Coca-Cola Co ramps up re-franchising programme
The Coca-Cola Co plans to complete its re-franchising programme by the end of 2017
The Coca-Cola Co has announced plans to re-franchise 100% of its North America bottling territories by the end of 2017, including all cold-fill production facilities.
The company said today that success so far with its refranchising scheme has "provided confidence to increase the pace". Coca-Cola Co had set out plans last October to re-franchise half of its US bottler-delivered volumes by the end of 2017.
Coca-Cola said today that it plans to sell the remainder of its company-owned cold-fill production facilities by the end of 2017. These facilities produce CSDs, such as the Coca-Cola trademarks and Sprite, along with still brands such as Dasani. The company said it expects to maintain ownership of its hot-fill facilities, which produce brands such as Powerade and Minute Maid juices. Company-owned hot-fill operations will supply the entire North America Coca-Cola system.
In addition, the company has entered into a non-binding letter of intent to refranchise company-owned bottling operations in China, to existing partners China Foods, part of COFCO, and Swire Beverage Holdings. China is Coca-Cola Co's third largest market in volume terms.
So far, Coca-Cola Co has reached definitive agreements or signed letters of intent to refranchise territories that account for around 40% of bottler-delivered distribution volume in the US.
"The acceleration of our global refranchising marks a step change in our efforts to refocus The Coca-Cola Co on its core business of building strong, valuable brands and leading a system of strong bottling partners," said CEO Muhtar Kent.
Deals announced today include:
- Coca-Cola Bottling Co Consolidated, based in Charlotte, NC, will assume additional territory in portions of Ohio and West Virginia, along with a production facility in Twinsburg, Ohio.
- Coca-Cola Bottling Co of Roseburg, Oregon, will assume territory in the Pacific north-west, primarily in southern Oregon and a small portion of northern California.
- ABARTA, based in Pittsburgh, will assume territory in Pennsylvania.
Financial terms were not disclosed.
Coca-Cola Co first announced plans to return to a franchise model, instead of owning bottlers, back in 2013.
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