The FINANCIAL — The Coca-Cola Company is moving closer to completing the refranchising of its Company-owned territories in the United States, thanks to a new letter of intent involving a significant area of the Northeast.
Coca-Cola Refreshments executives Paul Mulligan and Fran McGorry are joining together to form a new bottling company called Liberty Coca-Cola Beverages LLC. They have signed a letter of intent for territories that include metropolitan New York, Philadelphia, most of the state of New Jersey and part of Delaware, plus four production facilities. This area is known as the Tri-State Metro Operating Unit of Coca-Cola Refreshments, which is a unit of The Coca-Cola Company.
Mulligan and McGorry are experienced veterans of the Coca-Cola system. Mulligan has served as president of Coca-Cola Refreshments since 2014. His previous experience in the system includes leadership roles in operations around the world. He will be co-owner of the new Liberty Coca-Cola Beverages.
McGorry is president of the Tri-State Metro Operating Unit. He will be co-owner of Liberty Coca-Cola Beverages and will continue to be the top executive in charge of the territory. Prior to his current role, McGorry’s career included serving as president of the Philadelphia Coca-Cola Bottling Co. He is a native of Philadelphia and has strong, local connections throughout the Tri-State area, according to the Coca-Cola Company.
The next step is a definitive agreement, followed by a closing.
The Coca-Cola Company remains on track to complete refranchising of its U.S. territories by the end of 2017. There are agreements or letters of intent for 100% of the U.S. territories of Coca-Cola Refreshments.
“This is a critical milestone in a journey that dates back more than a decade,” said J. Alexander “Sandy” Douglas Jr., President, Coca-Cola North America. “This important bottling territory will be in great hands under the leadership of Paul and Fran. They are experienced, locally respected operators who see many growth opportunities in the Tri-State market.”
“Becoming a Coca-Cola franchise owner is an honor and a privilege, with a responsibility and challenge we respect,” Mulligan said.
“I have been part of the Coca-Cola family for 30 years, and we see this as a great opportunity to accelerate the business while being an integral part of the local community,” McGorry said.
21st Century Beverage Partnership Model History
This agreement is the latest element of an ongoing plan to refranchise all of The Coca-Cola Company’s U.S. bottling territories.
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 Tri-State Metro Operating Unit, the Company has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 80% of total U.S. bottler-delivered distribution volume, which equates to approximately 90% of total Coca-Cola Refreshments volume in North America. With this new letter of intent, 100% of the U.S. territory of CCR is under agreement. The Company also has reached definitive agreements or signed letters of intent for all 51 cold-fill production facilities in the United States. The Tri-State Metro Operating Unit has production facilities in Philadelphia, Moorestown, N.J., Maspeth, N.Y., and Elmsford, N.Y.
Mulligan, McGorry and The Coca-Cola Company 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.