2018 … Settling in and overcoming obstacles

As we reflect on 2018, the first full year post transition, “settling in” as a “united” organization and overcoming several significant obstacles best sum up the year. By the end of the year, our 7,000 new associates and more than 40 new sales and production facilities were settled into being part of the Coca-Cola UNITED family.

There were many challenges in 2018 — such as historic increases in the cost of commodities; the devastating effects of Hurricane Michael on several of our communities; and challenging labor negotiations, to name a few — the UNITED team came together to support one another and to serve our customers and communities at a higher level than ever before. We led the U.S. Coca-Cola System in a number of important performance metrics; we were recognized for our safety performance, customer service and market execution; and we achieved several significant customer conversions across our footprint. But beyond these accomplishments, what stands out the most is the steadfast commitment of our associates to one another, to our customers, and to serving our communities.

When we began the refranchising process in 2014, we knew our biggest challenge in becoming a larger company would be maintaining the hands-on, locally-focused, relationship culture of Coca-Cola UNITED, which has been our legacy for 117 years. Thanks to our amazing team, our foundation is stronger than ever.

Since completing the franchise transitions, we have turned our attention and efforts to key strategic initiatives that will optimize our growth and strengthen our market capability and effectiveness for the future. Some of these efforts include:

• Operational improvements and rationalizing franchises to improve distribution and commercial capability
• Adopting and executing common and unified information systems and administrative functions
• Investing in substantial infrastructure for distribution and supply chain efficiency

All of these initiatives and investments aim to capitalize on the synergy and scale of our significantly expanded territories.

Our Journey to Elite

During 2018, there were many highlights on our “journey to ELITE.” Our Marietta, Georgia, production facility won the top Safety Award in the U.S. Coca-Cola System.

Coca-Cola UNITED was recognized as the “Highest Execution” bottler based on critical metrics in the 2018 Coca-Cola Company’s Market Street Challenge.

Circle K, one of our largest customers, named UNITED its #1 Supplier.

The Birmingham Business Journal selected John Sherman as “Top CEO” in its annual recognition of top executives, based on his leadership and community outreach and the Company’s extraordinary growth.

Our On Premise business was an exceptional highlight of 2018, achieving our best year yet in terms of volume, revenue and margin. We led the U.S. Coca-Cola bottling community in important metrics including revenue growth, market execution and share. We also realized several significant customer conversions, such as The University of Alabama in Tuscaloosa, where for the first time in two decades, Coca-Cola has both the campus and athletics business.

Our East Region team had a big win converting The Infinite Energy Center in Atlanta, a 118-acre campus for entertainment, conventions and business events.

Our West Region’s partnership with the national food and beverage delivery service, WAITR, should enhance our emerging e-commerce business, bringing a new channel of customers.

UNITED leads the country in cashless transactions for Coca-Cola, enabling consumers to use a variety of payment options. This has helped UNITED become the first bottler to hit $2 million in cashless transactions in one month. This represents 22% of the cashless transactions for the Coca-Cola System, whereas overall UNITED represents one-tenth of the Coca-Cola System’s On Premise volume.

Strategic Capital Investments for Growth

UNITED continues to invest in its future. The construction of our future $86 million South Metro Atlanta sales and distribution facility is fully underway. The facility is scheduled to begin operations in late 2019.

A $28 million investment in our Montgomery production facility and warehouse, which added close to 50 new jobs, enables us to produce and store higher volumes of Dasani water needed for both our customers, as well as for communities inside and outside UNITED’s territory, following natural disasters.

UNITED Strong

On Sunday, October 7, our local teams along the coasts of Alabama and Florida, as well as in Georgia, began to prepare for Hurricane Michael. For several days, reports called for a Category 1, 2 or 3 when the storm would hit landfall. On October 10, Hurricane Michael slammed the coast as a Category 4 hurricane, with winds reaching 145 miles per hour at Panama City and Mexico Beach, Florida.

More than 3,000 of our associates in eight locations in Alabama, Florida and Georgia were in the path of the storm. What a blessing that no UNITED associate or family member was injured during the storm. However, the personal loss, devastation to the community, and trauma cannot be overstated.

For UNITED, the greatest impact was on our Panama City and Bainbridge facilities. Our local teams, as well as our Facilities group, were on the ground just hours after the storm, first and foremost to check on our associates and their families, and then to assess the damage to our facilities. Our Human Resources team mobilized immediately with outreach and supplies.

The Coca-Cola family generously provided donations to our Employee Relief Fund, along with gifts and needed items to make the holiday season a little more festive. In mid December, a Christmas celebration with Santa and the Coca-Cola Polar Bear provided a brief, but meaningful, respite for associates and their families and a time to celebrate our blessings and being part of the Coca-Cola UNITED family.

What was a devastating experience for our team and our local communities, was, once again, a time when the UNITED family was at its best – serving one another and serving our customers and communities.