Coca-Cola’s doing it again.
After closing its Northampton, Massachusetts plant in 2021, Coca-Cola is shuttering yet another manufacturing plant.
This time, the target is in American Canyon, California – more specifically, at 1201 Commerce Boulevard.
The plant will close on June 30th and will result in 135 layoffs.
More to know:
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There’s been a bit of a “will they or won’t they” dynamic with this specific plant – the closure was originally announced in 2021 with a planned closure date in 2023…
And then things just kind of…kept going.
I didn’t see any announcements about a change in policy; it felt like maybe they’d changed plans but weren’t sure enough to announce them.
Well, turns out it was just a temporary reprieve – after the plant closes on June 30th, a few people will stay on to finish the transition, and then the warehouse will close on December 31st.
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Coca-Cola has been working for years to shift more of its logistics chain on to third-party suppliers.
In this specific case, it’s bottling – in addition to closures, they’ve shifted 350 distribution centers and 50+ production facilities to independent bottlers, who will of course be paid a fee.
And it’s not just bottling, either.
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Coca-Cola is also shifting delivery to third-party distribution networks, gradually reducing the number of company-owned trucks and warehouses so it can outsource to others.
Additionally, Coca-Cola is doing more automation to reduce logistics – and, let’s face it, probably personnel – costs.
This is all done for the same reason:
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By outsourcing more and more of its operations, Coca-Cola can run a much leaner organization that focuses on R&D (flavor development), PR, marketing, high-level distribution, and pricing.
It can specialize in fewer things while shifting lots of variable costs on to third-party suppliers. This will boost margins and, perhaps even more importantly, predictability.
Plus, there’s the other reason…
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By working through local supply chains, Coca-Cola is hoping to reduce its exposure to potential tariff or trade war issues.
Fewer production inputs crossing national lines hopefully means fewer tariffs.
Of course, the specifics of every country and every tariff will very much depend on what happens in the future – but this is a smart investment in hedging and exposure reduction.
Unfortunately, it comes at the cost of some jobs – like those poor folks at the American Canyon production facility.
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Obviously I’ve been talking a lot of insider baseball about how this all benefits Coca-Cola.
Fortunately, it’s not just the corporation that benefits – with Coca-Cola more focused on things like flavor development, we should be seeing both more new flavors and better new flavors, too.
Case in point:
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If you haven’t had an orange cream Coca-Cola…I highly recommend.
Think of it a bit like a creamsicle…as a soda!
It’s got a little bit of that “zing” you like from orange soda, mixed with that creamy taste and mouthfeel from the vanilla.
And of course, that distinctive Coca-Cola taste underlies all of it.
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Coca-Cola isn’t just a soda company…it’s a global conglomerate with dozens and dozens of brands.
In addition to Coke, Sprite, and Fanta…
They also own Dasani, Gold Peak tea, Vitamin water, Minute Maid, Powerade, even Topo Chico!
And innovation is happening seemingly every day:
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Here are a few to whet your appetite:
– Sprite + tea (just released)
– Strawberry Kiwi Sprite Chill
– Monster Energy Viking Berry and Ultra Blue Hawaiian
– Canada Dry Fruit Splash Cherry Ginger Ale
– Topo Chico Passionfruit
And of course, that’s just a sampling.
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Coca-Cola is a company in transition, and that comes with both benefits and drawbacks.
As for me, I’m excited to see what new flavors they’ll come up with! What are you excited for?
Let us know in the comments!
And of course…
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For more info on this and other big food and beverage stories, Follow The Coconut Mama
• For fun lists, healthy living tips, and bar conversation topics, make sure to follow The Coconut Mama. Click here to access The Coconut Mama’s profile page and be sure to hit the Follow button here or at the top of this article!
• Have feedback? Add a comment below!
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