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VCGuy
Believe me, itโs not...ย โขย 2m
I was always curious why Coca-Cola doesnโt own its bottling infrastructure. They run a franchise bottling model- โคท It sells concentrate syrup to bottling partners, who handle manufacturing, packaging, logistics, and distribution. The parent company focuses on brand + marketing โ bottlers invest in capex-heavy infrastructure. โคท Coca-Colaโs avg Return on Capital: ~30% โคท Bottlers operate at ~10โ12% (rare established bottle operators could be making higher teens) (managing a global brand and managing bottling are fundamentally different businesses) What initially started as a workaround became a core advantage - a). Bottlers bring deep regional knowledge โ pack sizes, pricing, and delivery models vary by market b). Local execution allows innovation without compromising brand consistency c). The global network stays aligned through long-term franchise agreements d). Coke avoids asset-heavy operations while retaining control over marketing + product standards Outsourcing the low-return part of the business while owning the high-return brand machine. โญ๏ธFounded in 1886, Coca-Cola serves 2.2 billion drinks/day โจ present in every country except North Korea and Cuba.
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