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Ozarks Coca-Cola/Dr Pepper Bottling Co. signs a letter of intent to pick up northwest Arkansas and a small area on the Kansas-Oklahoma state line.Graphic provided by OZARKS COCA-COLA
Ozarks Coca-Cola/Dr Pepper Bottling Co. signs a letter of intent to pick up northwest Arkansas and a small area on the Kansas-Oklahoma state line.

Graphic provided by OZARKS COCA-COLA

Ozarks Coca-Cola secures NW Arkansas territory

Posted online
Following an October deal that grew its business by 60 percent, Ozarks Coca-Cola/Dr Pepper Bottling Co. announced yesterday it signed a letter of intent for new territories with Atlanta-based The Coca-Cola Co. (NYSE: KO).

The agreement would give the Springfield bottling company new franchise rights in northwest Arkansas and small portions of Kansas and Oklahoma. Sally Hargis, Ozarks Coca-Cola chairwoman and vice president of corporate strategy, said the deal is expected to finalize in 2017. Terms were not disclosed.

The northwest Arkansas territory covers Benton, Carroll, Madison and Washington counties, including the cities of Fayetteville, Rogers and Bentonville, where Wal-Mart Stores Inc. (NYSE: WMT) operates its headquarters. In the deal, Hargis said Ozarks Coca-Cola would serve the Wal-Mart headquarters and all of its its stores in the four-county area, where Tyson Foods and J. B. Hunt Transport Services Inc. also operate. Wal-Mart currently makes up 40 percent of Ozarks Coca-Cola’s business.

“The area in general is one of the fastest-growing metropolitan areas in the country,” Hargis said, noting the northwest Arkansas metropolitan statistical area has a population of roughly 500,000. “It is a big bite for us to take. More debt, more risk, but our family is committed. We’re confident that we can make it work.”

In the deal, Ozarks-Coca Cola would serve much of northern Arkansas, stretching from Jonesboro in the east to the Oklahoma line. The Kansas and Oklahoma portion of the deal near Columbus, Kan., are contiguous to Ozarks Coca-Cola’s current territory. Last year’s purchase of territories in northern Arkansas, southeast Kansas and adjoining parts of Missouri grew the company’s business to roughly 10 million cases a year from 6 million cases, Ozarks Coca-Cola CEO Edwin “Cookie” Rice Jr. said earlier this month. The new territory would grow that figure to roughly 14 million cases.

The new deal also includes a sales center near Springdale and an unknown number of new employees, Hargis said.

The territories are owned by Coca-Cola Co. subsidiary Coca-Cola Refreshments USA Inc. The deal is part of a corporate refranchising effort known as the 21st Century Beverage Partnership Model.

In addition to its deal with Ozarks Coca-Cola, The Coca-Cola Co. yesterday announced a joint venture created by Monterrey, Mexico-based Arca Continental and Birmingham, Ala.-based Coca-Cola Bottling Co. United Inc. signed a letter of intent to purchase franchise rights in Texas and parts of Oklahoma.

Coca-Cola’s KO shares were trading at $44.55 as of 9:42 a.m., compared to a 52-week range of $36.56 to $47.13. 

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