Published On: 12.09.15 | 

By: Michael Tomberlin

Birmingham’s Coca-Cola distributor expanding into Coke’s hometown of Atlanta

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In the future, if you drink a Coke at Coca-Cola’s corporate headquarters in Atlanta, you might want to toast a Birmingham company for putting it in your hands.

Birmingham’s Coca-Cola Bottling Company United Inc. said today it has signed a letter of intent (LOI) with the Coca-Cola Company to expand distribution territories into a large part of Georgia, including metro Atlanta where Coca-Cola is based.

Coca-Cola United's current and proposed distribution territories. (contributed)

Coca-Cola United’s current (green) and proposed (red) distribution territories. (contributed)

In addition to metro Atlanta, the LOI would give United Athens, Macon and Rome. Also, as part of the National Product Supply System, United will acquire production facilities in College Park and Marietta, Ga.; Cleveland, Tenn.; and Montgomery.

The latest deal is among several United has been signing with existing Coke distribution territories to add contiguous operating areas across the Southeast. The refranchising allows for an improved, more integrated information technology platform and a new beverage agreement that supports the Coca-Cola system’s evolving U.S. operating model.

“Together with our bottling partners, we are changing the landscape of our U.S. system,” Sandy Douglas, president of Coca-Cola North America, said. “Today’s announcement further advances our efforts to balance national scale and local capability, which will help us significantly increase our leadership and enhance our competitive advantage in the U.S. business.”

Coca-Cola and United still have to reach definitive agreements on the deal and financial terms were not disclosed. The transition of the distribution territories and production facilities to United is anticipated to take place before the end of 2017.

Coca-Cola United Chairman and CEO Claude Nielsen. (contributed)

Coca-Cola United Chairman and CEO Claude Nielsen. (contributed)

United began the refranchising process when it acquired the Oxford, Alabama, territory in the first quarter of 2014. Its footprint now extends into nearly all of Louisiana, much of Georgia and parts of South Carolina, Florida, Mississippi and Tennessee.

Coca-Cola United Chairman and CEO Claude Nielsen said the acquisition of Atlanta brings with it “tremendous opportunity and significant responsibility.”

“The specialness of Coke’s hometown makes it the ideal market to implement our local operating model,” he said. “We feel privileged to be given the opportunity to serve this market. We also understand and accept the responsibility to perform consistently and provide reliable service to all customers.”

Nielsen said the company will be involved in all of the communities it serves.

Birmingham Mayor William Bell said Coca-Cola’s growth throughout the Southeast can only mean good things for its headquarters in the Magic City.

Coca-Cola United distributes from centers like this one in Montgomery. (contributed)

Coca-Cola United distributes from centers like this one in Montgomery. (contributed)

“I am very pleased with the news of Coca-Cola United’s continued expansion,” Bell said. “This company, founded in Birmingham in 1902, continues to create opportunities and jobs, making a positive impact on our hometown. It is very good to have a local company enjoy this level of growth, which contributes to Birmingham’s current prosperity and dynamic economy.”

Separately, Coca-Cola and United have also reached a definitive agreement governing the transaction announced in September in which United will acquire the production facility in New Orleans in March 2016.

United is the third largest bottler of Coca-Cola products in the United States and the largest privately held Coca-Cola bottler, with more than 4,900 employees. United primarily produces, markets and distributes Coca-Cola, Diet Coke, Coke Zero, Sprite, Fanta, Dasani water, POWERADE, vitaminwater and many more under exclusive franchise agreements with the Coca-Cola Company and other soft drink manufacturers.