The gradual evolution of The Coca-Cola Company’s business model in North America takes another step Wednesday, as the cola giant hands the keys to a new bottling operation in the Sunshine State.
Coke announced Tuesday that it has signed a definitive agreement with Coca-Cola Bottling Company of Central Florida, a newly-formed, independent bottling outfit.
The deal follows Coke’s letters of intent, which were signed in February, that hand off sales, distribution, marketing and promotion responsibilities to independent bottlers in the greater Chicago region and central Florida. Reyes Holdings, a massive domestic and craft beer distributor, will take over Coke distribution in the greater Chicago region.
Troy Taylor, an investment banker and longtime advisor to Coke, will serve as the chairman and CEO of the bottling operation in central Florida. Joining him is Reginald Goins, a 16-year veteran at Coke, who will become president and chief operating officer of the Coca-Cola Bottling Company of Central Florida.
Transitioning territories in the region include Tampa/St. Petersburg, Ft. Myers, Ft. Pierce, Lakeland and Sarasota. Coke plans to close the transaction in 2015. Financial terms were not disclosed.
“I grew up enjoying the refreshing taste of Coca-Cola products every day,” Taylor said in a release. “I’m excited and honored to now have a role in creating those genuine Coca-Cola moments for people in the Sunshine State. I believe there is tremendous opportunity to be a leader in Central Florida and I look forward to building strong relationships with our consumers, customers and community.”
Coke also signed letters of intent with five U.S. bottlers in April 2013, divesting distribution rights from the parent company to Coca-Cola Bottling Co. Consolidated (CCBCC), Coca-Cola Bottling Company United Inc., Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works Inc.
The divestments serve as part of a broader strategy for the company, which is still developing in the aftermath of last winter, when Coke divided its North American operations into two units — Coca-Cola North America and Coca-Cola Refreshments (CCR), which oversees the continent’s bottling operations.
A similar tradeoff of bottling and distribution rights is taking place in Tennessee. In May, CCBCC announced that it has expanded its territory to include Morristown and Johnson City, Tenn. CCR previously owned that territory. The second phase of this territorial shift occurred at the beginning of September, when CCBCC took over the Knoxville, Tenn., territory from CCR.
The bottlers and the parent company will work together as the North American business model shifts, the release notes. The collaboration will include further divestment of CCR assets and equipment, a push toward a national product supply system under CCR, a better information technology platform and new beverage agreements that support the evolving model of operations.
Coke declined to provide additional comment on the transaction until it closes.