Coca-Cola signs letters of intent for facilities, territories in Bainbridge area

Published 4:56 pm Friday, June 17, 2016

In cadence with The Coca-Cola Company’s efforts to accelerate the implementation of its 21st Century Beverage Partnership Model, Coca-Cola Bottling Company UNITED, Inc., (“UNITED”), headquartered in Birmingham, Alabama, announced today it has signed Letters Of Intent (“LOI”) with Coca-Cola Consolidated (“Consolidated”) and The Coca-Cola Company with respect to territory in the Southeast United States. These territories include portions of Alabama, Georgia, Florida, Mississippi, and South Carolina. The intent of these agreements is to allow for more contiguous operations for both UNITED and Consolidated.

Under the Letters of Intent, UNITED will exchange its distribution territories in Spartanburg and Bluffton, South Carolina for Consolidated’s distribution territories in Florence, Alabama and Panama City, Florida. Furthermore, UNITED will also acquire the distribution facilities located in Leroy, Mobile, and Robertsdale, Alabama; Bainbridge, Columbus, and Sylvester, Georgia; and Laurel and Ocean Springs, Mississippi. UNITED will also acquire the production facility in Mobile, Alabama.

“We are delighted to be a part of these anticipated transactions with Coca-Cola Consolidated and The Coca-Cola Company as they will provide for a more rational franchise footprint for both companies,” said John H. Sherman, President and Chief Executive Officer, Coca-Cola UNITED. “We have such admiration for Consolidated and their highly capable associates; many of whom we already know. As our associates in Spartanburg and Bluffton, South Carolina, are expected to transition to Consolidated, I am immensely grateful for their many contributions and dedication to UNITED. I am also excited for their future with our fellow system bottler, Coca-Cola Consolidated.”

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Starting with the acquisition of Oxford, Alabama, in the first quarter of 2014 (the initial market in the refranchising process), UNITED has successfully transitioned 17 Coca-Cola facilities and territories, including over 2500 associates serving approximately 38,500 customers in the Southeast.

To sustain its local business operating model, UNITED also created over 370 incremental positions across these markets; representing a 15.0% increase in its workforce at the local sales center level. Additionally, UNITED has added 90 positions to its Customer Solutions Center and Corporate Services Division located in Birmingham, Alabama and 40 positions to its Equipment Refurbishment Center located in Montgomery, Alabama.

Beginning over a decade ago, The Coca-Cola Company began working with its bottling partners to develop the 21st Century Beverage Partnership Model, which evolves the Coca-Cola System to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment.

Working collectively with local bottlers and their consumers and customers, and the Coca-Cola System, we will achieve the benefits of more rational and contiguous operating territories across the Southeast. Ultimately, the Southeastern and overall North American landscape will be comprised of economically aligned bottling partners that have the capability to better serve customers and maintain strong, local ties across diverse Coca-Cola markets.

The Letters of Intent announced today are subject to the parties reaching definitive agreements. To create the highest probability of a successful transition for all constituents, the duration of the transition is anticipated to extend to approximately October, 2017. Financial terms were not disclosed.