21st Century Beverage Partnership Model Update – Consolidated & United Sign LOI to Align Respective Territories & Arca Continental will join US Coca-Cola Bottling System
Published May/June 2016 Latest news on The Coca-Cola System of the Future:
- Coca-Cola Bottling Company Consolidated and CCBC UNITED Agree to an Exchange of Facilities and Territories In Portions of the Southeast United States
- Major Bottler Arca Continental will join the US Coca-Cola System through new agreements with the Coca-Cola Company and Coca-Cola Bottling Company United.
- Ozarks Coca-Cola Bottling Company of Springfield, MO, will acquire territory in northwest Arkansas and areas of Kansas and Oklahoma.
Coca-Cola Bottling Consolidated has signed a letter of intent with The Coca-Cola Company to exchange distribution territories in southern parts of Alabama, Georgia and Mississippi and a manufacturing facility in Mobile, Alabama for distribution territory in Arkansas, Tennessee and northwestern Mississippi and production facilities in Memphis, Tennessee and West Memphis, Arkansas. Consolidated also signed a letter of intent to acquire territory in Louisa, Kentucky and southwestern West Virginia.
Additionally, a number of facilities and territories in the Southeast will be exchanged under letters of intent involving Consolidated, fellow bottler Coca-Cola Bottling Company UNITED and the Coca-Cola Refreshments unit of The Coca-Cola Company.
These expected agreements will lead to the creation of more contiguous territories for both Consolidated and UNITED in the Southeast.
In late May, The Coca-Cola Company signed letters of intent to refranchise bottling operations that include territories in Texas, parts of Oklahoma, New Mexico and Arkansas, currently known as the Southwest operating unit of Coca-Cola Refreshments (CCR).
Under the letters of intent announced, The Coca-Cola Company will contribute the Southwest operating unit, including distribution and production operations, in exchange for a 20% equity stake in a new, privately held entity. This entity, AC Beverages, will also include all of Arca Continental’s existing beverage businesses in Latin America. Arca Continental, which is based in Monterrey, Mexico, will continue to be publicly traded on the Mexican Stock Exchange. Currently, Arca Continental is the second-largest Coca-Cola bottler in Latin America and the third-largest independent bottler in the world in terms of unit case volume.
Coca-Cola Bottling Company UNITED, based in Birmingham, Ala., will become a joint-venture partner in the U.S. operations of AC Beverages. Arca Continental will have the majority stake in this U.S. joint venture, where both companies will work hand-in-hand with local teams in a solid partnership to benefit the important markets in which they participate.
UNITED will acquire from The Coca-Cola Company the majority of its remaining territory in Oklahoma. UNITED will contribute that territory, along with cash, to its U.S. joint venture with AC Beverages. UNITED will continue to independently operate all of its other territories, which are outside of its joint venture with AC Beverages.
The AC Beverages / UNITED joint venture will be based in the United States. It will become a member of the National Product Supply Group (NPSG). The NPSG, as previously announced, will administer key activities for member bottlers, including production of cold-fill beverages. The NPSG is governed by a board comprised of representatives from its current members, which are Coca-Cola North America, Coca-Cola Refreshments, Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company UNITED and Swire Coca-Cola, USA.
The AC Beverages / UNITED joint venture will own 11 cold-fill production facilities. Nine are in Texas. Those facilities are located in El Paso, Dallas, Fort Worth, San Antonio, McAllen, Abilene and Nacogdoches, plus two in Houston. The other two facilities are in Oklahoma City and Okmulgee, Okla.
This work is expected to be completed by the end of 2017. If you are following the Coca-Cola System’s refranchising journey, this timing is three years earlier than expected. Read on for a summary of highlights to date:
Ulysses Bridgeman signed a letter of intent to acquire the Missouri, Illinois, Kansas and Nebraska territories from The Coca-Cola Company, including the cities of St. Louis and Kansas City. This LOI also includes acquisition of a production facility in Lenexa, Kansas. Justin Bridgeman, one of Junior Bridgeman’s sons, will lead the new, independent Coca-Cola Bottling Company with his father.
Coca-Cola Bottling Company UNITED will acquire Consolidated’s Deep South Territory, which spans parts of Georgia, Alabama, Florida and Mississippi. This territory includes nine sales centers, plus a production facility in Mobile, Alabama. Currently, these operations are not geographically connected to other Consolidated territories, while they are contiguous to UNITED operations.
UNITED will also acquire Consolidated’s Tennessee and Alabama territory that is serviced from its Florence, Alabama sales center, along with Consolidated’s Panama City, Florida territory. These areas are contiguous to UNITED operations.
UNITED previously acquired territory in New Orleans and New Iberia, La., along with a production facility in New Orleans. CCBCU will cover 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, CCBC UNITED will acquire production facilities in College Park and Marietta, GA, Montgomery, AL and Cleveland TN. In 2015 CCBC UNITED closed its transactions with The Coca-Cola Company to expand its territory in – Tallahassee, FL; Valdosta, Georgia; Alexandria, Monroe; Shreveport and Natchez, Mississippi. This includes acquisition of the production facility in New Orleans, La. CCBC UNITED assumed markets in Oxford-Anniston and Scottsboro, AL in 2014 and continues to expand its presence across the Alabama, Georgia, Tennessee and Florida panhandle.
Coca-Cola Bottling Co. Consolidated (as indicated in beginning of this article) has signed a LOI with TCCC to exchange the Company’s distribution territory in southern parts of Alabama, Georgia and Mississippi and a manufacturing facility in Mobile, Alabama for distribution territory in Arkansas, Tennessee and northwestern Mississippi and two production facilities in Memphis, Tennessee and West Memphis, Arkansas, currently served by Coca-Cola Refreshments USA, Inc. (“CCR”), a wholly-owned subsidiary of The Coca-Cola Company. This will include acquisition of additional distribution territory in Louisa, Kentucky and southwestern West Virginia. The transactions proposed in the letter of intent would provide exclusive distribution rights for CCBCC in territory that includes the following major markets: Little Rock, West Memphis and southern Arkansas; Memphis, Tennessee; and Louisa, Kentucky. CCBCC will relinquish distribution rights in territory that includes Mobile, Leroy and Robertsdale, Alabama; Columbus, Sylvester and Bainbridge, Georgia; and Laurel and Ocean Springs, Mississippi.
CCBCC has also signed an LOI to exchange distribution territory in Florence, Alabama, south central Tennessee and Panama City, Florida for distribution territory currently served by United in Spartanburg and Bluffton, South Carolina.
CCBCC recently expanded its distribution territory in parts of Tennessee, Kentucky, Indiana, Virginia, Delaware, Maryland and the District of Columbia. CCBCC is continuing to work towards a definitive agreement with The Coca-Cola Company for the remainder of the proposed territory expansion described in the previously announced letters of intent from May 2015 and February 2016, including distribution territories in parts of Ohio, Indiana, Illinois, Kentucky and West Virginia.
CCBCC has already recently completed the acquisition of manufacturing facilities in Sandston, VA and Silver Spring and Baltimore, MD. Consolidated is continuing to work towards a definitive agreement with The Coca-Cola Company for the remainder of the manufacturing facility acquisitions described in previously announced letters of intent from September 2015 and February 2016, including manufacturing facilities located in Indianapolis and Portland, Indiana and Cincinnati and Twinsburg, Ohio.
Coca-Cola Beverages Florida, will acquire production facilities in the Florida cities of Hollywood, Jacksonville, Orlando and Tampa. CCBF will also assume additional territory in north Florida (including Brevard, Daytona, Jacksonville, Gainesville and Orlando) and southeastern Florida (including Ft. Lauderdale, Hollywood, Miami and West Palm Beach.)
Coca-Cola Bottling Company High Country closed its transaction to acquire additional territories in northern South Dakota, the majority of North Dakota, and western Minnesota. This transaction expands Coca-Cola Bottling Company High Country’s existing territories in South Dakota, Wyoming, Montana, Colorado, and Utah. The transaction includes Sales Center facilities located in Aberdeen and Mobridge, South Dakota; Moorhead (Fargo, ND); Morris (Minnesota); Bismarck, Minot, Jamestown, Devil’s Lake, and Grand Forks (including Roseau, MN) in North Dakota. The transaction also included the CCR manufacturing facility in Bismarck, ND.
Swire Coca-Cola USA completed transactions to acquire production facilities in Phoenix, AZ and Denver, CO. and assumed the Denver and Colorado Springs markets previously. In February Swire signed a Letter of Intent to assume additional territories in Washington, Oregon and Idaho. This will also include the acquisition of cold-fill production facilities in Bellevue, WA (near Seattle) and in Wilsonville, OR (near Portland.)
Corinth Coca-Cola Bottling Works, Inc. will acquire additional territory in Missouri and Arkansas. Corinth CCBW completed its previous territory expansion into the West Tennessee market with the addition of 13 zip codes across the Dyersburg, Ripley, Covington, and Brownsville communities.
The Ozarks Coca-Cola Bottling Company completed its territory expansion in Northern Arkansas, southeast Kansas and adjoining parts of Missouri. This acquisition includes distribution centers in Joplin and West Plains and adds 37 new counties. With the move, Ozarks Coca-Cola/Dr. Pepper will do interstate business for the first time.
Viking Coca-Cola Bottling Company, based in St. Cloud, MN signed a Letter Of Intent to assume territory in portions of northern Minnesota, including Duluth and northern Wisconsin, including Ashland and a portion of Michigan. Viking also signed a Letter of Intent with Coca-Cola Bottling Company of Virginia to expand Viking CCBC’s distribution territory in Minnesota. More specifically, the territory covers most of St. Louis County which includes commonly known towns such as Ely, Tower, Biwabik, Hibbing, Eveleth and Chisholm. Coca-Cola of Virginia is currently owned by the Bonner family, who have been in the Coca-Cola business for two generations. Both bottlers have known and worked together for decades and view this as an exciting and beneficial transition for their Companies.
Clark Beverage Group, Inc. – completed their transaction, acquiring territory in Greenwood and Jackson, MS.
Great Lakes Coca-Cola Distribution, L.L.C., will acquire production facilities in Alsip and Niles, IL, Detroit, Grand Rapids, MI, Eagan, MN and Milwaukee, WI along with additional territories in Wisconsin (including Milwaukee), southern Minnesota (including Minneapolis), Michigan, portions of northeast Iowa and northern Illinois adjacent to its Chicago territory. A Letter of Intent for these territories was announced last October.
Coca-Cola of Northern New England, has signed a letter of intent to take on additional territory from The Coca-Cola Company throughout New England. The territory covers several major cities, including Boston, Providence, R.I., and Hartford, Conn. CCNNE will acquire production facilities in Needham Heights, Mass., and Hartford. Bedford, N.H.-based CCNNE has been part of the Coca-Cola System since 1977.
These plans includes the sale of North America Cold-Fill production facilities. 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 America Coca-Cola system.
This continues the significant progress The Company and our Bottling community is making toward building more integrated and streamlined System across the United States.