The FINANCIAL — Reyes Holdings LLC – one of the largest food and beverage distribution companies in the world – has reached a new letter of intent with The Coca-Cola Company for territory in California and Nevada, including the major metropolitan markets of Los Angeles, San Francisco, San Diego and Las Vegas.
Reyes Holdings signed its first letter of intent for Coca-Cola territory in February 2014. Reyes went on to launch Great Lakes Coca-Cola Distribution LLC, which serves parts of six states in the Midwest, including the cities of Chicago, Detroit, Minneapolis and Milwaukee.
The letter of intent announced today involves the West Operating Unit of Coca-Cola Refreshments, which is part of The Coca-Cola Company. Reyes Holdings already has extensive operations in California and Nevada, including Reyes Beverage Group, the largest beer distribution operation in the United States, and The Martin-Brower Company LLC, a global food service distributor servicing McDonald’s and other high-quality brands., according to Coca-Cola.
With the addition of more territory, Reyes Holdings, which is based in Rosemont, Ill., will serve as a Coca-Cola bottler in parts of eight states.
“We chose Reyes Holdings as our new partner in California and Nevada because they are a long-term operator that is well positioned to invest in this local business and help us grow our total portfolio of brands,” said J. Alexander “Sandy” Douglas Jr., President, Coca-Cola North America. “We are very pleased that Reyes Holdings will expand its already significant role in the U.S. Coca-Cola system.”
“It’s been exciting being part of the Coca-Cola system in the Midwest, and we see tremendous opportunity with this territory expansion into the Western U.S.,” said Chris Reyes, founder and co-Chairman of Reyes Holdings.
“We look forward to being the best local Coca-Cola bottler and distributor we can be in communities across California and Nevada, while at the same time contributing back to the places in which we operate,” added Jude Reyes, founder and co-Chairman of Reyes Holdings.
The letter of intent announced today is the first step in the process. The next stage is a definitive agreement, followed by a closing.
21st Century Beverage Partnership Model History
This agreement is part of a plan to refranchise all of The Coca-Cola Company’s U.S. bottling territories by the end of 2017.
The Coca-Cola Company began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment. A critical step was the Company’s acquisition of the North American territories of Coca-Cola Enterprises in 2010, which led to the establishment of Coca-Cola Refreshments.
Since the closing of the transaction involving the North American territories of Coca-Cola Enterprises, The Coca-Cola Company has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.
Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.
Including the West Operating Unit, the Company has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 75% of total U.S. bottler-delivered distribution volume, which equates to more than 80% of total Coca-Cola Refreshments volume. The Company also has reached definitive agreements or signed letters of intent for 47 of the 51 cold-fill production facilities in the United States.
The Coca-Cola Company and Reyes Holdings are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms are not being disclosed.