The Coca-Cola Company today announced that it has signed Letters Of Intent (LOI) with three U.S. bottlers to grant expanded distribution territories in five states as it continues to accelerate the pace of territory refranchising.
In each territory, The Coca-Cola Company will grant exclusive rights to these bottlers for the sale and distribution of bottler-delivered Coca-Cola beverages. In addition,
Coca-Cola Refreshments (CCR), the Company-owned U.S. bottler, will sell its sales and distribution assets to the expanding local bottling partner. New letters of intent provide that:
- Coca-Cola Beverages Florida, based in Tampa, will assume additional territory in southeastern Florida including Ft. Lauderdale, Hollywood, Miami and West Palm Beach
- Coca-Cola Bottling Company UNITED, based in Birmingham, Ala, will assume additional territories in north and central Georgia including Atlanta and the Metro Atlanta area, Athens, Macon, and Rome. Additionally, as part of the National Product Supply System, UNITED will acquire production facilities in College Park and Marietta, Ga., Montgomery, Ala. and Cleveland, Tenn.
- Viking Coca-Cola Bottling Company, based in St. Cloud, Minn., will assume territory in portions of northern Minnesota including Duluth, northern Wisconsin including Ashland, and a portion of Michigan
Consistent with previous transactions, The Coca-Cola Company and these bottlers will work collaboratively to benefit from more rational and contiguous operating territories across the United States; an improved, more integrated information technology platform across bottlers; and a new beverage agreement that supports the Coca-Cola system’s evolving U.S. operating model.
“Together with our bottling partners, we are changing the landscape of our U.S. system,” said Sandy Douglas, President, Coca-Cola North America. “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 U.S. business.”
The Coca-Cola Company also has reached Definitive Agreements on LOIs announced earlier in 2015 for the following distribution territories:
- Clark Beverage Group will assume additional markets in Mississippi
- Chesterman Company will assume new territory in Nebraska and western Iowa, including the Omaha and Lincoln markets
In total, and including the letters of intent announced today, territories transitioned to-date or included in agreements represent almost 40% of total U.S. bottler-delivered distribution volume.
The letters of intent announced today are subject to the parties reaching Definitive Agreements. The parties are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms were not disclosed.
Separately, The Coca-Cola Company also has reached Definitive Agreements on LOIs announced in September of 2015 with three National Product Supply (NPSS) bottlers for the sale of the following production facilities:
- Coca-Cola Bottling Co. Consolidated will acquire production facilities in Sandston, Va., and Baltimore and Silver Spring, Md.
- Coca-Cola Bottling Company UNITED will acquire the production and distribution facility in New Orleans, La.
- Swire Coca-Cola USA will acquire production facilities in Phoenix, Ariz. and Denver, Colo.
The transition of these production facilities from CCR to NPSS bottlers is anticipated to take place between 2016 and 2018. The Coca-Cola Company and Coca-Cola Bottling Co. Consolidated continue to work towards Definitive Agreements on remaining production facilities previously announced.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, one of the world's most valuable and recognizable brands, our Company's portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, we are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy our beverages at a rate of 1.9 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that reduce our environmental footprint, support active, healthy living, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world's top 10 private employers with more than 700,000 system associates. For more information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company.
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 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; 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 or in other major markets; 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 availability 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; 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 timely implement our previously announced actions to reinvigorate growth, or to realize the economic benefits we anticipate from these actions; failure to realize a significant portion of the anticipated benefits of our strategic relationships with Keurig Green Mountain, Inc. and Monster Beverage Corporation; 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 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 the possible negative consequences of our productivity initiatives; global or regional catastrophic events; 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, 2014, 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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