68 independent bottlers part of refranchised network
Emblazoned on a beverage delivery truck or in-store, the iconic Coca-Cola logo, originally invented by bookkeeper Frank Robinson in 1886, has evolved into one of the most recognizable symbols in the world. Today, The Coca-Cola Co., Atlanta, offers much more than carbonated soft drinks (CSDs) to consumers. Distributed in more than 200 countries, the beverage giant’s portfolio contains more than 500 brands that are owned by The Coca-Cola Co. like Dasani waters, Gold Peak teas and coffees, Minute Maid and Fanta, or are part of investment and distribution agreements like Monster energy drinks and BodyArmor sports drinks.
As one might expect, bottling and delivering billions of bottles of refreshment to consumers worldwide requires an agile system that not only delivers value to customers across the supply chain but works seamlessly with IT, national and local partners and retailers, to enable consumers to “Taste the Feeling.”
To keep operations streamlined and humming along, the Coca-Cola system in North America embarked on a milestone commitment nearly a decade ago to reshape its North American bottling operations by returning ownership to local partners.
All told, during the span of 10 years, the Coca-Cola Co. and its U.S. bottling partners worked together to execute 60 transitions, which included 350 distribution centers, more than 50 production facilities, more than 55,000 employees and more than 1.3 billion physical cases of volume.
In a statement when the final U.S. transaction closed in October 2017, J. Alexander “Sandy” Douglas Jr., then president of Coca-Cola North America, said: “We are reshaping our business and accelerating our transformation to become a total beverage company. Our system is built to respond to consumers’ needs in a fast-moving and highly competitive environment. Returning the local part of our business to where it really belongs and will best perform — in the hands of local companies — is a key enabler of the exciting transformation and growth of our business.”
Known as Coca-Cola’s 21st Century Beverage Partnership Model, today 68 independent U.S. Coca-Cola bottlers are running their own trucks and bottling operations as a fully refranchised system. Some, like Charlotte, N.C.-based Coca-Cola Consolidated have been part of the Coca-Cola bottling network for more than 115 years, while others, like Reyes Coca-Cola Bottling, Irvine, Calif., just celebrated its one-year anniversary with the system this past October.
The U.S. Coca-Cola system now comprises a diverse array of independent bottlers, from multinational owners to decades-old family held operations. The new system is working to reinvent the future of the business, especially in such key areas as portfolio diversification, packaging innovation, production, procurement, technology and pricing, the company says.
The refranchised system also operates on a new IT platform that enhances efforts to digitize the Coca-Cola system and improve the ability to coordinate and manage information across bottling partners at both local and national levels, the company says.
“We’re incredibly pleased with the newly refranchised Coca-Cola ‘System of the Future,’” said Coca-Cola North America President, Jim Dinkins. “The strength of our U.S. bottling system is now built on the diverse talent and expertise of 68 independent bottlers, and we’re already seeing results in the marketplace as we evolve to a total beverage company. Together, as an empowered and agile franchise system, we’re creating value, building strong brands and refreshing consumers with a wide variety of beverages. Coca-Cola bottlers, with their deep local roots, also are making significant investments to strengthen the communities they serve.”
Key to the success of the 21st Century Beverage Partnership Model is having a re-energized and stronger relationship between the beverage manufacturer and its bottlers, who go above and beyond for their customers, explains James Quincey, president and chief executive officer of The Coca-Cola Co.
“The end of refranchising in North America is gratifying in large part because of the bottlers who have expanded or joined the system for the first time,” Quincey said in the November issue of Beverage Industry. “It shows that this is a great industry with great growth opportunities.
“… We are working together to drive results,” he continued. “… Even the largest companies benefit from localizing. People and relationships drive growth.”
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