In the US, The Coca-Cola Company has confirmed plans to sell nine of its production facilities to three domestically based bottlers.
Coca-Cola Bottling Co Consolidated will assume control for production facilities in Sandston, Virginia; Baltimore and Silver Spring, Maryland; Indianapolis and Portland, Indiana; and Cincinatti. In addition, Coca-Cola Bottling Company United will acquire a production site in New Orleans, and facilities in Phoenix and Denver will be taken over by Swire Coca-Cola USA.
It’s initially anticipated that Coca-Cola Refreshments, which currently operates the plants, will divest the nine facilities with an estimated net value of $380m.
The move was announced as part of the formation of a new National Product Supply System (NPSS) in the country, which Coca-Cola described as “another significant step toward building a stronger, more streamlined production system in its flagship market”. The mission of the NPSS will be to facilitate optimal operation of the US product supply system for Coca-Cola bottlers in order to achieve the lowest optimal manufactured and delivered cost for all bottlers in the system; to enable system-wide investment in building sustainable capability and gaining competitive advantage; and to prioritise quality, service and innovation in order to successfully meet and exceed customer requirements.
The development of NPSS will involve Coca-Cola bottlers Consolidated, Swire and United, as well as Coca-Cola Refreshments, joining forces to create a National Product Supply Group (NPSG).
Coca-Cola chairman and CEO Muhtar Kent said: “Our US operating model continues to become stronger, more aligned and more competitive. Today we are taking further action to enable profitable growth for our entire US system. We will leverage the strengths and capabilities of the four largest producing bottlers in our US system, CCR, Consolidated, United and Swire, to operate as one highly aligned and highly competitive national product supply system.”
Sandy Douglas, executive vice-president and president of Coca-Cola North America, added: “The National Product Supply System will benefit all of our US bottling partners by driving our production system to manufacture products at the lowest optimal cost. The board of the NPSG will focus on infrastructure planning, innovation planning, and optimal sourcing. Importantly, we believe the NPSS structure allows us to leverage our significant system scale with the unique competitive advantage of being able to act with speed. This will be enabled by the outstanding commercial capabilities of a strong local bottling system.”
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