★ Coca-Cola announces sell-off of bottling ops :– → That's an interesting development! Coca-Cola's decision to sell off its bottling operations has been in the works for a while now, and it's finally happening. Here's a quick breakdown :– ★ What's being sold? ▪ Coca-Cola is currently divesting its asset-heavy bottling operations in various regions, including India and North America. ▪ This includes selling off bottling plants and transferring business operations to existing bottlers. ★ Why is Coca-Cola doing this? ▪ The company wants to streamline its business and focus on its core strengths, which are marketing, branding, and developing new beverages. ▪ Owning and managing bottling operations is capital-intensive and requires a different set of skills than what Coca-Cola excels at. ▪ By selling off these assets, Coca-Cola can free up resources to invest in other areas, such as digital marketing and R&D. ★ What are the potential impacts? ▪ The sale could lead to job losses in the bottling sector, particularly in regions where Coca-Cola is selling off its own plants. ▪ It could also change the dynamics of the beverage industry, as smaller bottlers become more powerful. ▪ However, it could also lead to increased efficiency and innovation, as bottlers compete to win Coca-Cola's business.
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Senior Partner at Titus & Co, Advocates, Delhi - IPR | Dispute Resolution | General Commercial & Corporate | Transactions | Contracts | White Collar Crimes & Investigations | Regulatory | Public Policy
As per the reports coming in for some time, Coca-Cola may unlock the potential of packaged beverages in India. The move aims to take forward Coca-Cola’s global strategy gradually reducing asset-heavy bottling operations, while stepping up focus on brand building, innovation and competitive strategy. Generally speaking, MNCs’ strategy to transition from asset-heavy operations to focusing on brand building, innovation, and competitive strategy aligns with modern business trends. Reducing asset-heavy operations, such as manufacturing and physical infrastructure, allows MNCs to cut costs and increase operational flexibility. MNCs can then concentrate on their core competencies—such as innovation and strategic brand management—which can lead to more robust competitive advantages. This also helps them expanding into new markets and pursuing strategic partnerships. Reducing reliance on physical assets can also mitigate certain risks, such as those related to asset depreciation, maintenance costs, and economic downturns affecting asset-heavy industries. While the strategy offers many benefits, it may also come with challenges. This might affect supply chain control or operational stability. Hence, careful management of the transition and mitigation of associated risks are crucial.
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Coca-Cola recently made $293 million from refranchising its bottling operations in certain territories in India, streamlining its supply chain and enhancing execution. This move aligns with the #franchisee business model, where bottling partners manage operations effectively, contributing to the company's growth. Despite a slow start in India, Coca-Cola remains optimistic about long-term prospects and expects a strong year ahead. The company's focus on franchisees helps streamline operations and drive profitability, as seen in its recent earnings report with net revenues growing 3% to $11.3 billion in the March quarter. This refranchising strategy underscores Coca-Cola's commitment to efficiency and profitability, appealing to #investors seeking growth opportunities. For #entrepreneurs, this move highlights the potential in beverage franchising. #Beverage industry professionals can learn from Coca-Cola's focus on streamlining operations, while manufacturers benefit from insights into optimizing supply chains. Beverage brand owners recognize the importance of strategic partnerships, and #CEOs observe the impact of franchise models on business agility and revenue growth. #Leadership #PepsiCo #Bisleri #CocaCola #Kinley #Aquafina #BeverageIndustry #BottledWaterIndia #Manufacturers #Distributors https://lnkd.in/gRHNjhX8
Coca-Cola makes $293 million from refranchising India bottling operations
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Comparing Celsius(CELH) + Pepsi(PEP) partnership with Monster(MNST) + Coca Cola(KO). $MNST + $KO - Signed in 2014. - $KO bought 16.7% equity stake in $MNST for $2.15B - $KO transferred its energy drink portfolio (NOS, Full Throttle, Burn) to $MNST and $MNST transferred non-energy brands to $KO (Peace Tea, Hansen's Juice Products) - $MNST became $KO's exclusive energy play. $KO became preferred global partner. - $MNST gets to leverage $KO's worldwide bottling operations. For context, $KO makes money by selling concentrates to independent bottlers and earns royalties as these bottlers sell to distributors/retailers. This allows for large global presence with minimum overhead. $MNST leveraged same structure for rapid growth. - $KO installed 2 directors on $MNST's board. - Both brands were working together since 2008 gradually expanding scope of partnership. $CELH + $PEP - Signed in 2022. - $CELH's US distribution goes to $PEP. Later, Canada was also included. - $PEP invests $550M in $CELH and gets 8.5% stake via preferred stock with 5% dividend attached - $PEP can nominate 1 director to serve on Celsius’ Board. - $CELH chose Suntory (Japanese beverage giant) for distribution in UK, Ireland and France - $CELH is using $PEP's DSD (direct store delivery) network. Though they are using their own contract bottlers. Their international expansion strategy seems different than $MNST as they are not using a large existing bottling network rather focusing on specific retailers / gym networks to build a core audience in each market, an approach described by their CEO as "drill deep strategy". - $CELH and $PEP energy/hydration portfolios remain seperate for now. $PEP has Rockstar, Mountain Dew, Gatorade which conflict with $CELH in terms of positioning. $MNST + $KO is better aligned. $CELH + $PEP has room to mature further.
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Global soft drinks major the Coca-Cola Company has earned $290 million (around Rs 2,420 crore) from India in the March quarter by refranchising its bottling operations to its existing bottlers in three key markets here. Click on the link below to know more... #retailnews #retailtrends #retailsector #retailindustry #retailing #retailresults #retailupdates #businessnews #retailgrowth #retailsectornews #retailindia #retailtrends #retailbusiness #ir #IndiaRetailing
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It's great to see The HEINEKEN Company, the renowned brewer, celebrate a significant achievement as it reports its first quarterly increase in sales volumes after a challenging period of decreased demand in 2023, attributed in part to higher commodity and raw material prices. This positive sales momentum signals a promising result for the company. However, it's important for any company, whether in the #brewing sector or beyond, to consider the risks of relying solely on sales growth, especially in fluctuating market conditions. Understanding and forecasting the impact of high costs on raw materials and production expenses is paramount. Enter the crucial role of Cost Model Forecasts. Tailored to the unique specifications of a company's branded or private label products, these forecasts empower procurement and buying teams to effectively manage costs and margins. Moreover, #Equity Analysts benefit greatly from utilizing these tools to monitor the influence of changing costs on company performance and quarterly earnings. This analytical insight enables them to identify opportunities within dynamic markets. In essence, while robust sales results provide a commendable boost, the strategic integration of cost management and forecasting tools is indispensable for sustaining profitability and navigating market fluctuations effectively. https://lnkd.in/eGZCTkz3 Mandeep Singh Mark Iantosca Sarah Garcia Stewart Jones Jay Inamdar Mintec Urner Barry Jon W. Hansen
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