Coke to Shed U.S. Distribution and Manufacturing

The soft-drink company will focus on the beverage side of things.

March 25, 2016

ATLANTA – The Coca-Cola Company has decided to sell its U.S. distribution and manufacturing operations within a year to focus on its concentrate-making business, The Wall Street Journal reports.

That will be quite a change for the soft drink maker, which had snapped up a large bottler six years ago with plans to revamp its delivery trucks and warehouses. However, after 2014 and 2015 brought lackluster sales for the company, Coke has decided to shed the heavy assets. By selling distribution and manufacturing operations, the company will tighten its operating margins and slash employees by 84,000.

Coke believes having smaller U.S. partners will help with distribution. “The marriage of national with local is the best of both worlds,’’ said Sandy Douglas, North American CEO for Coke.

The company will give back the reigns to long-term bottling colleagues Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Co. United and Swire Pacific Ltd. Right now, Coke has signed agreements with around 10 companies representing close to 50% of its distribution area and more than a dozen soft drink manufacturing facilities. The rest will be gone by the end of 2017.

Rival PepsiCo Inc. has announced it has no plans to change its relationship with its two largest U.S. bottlers.

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