Coca-Cola to optimise production by integrating bottlers in US

24 September 2015 (Last Updated September 24th, 2015 18:30)

Coca-Cola has formed a new National Product Supply System (NPSS) in an effort to streamline its production in the US.

bottling plants

Coca-Cola has formed a new National Product Supply System (NPSS) in an effort to streamline its production in the US.

The firm intends to bring together Coca-Cola Refreshments (CCR) and its independent producing bottlers, Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola USA (Swire) under the NPSS.

The three bottlers, along with CCR and Coca-Cola North America, will form the National Product Supply Group (NPSG).

"The National Product Supply System will benefit all of our US bottling partners by driving our production system to manufacture products at the lowest optimal cost."

As a part of the streamlining initiative, the beverage corporation intends to divest in nine production facilities under CCR to the three NPSS bottlers Consolidated, United and Swire. The nine facilities are valued at $380m.

The transition under the transaction is expected to be processed between 2016 and 2018.

Coca-Cola North America executive vice-president and president Sandy Douglas said: "The National Product Supply System will benefit all of our US bottling partners by driving our production system to manufacture products at the lowest optimal cost.

"The board of the NPSG will focus on infrastructure planning, innovation planning, and optimal sourcing. Importantly, we believe the NPSS structure allows us to leverage our significant system scale with the unique competitive advantage of being able to act with speed.

"This will be enabled by the outstanding commercial capabilities of a strong local bottling system."

European bottlers under the beverage giant formed a merged entity in August.

The merger integrated Coca-Cola Enterprises, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke to form Coca-Cola European Partners, which operates across 13 countries and serves around 300 million consumers.


Image: Coca-Cola streamlines business through new supply system set-up. Photo: courtesy of The Coca-Cola Company.