- 3 - two-tiered in the sense that there were independent concentrate makers and independent bottling facilities, each usually owned separately yet dependent upon one another. Economic Landscape The bottling industry began to realign fundamentally around 1986 as Coke and Pepsi vertically integrated their bottling businesses by buying their bottling facilities. Coke and Pepsi could then produce, bottle, and distribute their own beverages without independent bottlers. This marked an important departure from the bottling business of the past when bottling facilities could contract with Coke or Pepsi to exclusively bottle and distribute their drinks in a given geographic region. Independent bottling companies lost that resource after Coke and Pepsi vertically integrated and pressured the independent bottling companies to sell their franchise rights to Coke or Pepsi. In addition, 1986 was the heyday of the leveraged buyout (LBO) era, in which investors were scouring the country for high cashflow industries. The bottling industry with its fairly high cashflow business was an attractive industry for an LBO. Bottlers One LBO opportunity in the bottling industry arose when Philip Morris, Inc. chose to exit the soft drink bottling business. The managers of this bottling business (the managementPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011