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Coca-Cola signs letter of intent with three bottlers for US distribution expansion

Published 11 December 2015

The Coca-Cola Company has signed letters of intent (LOI) with three US bottlers to expand distribution in five states, under its territorial refranchising strategy.

Coca-Cola

In each of the five states, Coca-Cola will provide exclusive rights to bottlers for the sale and distribution of bottler-delivered Coca-Cola beverages.

Additionally, the company-owned US bottler Coca-Cola Refreshments (CCR) will sell its distribution and sales assets to the local bottling partner.

The new LoI states that Coca-Cola Beverages Florida, which is based in Tampa, will be in charge of an additional territory in southeastern Florida including Ft. Lauderdale, Hollywood, Miami and West Palm Beach.

Further, the LoI states that Coca-Cola Bottling Company United, which is based in Birmingham, Alabama, will be responsible for the additional territories in north and central Georgia including Atlanta and the Metro Atlanta area, Athens, Macon, and Rome.

Under the National Product Supply System (NPSS), which was established earlier this year, United will acquire production facilities in College Park and Marietta in Georgia, Montgomery in Alabama and Cleveland in Tennessee.

According to the LoI, Viking Coca-Cola Bottling Company, which is based in St. Cloud in Minnesota, is directed to assume territory in parts of northern Minnesota including Duluth, northern Wisconsin including Ashland, and a part of Michigan.

In line with previous transactions, The Coca-Cola Company and these bottlers will work in collaboration to create an integrated information technology platform across bottlers along with a new beverage agreement that supports the Coca-Cola's US operating model.

Coca-Cola North America president Sandy Douglas said: "Together with our bottling partners, we are changing the landscape of our U.S. system. Today's announcement further advances our efforts to balance national scale and local capability, which will help us significantly increase our leadership and enhance our competitive advantage in the US business."

Last month, Coca-Cola Bottling Co completed a transaction to expand its distribution territory to include Norfolk, Fredericksburg and Staunton in Virginia and Elizabeth City in North Carolina.

Additionally, it signed a definitive agreement with an affiliate of The Coca-Cola Company to acquire manufacturing facilities in Sandston, Virginia and Baltimore and Silver Spring, Maryland, and an agreement with other bottlers to form a National Product Supply Group.


Image: Coca-Cola expands its distribution network. Photo: Courtesy of tiverylucky/FreeDigitalPhotos.net.