Reyes Holdings LLC, Rosemont, Ill., announced that it has reached a new letter of intent with Atlanta-based The Coca-Cola Co. 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 the 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 new letter of intent involves the West Operating Unit of Coca-Cola Refreshments, which is part of The Coca-Cola Co. 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 Co. LLC, a global food service distributor servicing McDonald's and other high-quality brands, it says.

With the addition of more territory, Reyes Holdings now 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 of Coca-Cola North America, in a statement. "We are very pleased that Reyes Holdings will expand its already significant role in the U.S. Coca-Cola system."

Chris Reyes, founder and co-chairman of Reyes Holdings, said, "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."

Jude Reyes, founder and co-chairman of Reyes Holdings, added, "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."

The letter of intent 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 Co.’s U.S. bottling territories by the end of 2017, the company says.

The Coca-Cola Co. 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, the company says. A critical step was its 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 Co. 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 Coca-Cola Co. has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 75 percent of total U.S. bottler-delivered distribution volume, which equates to more than 80 percent 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 Co. and Reyes Holdings are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates, the companies say. Financial terms are not being disclosed.