Coke To Implement New Distribution System, Sell Nine Plants

The Coca-Cola Company on Thursday announced an overhaul of its bottling operations covering nearly all of its U.S. production.

Coke's National Product Supply Group will include three independent bottlers — Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola USA — along with the company's North American group and the company-owned Coca-Cola Refreshments.

Together, those bottlers cover about 95 percent of the company's U.S. volume.

Under the terms of the agreement, the three independent bottlers will each acquire facilities within new distribution territories that are currently owned by Coca-Cola Refreshments.

CCR is set to part with nine plants worth an estimated $380 million, including facilities in Arizona, Colorado, Indiana, Louisiana, Maryland, Ohio and Virginia.

Coke officials said the new distribution system would make the company "stronger, more aligned and more competitive." The cost-cutting efforts come amid sliding sales for soft drinks nationwide.

“We will leverage the strengths and capabilities of the four largest producing bottlers in our U.S. system — CCR, Consolidated, United and Swire — to operate as one highly aligned and highly competitive national product supply system,” said CEO Muhtar Kent.

Coke began altering its bottling operations last year after purchasing its largest independent bottler — which became Coca-Cola Refreshments — for $12 billion in 2010.

Earlier this year, the company sold distribution territories in the Mid-Atlantic, Midwest and Ohio Valley from CCR to Coca-Cola Bottling Co. Consolidated. Company officials said that transition would continue and that "decisions on any remaining production facilities in those territories will also be considered at that time."

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