Coca-Cola, Pepsi, and other cold drink businesses are multi-billion dollar industries. But just like any other business, they must constantly entice and retain customers to keep up with the competition. This is done through targeted communication, loyalty programs, promotions, and partnerships, to name a few.
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A franchise is a type of supply chain management that involves granting the right to manufacture and distribute a specific product using the franchisor's trademark, trade name, and logo. The franchise company typically makes and sells the branded drink concentrate to bottlers, who then use their own facilities to produce finished beverages sold through retail outlets or vending machines within a specified territory.
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The Coca-Cola brand began to be franchised in 1889 when the company began selling bottling rights to independent businesses that could afford the large investments needed for a large soda plant. The original franchise agreements required that bottlers agree to produce and sell Coke products only in the standard, unique 'contour' bottle, which was first patented in 1915 and later immortalized by artists such as Andy Warhol.
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The Coca-Cola system is based on a partnership between the franchise company and bottlers, which are typically independent companies that pay a fee to become a part of the system. This partnership model has been very successful for The Coca-Cola Company, which controls more than 46% of the United States' carbonated soft drink market. The company's success is primarily due to its extensive marketing and product branding.
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