The Coca-Cola Company (NYSE: KO) and The Procter & Gamble Company (NYSE: PG) today announced a stand-alone enterprise focused on developing and marketing innovative juices, juice-based beverages and snacks on a global basis.

The new company combines best-in-class capabilities — Coca-Cola’s worldwide distribution, merchandising and customer marketing prowess and P&G’s renowned research and development capabilities — and a range of great brands, including Minute Maid®, Sunny Delight® and Pringles®.

The Coca-Cola Company and P&G will each own 50 percent of the new company, which will be named later. From the start, the new company will have annual sales of more than $4 billion. Don Short, a 24-year Coca-Cola veteran, has been named CEO of the new company. A management team will be named soon.

The combination is expected to be non-dilutive to both companies in the first year of operation and accretive in the second year and beyond. Additional sales revenue and cost synergies are expected to offset transition costs.

In a joint statement, Doug Daft, chairman and CEO of The Coca-Cola Company, and A.G. Lafley, president and chief executive of P&G, said: “This new company will focus all of its resources on becoming the global leader in innovative snacks and nutritional beverages. It multiplies our respective strengths, creating something better than either of our companies could do alone — it’s the perfect combination.”


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The new business unit will be a limited liability company (LLC). It will have its own board of directors, composed of two executives from The Coca-Cola Company and two from P&G.

The new company will have its own focused management and resources, a premier research and development capability in juice and wellness beverages, unmatched global consumer knowledge, and routes to market through the world’s finest distribution system.

The Coca-Cola Company brings the following brands into this new enterprise: Minute Maid, Hi-C®, Five-Alive®, Fruitopia®, Cappy®, Kapo®, Sonfil® and Qoo®. P&G brings Pringles, Sunny Delight® and Punica® beverages.

The new company will have 15 manufacturing facilities and about 6,000 employees. It will manufacture, distribute and market brands in the $50 billion global snacks category and the $34 billion global juice and juice-drinks category.

The LLC has been approved by the boards of directors of both companies and is expected to begin operations following regulatory approvals. Until then, the two companies will continue to operate independently.


The companies expect sales of the LLC to grow from just over $4 billion to $5 billion within two years.

The new company is expected to generate synergies — both revenue enhancements and cost savings — that will grow to about $200 million pre-tax earnings annually by 2005. These include:

  • Pringles revenue growth, which is expected to double through expanded distribution ($120 million).
  • Revenue synergies on the combined juice and juice beverage businesses, primarily through improved distribution and merchandising on Sunny Delight ($30 million).
  • Cost synergies through reduced manufacturing, distribution and administrative expenses and combined purchasing operations ($50 million).

In total, these synergies are expected to create $1.5-2 billion in increased value for P&G and The Coca-Cola Company shareholders.

Following the formation of the LLC, the results of the companies’ former operations will no longer be consolidated in their financial statements. The income from the LLC will be reflected in both companies’ earnings, using the equity method.


Mr. Doug Daft: “The Minute Maid Company has been a significant contributor to The Coca-Cola Company’s total non-alcoholic beverage product offerings. Our investment with P&G will enable this company to focus its energies on creating even more health and wellness product offerings faster and more efficiently than either company could do on its own. At the same time, we will benefit from the combined scale of this new company.”

Mr. A.G. Lafley: “This focused, stand-alone company is the best way to unlock the growth potential of our global snacks and juice brands. The starting point is dramatically increased distribution. Coca-Cola has access to 16 million outlets globally. In the U.S. alone, that represents a 10-fold increase for Pringles — from 150,000 points of distribution to 1.5 million. In addition, the stand-alone company will now have the opportunity to commercialize our beverage and snacks innovations faster and more fully across a broader range of brands and markets. This will be a tax-effective deal, which will enable P&G to benefit from the long-term growth of the new enterprise.

“This independent venture is an excellent example of the strategic choices we’re making at P&G to maximize the shareholder value of our brands. Exploring strategic options for P&G’s businesses is an ongoing process.”

Mr. Don Short: “This is an innovative beverage and snacks enterprise. We will combine global brands, tremendous talent from both companies, a dynamic mindset that will infuse our products, an entrepreneurial corporate culture, and best-in-class innovation, marketing and distribution capabilities to meet consumer needs. The new company enables us to achieve focus, match resources to opportunity and achieve instant scale with a unique ability to commercialize and deliver products.”


The Coca-Cola Company is the owner of Coca-Cola, the world’s best-known brand, and the Company markets more than 230 other products in 200 countries. Through the world’s largest distribution system, consumers worldwide enjoy more than one billion servings of the Company’s products each day.

P&G sells 300 brands to nearly five billion consumers in 140 countries. The Company holds more patents on food and beverage technology than the three largest U.S. food companies combined. In addition to Pringles and Sunny Delight, P&G’s food and beverage brands include Folgers®, Millstone®, Crisco® and Jif®.

This news release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the risks and uncertainties noted in this news release, there are certain factors that could cause results to differ materially from those anticipated by some of the statement made. These include the finalization of definitive agreements, the outcome of regulatory reviews, the successful transition of the businesses to the new entity, entering into arrangements with independent bottlers to expand the distribution of the products, achieving volume and growth projections despite the competitive environment, implementing cost improvement plans in manufacturing and overhead areas, meeting commodity and currency forecasts as well as factors listed in The Coca-Cola Company’s and The Procter & Gamble Company’s most recently filed Forms 10-K and 8-Ks.

An investor conference call to discuss this announcement is scheduled for Wednesday, February 21 at 8:30 a.m. (EST). All participants should reference The Coca-Cola Company or Procter & Gamble when calling. Please call 10 minutes ahead of the scheduled time to ensure you are able to participate in the entire call. This call can be heard live at by clicking on the “Investor Relations” link and at . The call will be archived on both sites.

P&G will host a follow-up conference call at 10:15 a.m. (EST). Interested listeners can participate at .

The phone numbers to access the 8:30 a.m. call are 1-877-915-5204 in the US, and International at 1-712-257-3084.

Instant Replay for the 8:30 a.m. call is available until February 23 at 6:00 p.m. (EST) at 1-888-293-8913 in the US, and International at 1-402-998-0524.

The numbers to access the 10:15 a.m. call are 1-888-946-7797 in the US, and International at 1-712-271-0138. Replay for US is 1-888-293-8955, and International at 1-402-998-0529.

    A B-roll feed will be available via satellite at the following times:

7:00 a.m. – 7:30 a.m. (EST) Satellite co-ordinates: SBS6,
Transponder 9
10:00 a.m. – 10:30 a.m. (EST) Satellite co-ordinates: SBS6,
Transponder 15
1:00 p.m. – 1:30 p.m. (EST) Satellite co-ordinates: SBS6,
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The new company will have access to a broad range of distribution options and will choose the best route to market for each product and customer.

Procter & Gamble (PG)

  • P&G primarily uses a headquarters selling and warehouse distribution system. This system is ideally suited for servicing high volume outlets (Grocery and Mass Merchandisers) in planned purchase categories.
  • This system directly and indirectly reaches about 150,000 outlets in the U.S.
  • With a warehouse distribution system, the retailer is responsible for in-store presentation of the brands, including shelving, display and merchandising.
  • The disadvantage of this system is that it does not reach many smaller outlets effectively and there are many missed opportunities for impulse purchases — something particularly critical to beverages and snacks.

The Coca-Cola Company (KO)
Uses three distinct distribution systems:

  • Direct Store Delivery. Through a network of independently operated bottlers, The Coca Cola Company brands are delivered direct to the store. The bottler does in-store merchandising. This results in multiple off shelf displays and highly effective in-store presentation. This system reaches 16 million outlets worldwide (1.5 million in the U.S.).
  • Warehouse Distribution. Similar to the P&G system, The Minute Maid Company services retail outlets with a refrigerated and ambient distribution system to retailers warehouses. The product is sold and merchandised in-store by a broker (Acosta). In the U.S., this broker has 8000 sales people.
  • Fountain. The Coca Cola Company sells beverage concentrates to distributors and food service outlets. The concentrate is then converted to finished product via a fountain dispensing system for the consumer.


  • The new company will have access to all the systems of the two parents and will be free to choose the best route to market for each product and customer.
  • We expect that Minute Maid will continue to use the systems of The Coca Cola Company as it has in the past. In some markets, Minute Maid will take advantage of refrigerated distribution capability already built for Sunny Delight.
  • Pringles will use a variety of distribution systems, including the existing warehouse distribution system. However, we expect to dramatically increase the availability of Pringles worldwide through use of Coke’s extensive distribution system and its merchandising capabilities.
  • Sunny Delight will take advantage of the refrigerated distribution scale of The Minute Maid Company and gain access to new outlets through Coke’s fountain and direct store distribution system. We expect to significantly improve the in-store presentation of Sunny Delight and reach new outlets.


P&G is a global leader in research and development, including in food and beverage.

P&G will continue to apply its company-wide scientific understanding and expertise to Pringles and Sunny Delight as well as new snacks and juice beverages.

P&G has a strong pipeline of promising food and beverage technologies that are ready to be commercialized.


  • P&G invests 4.7% of its sales in R&D — last year this was $1.9 billion.
  • P&G possesses 27,000 patents, and applies for 3,000 new ones each year.
  • P&G employs 8,600 scientists with degrees from 600 universities. 1,200 of these are PhDs, which is more than on the faculties of Harvard, MIT, and Stanford combined. 19 different Technical Centers around the world, linked to facilitate the cross fertilization of ideas. Food And Beverage Technologies
  • P&G owns about 1,300 patents related to snacks and beverages — and a total of more than 3,000 for foods and beverages — more than the three largest U.S. food companies combined. P&G applies for an average of 300 new patents in Food and Beverage each year.
  • Pringles is made under a wide variety of process and formulation patents that protect the unique design, formulation and proprietary way Pringles are produced.
  • CCM, P&G’s proprietary calcium technology offers superior bio-availability and great taste in juice beverages. This technology is currently used in Sunny Delight and is also licensed to several other manufacturers.
  • GrowthPlus, a proprietary iron, Vitamin A and iodine fortification technology that promises taller, stronger and smarter kids, is in test in NutriStar.
  • P&G holds a wide range of packaging patents that deliver meaningful functional benefits such as fresher products, longer shelf life, lighter weight bottles and easy to open.
  • Unique preservative systems that allow extended shelf life of juices while reducing the amount of preservatives needed.


  • NutriStar — based on P&G’s proprietary GrowthPlus technology, this powdered juice drink promises taller, stronger and smarter kids.
  • Eclipse — a vitamin-fortified chilled fruit beverage for teens and young adults.
  • Spire — a juice based energy drink based on P&G’s proprietary way of delivering sustained alertness.
  • Jeckles — an innovative snack with a distinctive design and flavor system.

About The Coca-Cola Company’s brands …

Minute Maid

The modern orange juice business was born in 1946 when the first shipments of Minute Maid frozen concentrated juice were sold in the United States. Today, the Minute Maid family of juices are sold worldwide with total sales over $2.2 billion. More than just orange juice, Minute Maid juices come in a variety of flavors and packages, with the most recent additions being the Minute Maid Coolers in their uniquely shaped pouch and the addition of a vitamin C and Zinc fortified orange juice.


Hi-C fruit drinks, the world’s first vitamin-fortified fruit drinks, were conceived as a result of a weather-related shortage of orange juice in 1948. In 50 years, Hi-C has become the world’s largest brand of vitamin-fortified fruit drinks, and the fifth largest-selling trademark of The Coca-Cola Company. The successful launch of the new Hi-C® Blast(TM) was recognized by Phillips Publishing TAG awards as the best “Overall Marketing to teens 9 to 13.”


Fruitopia fruit beverages were introduced in the mid 1990s targeted toward the young — and young at heart. With wild and original flavors to satisfy anyone, this brand meets that thirst-quenching on-the-go need.


Kapo fruit flavored beverages fortified with vitamins were originally developed in 1975 under a Chilean government request to develop a low-cost way to provide children with a nutritious drink. Today the Kapo brand uses a group of animated fruit friends to maintain a strong emotional bond with children in Chile.


Cappy fruit juices and nectars have been providing consumers with delicious refreshment and nutrition in Central and Eastern Europe since the early 1960s.

Other key brands: Other key Minute Maid Company brands in the new company include Andifrut, Bacardi Real Fruit Mixers, Five-Alive, Bright & Early, and Qoo.

About the P&G brands …


Pringles was introduced to the United States in 1968. Produced solely in Jackson, Tennessee until the Mechelen, Belgium plant opened in 1998, Pringles really took off in the 1990’s, growing over five-fold. It is currently distributed worldwide and has annual sales of about $1.5 billion — all in its widely recognized stacked chip canister. Many of the flavors — like Paprika — are customized to meet regional flavor desires. Recent introductions to the Pringles line-up include the expansion of a variety of sizes ranging from a 25g lunch-box size to a twin pack, suitable for club or mass merchandisers. Eagles brand snacks are also included in the new company.

Juice Drinks

The Sunny Delight brand was introduced in the U.S. in 1964 and acquired by P&G in 1989. During the 1990’s P&G increased Sunny Delight sales three-fold by improving its taste, strengthening its nutrition fortification, and marketing it as “the good stuff kids go for.” Sunny Delight is produced in four plants in the U.S., and three in Europe.


Punica is the leading nectar-based beverage in Germany. It is sold in a variety of package forms and flavors.