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Coca-Cola announces strategic plans for its bottler merger, first quarter results

April 20, 2010
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The Coca-Cola Co., Atlanta, announced Steve Cahillane, current president of the North American Business Unit for Coca-Cola Enterprises (CCE), will be president and chief executive officer of Coca-Cola Refreshments Inc. (CCR) once Coca-Cola completes the acquisition of CCE North America, which is expected to occur in the fourth quarter.

Upon completion of the acquisition, Cahillane will lead CCR, which will integrate CCE North America, Coca-Cola North America (CCNA) Foodservice, the Minute Maid/Odwalla Juice business and CCNA Supply Chain Operations into one bottling and customer service operation in the United States and Canada.

Cahillane will work closely with the North America Business Integration team, led by Brian Kelley, in developing a comprehensive plan that can be implemented immediately once the acquisition is approved and closed.

Sandy Douglas will remain president of CCNA. Both Douglas and Cahillane will report to Muhtar Kent, chairman and chief executive officer of The Coca-Cola Co.

Coca-Cola also reported today that worldwide case volume increased 3 percent in the first quarter of the year. The company gained global value share and maintained volume share in non-alcohol ready-to-drink beverages and core sparkling beverages, including juice and juice drinks, sports drinks, coffee and packaged water.

“I am once again pleased with the results of the quarter as we continue to grow our dynamic global business,” Kent said, in a statement. “During the quarter we continued to achieve solid business results worldwide, all while taking decisive action to strategically advance our North America business and further strengthen our franchise system in Europe. Despite expected ongoing challenges in global economic conditions, we continue to invest in our business and build the health of our brands fueled by world-class marketing and innovation. This led to continued value share gains and strong and consistent cash flow.”

In North America, the economic downturn and harsh winter in many parts of the United States attributed to a 2 percent decline in unit case volume, Coca-Cola said. Net revenues for the quarter decreased 6 percent, reflecting a 6 percent decrease in concentrate sales and a 1 percent impact from price/mix, which was partially offset by a 1 percent positive currency impact, the company said.

Sparkling beverages declined 1 percent in the quarter in North America. Despite the decline, the company said the figure shows sequential improvement quarter on quarter and positive impact by marketing initiatives, including the Vancouver Winter Olympics and the Super Bowl. Signature Coca-Cola continued to increase its favorite brand score advantage versus the competition among the teen and mom consumer segment, the company reported. In addition, Coca-Cola Zero delivered double digit unit case volume growth in the quarter, which continues its 16 consecutive quarters of double-digit growth, it said.

The company reported that still beverage unit case volume decreased 2 percent during the quarter as the premium segment continues to be impacted by the economy. However, the company reported the unit case volume of its Simply line of juices grew 26 percent in the quarter, which includes the expansion of single-serve packaging in the cold drink channel.

Coca-Cola remains optimistic as the integration planning for the CCE acquisition remains on track with an expected fourth quarter close, it said.

“As we look ahead to the year 2020, we see tremendous growth opportunities for our franchise system for the entire non-alcoholic ready-to-drink beverage industry,” Kent said, in a statement. “We are working closely with our bottling partners around the globe, leveraging our scale and the increased presence of our brands. We remain confident in our ability to deliver against our strategies while laying the foundation for consistent, profitable and sustainable long-term growth, inspired by our 2020 Vision in a growing world of refreshment.”

For more on Coca-Cola's acquisition of CCE, click here.

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