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Bottling and distribution of Coke products get improved regional hub

Oct. 08–A nearly four-year process that has transferred control of Coca-Cola’s bottling and distribution operations over a swath of the Southeast has been completed, giving officials in Baton Rouge more control over how drinks are sold in south Louisiana.

Coca-Cola Bottling Co. United, based in Birmingham, Alabama, is now in charge of a territory that stretches from Lake Charles to Tallahassee, Florida, and goes as far north as Chattanooga, Tennessee. The west region, headquartered in Baton Rouge, now stretches as far east as the Mississippi- Alabama state line.

“The west region is bigger than our company used to be,” said Susanne Hall, vice president of the territory. More than 59 million cases of soft drinks and other beverages are sold in the territory. Before 2014, that amount was sold in Coca-Cola United’s territories, which included markets such as Lafayette; Biloxi- Gulfport, Mississippi; and Savannah, Georgia.

Hall, a New Iberia native, has been president of the west region since January 2016. Before that, she worked on the corporate side for Coca-Cola in Atlanta and was in charge of the company’s territory from the Canadian border to Miami. At that time, the company was turning over corporate bottling to local franchisees like Coca-Cola United.

One of the first phases of Coca-Cola United’s expansion put virtually all of the Louisiana market under its control in 2015. All but the small region around Minden in northwest Louisiana, which is owned by a local bottler, is controlled by the privately held company.

Since United took over the Louisiana market, the company has added more than 70 employees at its bottling and distribution center in Harahan. The company spent more than $28.2 million on capital investment at its facilities statewide. That includes $13 million in Harahan, where four gantry cranes in the 10-story warehouse were replaced to make it easier to access the 1.1 million cases of soft drinks that are stored in the plant at any given time. It has a dozen loading docks.

Also part of the New Orleans-area work was nearly $1 million to set up a print shop to produce banners and stand-up displays for grocery stores. “Before that, if they were getting any print shop material, it was coming from Atlanta,” Hall said.

There was less work needed in Baton Rouge, where the Plank Road plant opened in January 2009, with $700,000 spent on office space at the facility.

But Hall said Coca-Cola United spent about $8 million on the Baton Rouge plant so it could produce new portion sizes, such as 24-ounce cans of soft drinks and sleek cans of Dasani. That’s a large investment by the company on one facility, she said.

A $5 million upgrade is being planned for 2018, which will allow the plant to start manufacturing Powerade bottles.

The Coca-Cola Co. serves as the marketing arm for the soft drink giant. It produces the syrup for soft drinks, including the secret formula for Coca-Cola Classic, and sells it to bottlers. The company also handles national customers, such as Walmart and Walgreen’s, and national advertising campaigns, such as commercials that run during the Super Bowl or on prime-time network television.

Local bottlers such as Coca-Cola United manufacture soft drinks and distribute them to grocery and convenience stores and vending machines. They also handle local marketing, such as buying newspaper advertisements and space on billboards, and put personalized advertising in stores, such as LSU- and Southern University-themed displays.

The Baton Rouge Coca-Cola plant not only produces sparkling beverages, such as Coke Classic, Diet Coke and Sprite, but Dasani water and Powerade sports drinks. Of the more than 750 different drinks that Coca-Cola produces, Hall said about 90 percent of those sold in south Louisiana are made in Baton Rouge.

Those figures are skewed slightly because of how universally popular Coke is. More than 70 percent of the company’s local sales come from the sparkling beverage division, which includes all of the different variety of Coke. That offsets the sales of something like Dunkin Donuts iced coffee, which is made at another plant and brought to Baton Rouge for distribution.

Putting more authority over local operations in Baton Rouge has paid off in a number of ways. Coca-Cola recently announced a partnership with the New Orleans Pelicans that will make it the official soft drink partner of the NBA team.

“In the past, we would have had to go up to the Coca-Cola Co. to get this approved and there would have been a lot of red tape and people involved in the decision who do not live in Louisiana,” Hall said. “But we know what the Pelicans mean to the state so we were able to get the deal done.”

And during Hurricane Harvey relief efforts, Hall was able to donate water and other drinks to volunteers from the Cajun Navy, who were headed to Texas. “We made the decision in a snap,” she said.

The benefits of more local control are starting to pay off on the bottom line for Coca-Cola United. The company’s share of sparkling soft drink sales in the New Orleans market has grown by nearly a percentage point, giving Coke products 74 percent of the market. That’s at a time when Houma- Thibodaux, which is also in the New Orleans region, has seen an economic downturn caused by low oil prices. “We’re pretty proud of that,” Hall said. “Not many companies can say they are growing and investing in the state.”

Hall said the volume of drink sales in New Orleans is 2.3 percent more than had been budgeted for this year.

In Baton Rouge, Coca-Cola continues to dominate the market. Coke products account for 84 percent of the market for sparkling beverage sales. That’s even a greater share of the market than Coke can claim in its home territory of Atlanta. And Powerade accounts for the majority of sports drink sales in Baton Rouge; nationally, Gatorade is the dominant drink in the category, and Powerade has a share in the “low double-digits,” Hall said.

“There’s no better place to sell Coca-Cola than in Louisiana,” she said.

_ By Timothy Boone, The Advocate, Baton Rouge, La.

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(c)2017 The Advocate, Baton Rouge, La.

Visit The Advocate, Baton Rouge, La. at www.theadvocate.com

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