Dive Brief:
- Coca-Cola will split into two operating units in North America on Jan.1, part of a plan announced in April to return to a franchise model in which independent operators will deliver drinks to retailers.
- The move comes amid shrinking sales for sodas, particularly diet brands. Coca-Cola believes the split will accelerate growth in North America, which has lagged that of global operations.
- Coca-Cola veterans will head up the new units. J.A.M. (Sandy) Douglas will serve as group president for Coca-Cola North America. Paul Mulligan will lead bottling unit Coca-Cola Refreshments.
Dive Insight:
The news that Coca-Cola would return to what was once known as "the system," in which the company manufactured concentrate and ran marketing while bottlers sold soda to retailers, is only a few months old. What's a little jarring about this is that the news Coca-Cola would dismantle "the system" and run more of the entire manufacturing and supply chain itself is also only months old!
We hope and trust that Coke knows what it's doing. And we admire any company that can change strategy quickly when things don't work out. Still, this is happening so fast it makes our head spin. For an explanation of why Coca-Cola is returning to the franchise system, check out this article. For an explanation of why it dumped the franchise system, check out this case study.
