The Coca-Cola Co is moving away from owning bottlers

The Coca-Cola Co is moving away from owning bottlers

The Coca-Cola Co is returning its North American operations to separate business and bottler arms just 17 months after they were integrated into a wider Americas unit.

The move, announced yesterday (12 December), is part of Coca-Cola's plan to return to a franchise model instead of owning bottlers.

The changes, effective from 1 January, will see the end of the Americas unit, formed last July, as well as the departure of the unit's president, Steve Cahillane, who is leaving “to pursue other opportunities”, Coca-Cola said.

Meanwhile, Coca-Cola's Latin American operations, which made up the rest of the Americas unit, will integrate with the group's international arm. 

The company said the changes are “further action” after last July's structural shake-up that streamlined the company from five units into three. In that move, Coca-Cola's North America and Latin America operations were joined to create Coca-Cola Americas, with then Coca-Cola Refreshments president & CEO Cahillane promoted to lead the new unit.

Explaining yesterday's announcement, Coca-Cola CEO Muhtar Kent said: “(Last year) we organised the business to intensify focus on key markets, streamline reporting lines, and provide flexibility to adjust the business within these geographies in the future.

"Now, we are in a position to leverage this flexibility to return to a traditional company and bottling operating model in North America, which will enhance our focus on execution and accelerate the refranchising of our bottling system in our flagship market.”

The new North American unit will consist of Coca-Cola North America and bottler Coca-Cola Refreshments. Coca-Cola North America will be led by Sandy Douglas, as group president. Douglas will continue his role as global chief customer officer.

Paul Mulligan, currently head of commercial for the Bottling Investments Group, will become president of Coca-Cola Refreshments.

Coca-Cola is preparing to give its US bottlers more territory as it moves away from owning bottlers. Earlier this year, it gave five independent bottlers in the US the option to take on further distribution territory from Coca-Cola.