NRI Dunia
Think Outside The Box

Coca-Cola bottlers are feeling flat, even as US grocery sales sparkle

Martin Williams’ great-grandfather founded their Coca-Cola distribution business in Corinth, Mississippi, in 1907, just a handful of years after Coke was first sold in bottles across the United States.

He’s part of the fourth generation to run it, and he’s determined not to be the last.

Williams’ business is one of nearly 70 US Coca-Cola “bottlers”—third-party, independent companies that put Coke and other beverages into cans and bottles and deliver the drinks to retailers and restaurants in every corner of the country.

The future of such companies is not only critical for their owners and employees but also key for their main supplier—Coca-Cola, the world’s No.1 soft drink maker—which needs them to flourish to help it recover from a slump in sales.

But COVID-19 has upended their business models.

“It was chaos. You just had no idea what the world was going through and what we were up against,” said Williams, the finance head of his family’s firm.

“It’s on our shoulders to try to take our business forward into the future and to maintain the work that our ancestors have done.”

Shoppers in lockdowns snapped up cases of Coke, Fanta and Sprite at grocery stores rather than at gas stations, restaurants and stadiums.

That left bottlers scrambling to keep stores stocked with bigger, often less-profitable packages. Lucrative sales to restaurants and convenience stores are still only a fraction of what they were before the pandemic hit the United States.

The bottlers—now saddled with too much product meant for restaurants—have also been hit by a shortage of aluminum cans due to a surge in demand for canned drinks as people stay home.

Williams, whose business distributes rather than makes drinks, has adapted to this new order over the last six months, while grappling with higher costs for fuel, transportation, labour, safety gear and cleaning products. Pressures have eased since the lockdown, but his firm is still affected.