Reyes Holdings LLC has signed a letter of intent with The Coca-Cola Company to acquire the distribution rights for the soda giant’s products in California and Nevada as well as three bottling facilities.
“We chose Reyes Holdings as our new partner in California and Nevada because they are a long-term operator that is well positioned to invest in this local business and help us grow our total portfolio of brands,” Coca-Cola North America president J. Alexander “Sandy” Douglas Jr. said in a press release. “We are very pleased that Reyes Holdings will expand its already significant role in the U.S. Coca-Cola system.”
“It’s been exciting being part of the Coca-Cola system in the Midwest, and we see tremendous opportunity with this territory expansion into the Western U.S.,” Chris Reyes, founder and co-chairman of Reyes Holdings, added.
Financial terms of the deal were not disclosed. The next step for the parties is a definitive agreement, which will follow after closing.
The move is part of Coca-Cola’s initiative to refranchise all of its bottling territories by the end of the year.
The transaction adds to Reyes Holdings’ existing operations in California and Nevada, which includes the Reyes Beverage Group, the United States’ largest beer wholesaler operation, and the Martin-Brower Company LLC, a food service distributor servicing McDonald’s and other brands.
Reyes Holdings is now a Coca-Cola bottler in parts of eight states, including a large swath of the Midwest and West. The new deal, involving the West Operating Unit of Coca-Cola Refreshments, includes the Los Angeles, San Francisco, San Diego and Las Vegas markets.
Recall that Reyes Holdings made its first major move outside of the beer category in February 2014 by striking a deal for Coca-Cola’s distribution rights in Chicago as well as Northwest Indiana and Southeast Wisconsin.
In April 2016, Reyes Holdings’ Great Lakes Coca-Cola Distribution LLC made its first foray into production by acquiring facilities in Alsip and Niles, Ill.; Detroit and Grand Rapids, Mich.; Eagan, Minn.; and Milwaukee, Wisc.
Read the full press release below.
Reyes Holdings to Expand Its Footprint in U.S. Coca-Cola System by Adding Territory in California and Nevada
Reyes Holdings to Operate in Eight States, with Territories in Large Portions of the Midwest and West; Expansion Into California and Nevada Includes Three Bottling Facilities
Coca-Cola Has Reached Definitive Agreements or Signed Letters of Intent to Refranchise Bottling Territories that Account for More Than 80% of Total Coca-Cola Refreshments Volume
Atlanta — Reyes Holdings LLC – one of the largest food and beverage distribution companies in the world – has reached a new letter of intent with The Coca-Cola Company for territory in California and Nevada, including the major metropolitan markets of Los Angeles, San Francisco, San Diego and Las Vegas.
Reyes Holdings signed its first letter of intent for Coca-Cola territory in February 2014. Reyes went on to launch Great Lakes Coca-Cola Distribution LLC, which serves parts of six states in the Midwest, including the cities of Chicago, Detroit, Minneapolis and Milwaukee.
The letter of intent announced today involves the West Operating Unit of Coca-Cola Refreshments, which is part of The Coca-Cola Company. Reyes Holdings already has extensive operations in California and Nevada, including Reyes Beverage Group, the largest beer distribution operation in the United States, and The Martin-Brower Company LLC, a global food service distributor servicing McDonald’s and other high-quality brands.
With the addition of more territory, Reyes Holdings, which is based in Rosemont, Ill., will serve as a Coca-Cola bottler in parts of eight states.
“We chose Reyes Holdings as our new partner in California and Nevada because they are a long-term operator that is well positioned to invest in this local business and help us grow our total portfolio of brands,” said J. Alexander “Sandy” Douglas Jr., President, Coca-Cola North America. “We are very pleased that Reyes Holdings will expand its already significant role in the U.S. Coca-Cola system.”
“It’s been exciting being part of the Coca-Cola system in the Midwest, and we see tremendous opportunity with this territory expansion into the Western U.S.,” said Chris Reyes, founder and co-Chairman of Reyes Holdings.
“We look forward to being the best local Coca-Cola bottler and distributor we can be in communities across California and Nevada, while at the same time contributing back to the places in which we operate,” added Jude Reyes, founder and co-Chairman of Reyes Holdings.
The letter of intent announced today is the first step in the process. The next stage is a definitive agreement, followed by a closing.
21st Century Beverage Partnership Model History
This agreement is part of a plan to refranchise all of The Coca-Cola Company’s U.S. bottling territories by the end of 2017.
The Coca-Cola Company began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment. A critical step was the Company’s acquisition of the North American territories of Coca-Cola Enterprises in 2010, which led to the establishment of Coca-Cola Refreshments.
Since the closing of the transaction involving the North American territories of Coca-Cola Enterprises, The Coca-Cola Company has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.
Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.
Including the West Operating Unit, the Company has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 75% of total U.S. bottler-delivered distribution volume, which equates to more than 80% of total Coca-Cola Refreshments volume. The Company also has reached definitive agreements or signed letters of intent for 47 of the 51 cold-fill production facilities in the United States.
The Coca-Cola Company and Reyes Holdings are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms are not being disclosed.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, offering over 500 brands to people in more than 200 countries. Of our 21 billion-dollar brands, 19 are available in lower- or no-sugar options to help people moderate their consumption of added sugar. In addition to our namesake Coca-Cola drinks, some of our leading brands around the world include: AdeS soy-based beverages, Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas and coffees, Honest Tea, Minute Maid juices, Powerade sports drinks, Simply juices, smartwater, Sprite, vitaminwater, and Zico coconut water. At Coca-Cola, we’re serious about making positive contributions to the world. That starts with reducing sugar in our drinks and continuing to introduce new ones with added benefits. It also means continuously working to reduce our environmental impact, creating rewarding careers for our associates and bringing economic opportunity wherever we operate. Together with our bottling partners, we employ more than 700,000 people around the world. For more information, visit our digital magazine Coca-Cola Journey at www.coca-colacompany.com, and follow The Coca-Cola Company on Twitter, Instagram, Facebook and LinkedIn.
About Reyes Holdings, L.L.C.
Reyes Holdings, aligned with leading beverage and foodservice providers, delivers some of the best-known brands and widest variety of food and beverage items to retailers around the world. Annually, the company delivers more than 950 million cases of beverage and food products from over 150 warehouses in North, Central and South America, as well as Europe, the Middle East and Asia Pacific. Reyes Holdings operations include Reyes Beverage Group, the largest beer distributor in the United States representing import, craft and domestic beer brands; The Martin-Brower Company, L.L.C., a global quick-service restaurant distribution business and the largest supplier worldwide of distribution services to the McDonald’s restaurant system; Reinhart Foodservice, L.L.C., one of the largest broadline foodservice distributors in the United States; and Great Lakes Coca-Cola Distribution, L.L.C., a dedicated Coca-Cola bottler, manufacturer and distributor based in the Midwest. Reyes Holdings is the 12th largest privately held company in the United States with more than 24,000 employees and annual sales of approximately $24 billion. For more information about Reyes Holdings, visit the company website at www.reyesholdings.com.