Coca-Cola Splits North American Business

Coca Cola Company has announced plans to restructure its North American business in an attempt to accelerate its franchising efforts and streamline its main focus.

The integrated business in North America will be segmented into a traditional company and a bottler-operating model. The company will consist of two operating units: Coca-Cola North America and Coca-Cola Refreshments.

The decision to return to franchising model in the US was announced back in April 2013. In 2010, Coca-Cola paid $12.3 billion to biggest US bottler, securing control of production and distribution. Coca-Cola took the decision to franchise so it can reduce costs associated with maintaining delivery trucks and warehouses but keeping control of our bottling process.

J.A.M. "Sandy" Douglas will lead Coca-Cola North America and also continue his role as global chief customer officer. Paul Mulligan will lead Coca-Cola Refreshments (CCR), the bottling operations of North America, as president.

The Coca-Cola Americas operating structure will cease to exist. The Latin America Group, led by Group President Brian Smith, will become part of Coca-Cola International.

 
Coca-Cola, as compared to over beverage players in the market, has not done well in 2013. Its stock only gained 8.7%, as compared to Pepsi Co's 18% gain and Monster Beverage's 17% advance. One major beverage company that follows after Coca-cola is Pepper Snapple, which saw a 7.9% this year.

Coca-Cola chairman and CEO Muhtar Kent`s statement about providing flexibility to adjust the business within the Americas in the future is not a promising development for the sustainability of employment and creates concerns on further restructuring and job losses.

We would like to urge affiliates in the Americas to inform us of any changes or effects on the employment or unions' positions caused by this split operation. Please send the relevant information to burcu.ayan@iuf.org.