present expectations or projections.
These risks include, but are not limited to, obesity and other
health-related concerns; water scarcity and poor quality; evolving
consumer preferences; increased competition and capabilities in the
marketplace; product safety and quality concerns; perceived
negative health consequences of certain ingredients, such as
non-nutritive sweeteners and biotechnology-derived substances, and
of other substances present in our beverage products or packaging
materials; an inability to be successful in our innovation
activities; increased demand for food products and decreased
agricultural productivity; changes in the retail landscape or the
loss of key retail or foodservice customers; an inability to expand
operations in emerging and developing markets; fluctuations in
foreign currency exchange rates; interest rate increases; an
inability to maintain good relationships with our bottling
partners; a deterioration in our bottling partners' financial
condition; increases in income tax rates, changes in income tax
laws or unfavorable resolution of tax matters; increased or new
indirect taxes in the United States and throughout the world;
increased cost, disruption of supply or shortage of energy or
fuels; increased cost, disruption of supply or shortage of
ingredients, other raw materials or packaging materials; changes in
laws and regulations relating to beverage containers and packaging;
significant additional labeling or warning requirements or
limitations on the marketing or sale of our products; an inability
to protect our information systems against service interruption,
misappropriation of data or breaches of security; unfavorable
general economic conditions in the United States; unfavorable
economic and political conditions in international markets;
litigation or legal proceedings; failure to adequately protect, or
disputes relating to, trademarks, formulae and other intellectual
property rights; adverse weather conditions; climate change; damage
to our brand image and corporate reputation from negative
publicity, even if unwarranted, related to product safety or
quality, human and workplace rights, obesity or other issues;
changes in, or failure to comply with, the laws and regulations
applicable to our products or our business operations; changes in
accounting standards; an inability to achieve our overall long-term
growth objectives; deterioration of global credit market
conditions; default by or failure of one or more of our
counterparty financial institutions; an inability to renew
collective bargaining agreements on satisfactory terms, or we or
our bottling partners experience strikes, work stoppages or labor
unrest; future impairment charges; multi-employer pension plan
withdrawal liabilities in the future; an inability to successfully
integrate and manage our Company-owned or controlled bottling
operations; an inability to successfully manage our refranchising
activities; failure to realize the economic benefits from or an
inability to successfully manage the possible negative consequences
of our productivity initiatives; failure to realize a significant
portion of the anticipated benefits of our strategic relationship
with Monster; inability to attract or retain a highly skilled
workforce; global or regional catastrophic events, including
terrorist acts, cyber-strikes and radiological attacks; and other
risks discussed in our Company’s filings with the Securities and
Exchange Commission (SEC), including our Annual Report on Form 10-K
for the year ended December 31, 2016 and our subsequently filed
Quarterly Reports on Form 10-Q, which filings are available from
the SEC. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The
Coca-Cola Company undertakes no obligation to publicly update or
revise any forward-looking statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20171030005384/en/
The Coca-Cola CompanyLauren Thompson,
+01-404-676-2683LaurenThompson@coca-cola.com
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