NEW YORK (AP) — Coca-Cola reported first-quarter results on Tuesday that came in above expectations and said it struck deals to start refranchising its business in the U.S.
The world's biggest beverage maker, which makes Sprite, Dasani and Powerade, had purchased the bulk of its North American bottlers in 2010 with the goal of streamlining production under one roof. CEO Muhtar Kent has suggested that the company would eventually refranchise the territories to independent bottlers.
A franchising model lowers overhead costs for Coca-Cola because it means regional bottlers take on the responsibilities for delivering its drinks to supermarkets, gas stations and other retailers. But the details on how exactly Coca-Cola plans to structure its franchise business in the U.S. over the long term are still not clear.
Under the deal announced Thursday, for instance, Coca-Cola would still own the production plants in the affected territories. The bottlers, which are independent companies, would buy trucks and other equipment and deliver to expanded areas.