ATLANTA -- The Coca-Cola Co. announced Feb. 9 that it is accelerating the pace and scale of its bottler-refranchising efforts with plans to refranchise 100% of company-owned North American bottling territories by the end of 2017, including all cold-fill production facilities.
The Company’s progress and success in transitioning bottling territories to date has provided the confidence to increase the pace of transition.
“We have made significant progress on our North American refranchising initiatives,” said Muhtar Kent, chairman and CEO, Coca-Cola Co. “We continue to negotiate additional agreements, and we are in constant discussion with potential partners who are excited about investing in the future of the Coca-Cola system in our flagship market, as well as in other markets around the world.”
The company has also entered into a non-binding letter of intent to refranchise company-owned bottling operations in China, building on other recent global refranchising initiatives in Europe and Africa.
The franchise system is a cornerstone of Coca-Cola Co.'s 21st Century Beverage Partnership Model in North America, a broad initiative aimed at building on system capabilities. The first letters of intent in the refranchising process were announced in 2013.
So far, the company has reached definitive agreements or signed letters of intent to refranchise territories that account for more than 40% of bottler-delivered distribution volume in the United States. The company’s Coca-Cola Refreshments unit continues to operate company-owned territories in North America and will work to ensure a smooth transition to aligned, new and existing bottling partners going forward.
As part of this accelerated refranchising effort, the company now plans to sell the remainder of its company-owned cold-fill production facilities by the end of 2017. These facilities produce sparkling beverages, such as Coca-Cola trademark brands and Sprite, along with still brands such as Dasani. The company 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 American Coca-Cola system.
Today, the Company announced several deals that represent additional progress in the overall North America refranchising process.
New letters of intent provide that:
- Coca-Cola Bottling Co. Consolidated, based in Charlotte, N.C., will assume additional territory in portions of Ohio and West Virginia, along with a production facility in Twinsburg, Ohio.
- Coca-Cola Bottling Company of Roseburg, based in Roseburg, Ore., will assume territory in the Pacific Northwest, primarily in southern Oregon and a small portion of northern California.
- ABARTA Inc., based in Pittsburgh, will assume territory in Pennsylvania.
The letters of intent announced today are subject to the parties reaching definitive agreements. Financial terms are not being disclosed.
The company has also closed its previously announced definitive agreement with Coca-Cola Bottling Co. Consolidated and successfully transitioned additional territory in Maryland and Virginia, along with a production facility in Sandston, Va.
In addition, Coca-Cola Bottling Co. Consolidated announced Feb. 9 that it has signed a non-binding letter of intent with the Coca-Cola Co. to further expand the company's distribution territory in parts of Ohio and West Virginia and to purchase and operate a manufacturing facility in Twinsburg, Ohio.. The transactions would provide exclusive distribution rights for the company in territories located within northern Ohio and northern West Virginia.
“We are excited about this opportunity to expand our company into additional markets,” said Frank Harrison, chairman and CEO. “We are continuing to integrate recently acquired distribution territories and look forward to serving new customers, consumers, communities and employees in Ohio and West Virginia.”
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