Coke reorganises N America beverages into 3 units

NEW YORK, Mar 10 (Reuters) Coca-Cola Co. has said that it is reorganizing its North American business to better reflect its strategic focus, creating three new business units for its sodas and other beverages.

In a note to employees, Coke North America President Sandy Douglas said the new operating model has been designed ''to transform our business and win in the marketplace.'' The three business units -- sparkling beverages, still beverages and emerging brands -- have been created to define Coke's focus in the North American market, where it faces stiff competition from rival PepsiCo Inc. and makers of healthier beverages such as juices.

Coke shares were up nearly 1 percent in afternoon trade.

In February, Coke Chief Executive E. Neville Isdell told analysts at the Consumer Analysts Group of New York meeting that Coke faced ''strong headwinds'' in North America.

Each business unit will be led by a president and general manager and will be responsible for developing its own category and brand strategies, Douglas said.

The move was first reported by industry publication Beverage Digest.

An analyst said these changes are part of a more aggressive North American strategy.

''Coke senior management has made fixing its North America business a key priority,'' said William Pecoriello of Morgan Stanley Research, in a note to clients. He expects the company to pump some of its profits from emerging markets and Japan into strengthening its North American business.

In February, Isdell said despite slower growth in the North American market, Coke expects long-term growth of 3 to 4 percent in volume and 6 to 8 percent in revenue.

Coke hopes to achieve these targets by pursuing growth opportunities in emerging markets and focus on innovating and expanding its core brands, he said.

The new emerging brands business unit will be responsible for such innovation in North America.

Deryck Van Rensburg, previously head of Coke Germany, will lead this unit, which will incubate small and emerging brands outside of the company's traditional business model. Coke's recent acquisition of Fuze, a line of nutrient-enhanced fruit and tea beverages, falls into this category.

In the longer term, Coke's emerging brands unit could emerge as a center of innovation for the company's portfolio of noncarbonated beverages, Pecoriello said.

It could ''better respond to emerging consumer needs, better compete with emerging beverage companies, and improve the speed/quality of competitive responses,'' he said.

The still beverages unit will be headed by Brian Kelley, previously the chief executive of SIRVA, a relocation company.

The company said it will announce who will run its sparkling beverages unit, which includes its more well-known sodas and energy drinks, soon.

In Coke's previous organizational structure, there was no single head of beverages for branding, planning and strategizing, a company spokeswoman said.

Coke shares were up 50 cents, or around 1 percent, to .65 in afternoon trade on the New York Stock Exchange.

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