2018 Bottler of the Year: Great Lakes Coca-Cola Bottling
Midwest Bottler Elevates Its Business Through Diversification, Community Involvement
FOR MORE THAN 20 YEARS, REYES HOLDINGS’ FOUNDERS AND CO-CHAIRMEN Chris and Jude Reyes dreamed of being part of The Coca-Cola Co. family. In February 2014, the brothers realized their long-awaited ambition, partnering with the “most iconic and recognized brand in the world” after they signed their first letter of intent with The Coca-Cola Co.
“Since 2014, we’ve continued to grow our relationship with Coca-Cola and are proud of our efforts to become the best local Coca-Cola bottler and distributor we can be,” explain Chris and Jude Reyes, Founders and Co-Chairmen of Reyes Holdings. “After signing our first letter of intent, Reyes Holdings went on to launch GLCCB, which serves parts of six states in the Midwest, including the cities of Chicago, Detroit, Minneapolis and Milwaukee. In October 2017, we acquired Coca-Cola Refreshments’ West Operating Unit, another great fit for us because we already have extensive operations in California and Nevada.”
GLCCB, a wholly owned subsidiary of Rosemont, Ill.-based Reyes Holdings, is part of one of the largest global providers of food and beverage services, including Martin-Brower, Reinhart Foodservice, and Reyes Beverage Group. Reyes Holdings also ranked in Forbes as the 11th largest privately held company in the United States. Because of GLCCB’s leadership in many areas, the company was chosen as Beverage Industry’s 2018 Bottler of the Year.
Although GLCCB only is three years old, it benefits from being one of the first of nearly 70 independent bottlers across the United States to be part of The Coca-Cola Co.’s new fully refranchised bottling network. Yet, the journey to refranchise — and return Coca- Cola to bottlers and communities from coast to coast — actually began a decade ago when the soft drink company decided to reshape its bottling system in North America.
In December 2017, The Coca-Cola Co. announced that its 21st Century Beverage Partnership Model was completed. During a 10-year period, The Coca-Cola Co., in partnership with its U.S. bottling partners like GLCCB, executed 60 transitions involving 350 distribution centers, more than 50 production facilities, more than 55,000 employees and more than 1.3 billion cases of volume.
During the transition, The Coca-Cola Co.’s deep support and commitment to its bottling partners was evident, Chris Reyes says, noting the powerful opportunity the company is giving GLCCB to grow its business on its own terms via a deep and structured long-term partnership.
“The Coca-Cola Co. wanted to bring the heart of Coca-Cola back to the local bottler and create deep relationships within the communities the company serves — in other words, be more than a global beverage company,” explains Jeff Laschen, GLCCB Chief Executive Officer. “It wanted to be the company on Main Streets and First Avenues up and down the country, from coast to coast. Coke knew that returning ownerships of bottling operations to local partners is where it would perform best. The 21st Century Beverage Partnership Model is truly evolving into a system that serves the quickly changing customer and consumer landscape, with a focus on creating stronger relationships and more agile operations along with its bottling partners.”
In addition to distributing The Coca-Cola Co.’s products, GLCCB carries multiple brands in multiple categories, diversifying its portfolio to include nearly 500 SKUs including Dr Pepper products, waters, teas, ready-to-drink coffees, sports drinks and energy drinks. The company distributes these products in Illinois, Michigan, Indiana, Iowa, Wisconsin and Minnesota.
In total, GLCCB manufactures and delivers more than 150 million cases annually from six bottling facilities in the Great Lakes area of Eagan, Minn.; Milwaukee; Niles and Alsip, Ill.; and Grand Rapids, Mich., and Detroit. It also employs more than 5,000 employees at 36 bottling and warehouse facilities as well as 30 distribution centers.
“Our associates produce a variety of carbonated and still products on 23 production lines at speeds as [fast] as 4,500 cases per hour,” says Mike Ziesemer, Chief Operating Officer for GLCCB. “Similar to The Coca-Cola Co., we work seamlessly with our other brand partners to ensure we provide our customers and consumers with a great experience and beverages they love across all the brands we sell and distribute.”
GLCCB is focused on growing and reinvesting in its bottling business, maintaining operational excellence across its network and sharing best practices learned from the leadership at The Coca-Cola Co. and Reyes Holdings, among others, Mike Ziesemer says.
“Across all of our distribution businesses, including Great Lakes, we focus on reinvesting into the business, route planning, our sales capability approach, operational excellence, giving back to our local communities and making a strong commitment to corporate responsibility,” Jeff Laschen says. “Reyes is also committed to recruiting and retaining the best talent in the industry at each of our facilities, as our employees are a powerful driving force behind the company’s success.”
Acquisitions also are fostering growth, including Reyes Holding’s acquisition of Coca-Cola bottling operations on the West Coast, leading to the founding of Reyes Coca-Cola Bottling.
“The leadership within Great Lakes is committed to helping facilitate the West Coast transition for Reyes Coca-Cola Bottling,” Jeff Laschen says. “We will also use our experiences and learnings from our Midwest operations and Reyes Beverage Group to share best practices with this new market.”
The Heart of the Community
In addition to selling, bottling and distributing a wide range of non-alcohol products, GLCCB is actively involved in the Washington, D.C.-based American Beverage Association (ABA), and Reyes’ market leaders are involved in state beverage associations where they operate.
Jeff Laschen, who joined the company in March 2016 after more than 30 years at The Coca-Cola Co., sits on the ABA Board of Directors where he, the Alliance for a Healthier Generation and the nation’s top beverage companies — including The Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group — are an integral part of the ABA’s Balance Calories Initiative (BCI). Enacted in 2014, BCI is “a push to encourage greater interest in, and access to lower- and no-calorie beverages,” Jeff Laschen says.
“The BCI continues to be a top priority for the ABA,” Jeff Laschen continues. “It is the largest voluntary effort by an industry to fight obesity, aiming to reduce beverage calories consumed per person nationally by 20 percent by 2025. One important step toward achieving our goals is an increased focus on providing clear facts and nutritional information on beverages. We also aim to put a greater emphasis on reducing sugar in beverages and making low- and no-sugar beverage choices like tea, milk, and water more accessible.”
Increasing trial of drinks with less sugar and helping consumers make “balanced” beverage choices through improved package labeling and smaller package sizes are among the ways GLCCB and its partners are supporting ABA’s Balance Calories Initiative.
“The industry firmly believes that partnerships which include government, industry and public health professionals all working together can create greater health outcomes and the beverage industry has been and will continue to play its part. Partnerships are always the better path, and, as we have seen recently in Cook County, discriminatory proposals targeting beverages lack public support,” Laschen continues.
“In GLCCB, we’ve implemented all industry-led initiatives throughout our territories. We’ve been successful in previous voluntary initiatives with our industry partners to remove full-calorie soft drinks from schools and put calorie information up front on packages, empowering people to make informed decisions,” Jeff Laschen explains. “In addition to these efforts, the Coca-Cola system is now expanding its focus to help increase awareness and trial of beverages with less sugar, no sugar or in smaller package sizes. Continuing to increase trial of drinks with less or no sugar is key to our efforts to achieving our goals.
“We recognize that while sugar in moderation is appropriate, over-consumption of sugar is a concern,” Jeff Laschen continues. “Our industry has already achieved a 23 percent reduction in calories consumed from sparkling soft drinks per person per day in the U.S. since 2001. Now, our challenge is to build on these efforts and accelerate sugar reduction across our beverage portfolio.”
To fulfill this goal, GLCCB is working closely with The Coca-Cola Co. to launch new products and bring best-in- class marketing programs to the communities it serves by leveraging the strength of its system, Andrew Reyes, Chief Customer and Commercial Officer says.
“Some of our best examples include fan-favorite campaigns like Share a Coke and March Madness associated with the recent launch of the new Coca- Cola Zero Sugar,” he continues. “Working with our talented local marketing teams to develop and execute promotional efforts has been a critical component of our brands’ success.”
With 70 percent of GLCCB’s sales coming from carbonated soft drinks (CSDs), the category still commands the lion’s share of the business. Yet, the company continues to diversify its packaging mix by offering consumers smaller packages.
“We are also focusing on low- and no-calorie brands, which are enjoying growth in the category, including the launch of Coke Zero Sugar,” Andrew Reyes says. “[Our] sparkling waters, energy drinks, Coke Zero Sugar, Sprite and Gold Peak Tea are experiencing strong growth.”
To support consumer trends toward smaller, on- the-go package sizes, the bottling company recently invested in a specialty can line for its Eagan, Minn.- based plant.
“This can line will allow us to manufacture the high-growth ‘slim/sleek’ and ‘mini’ can variants that are growing in popularity with our consumers,” Mike Ziesemer notes.
To meet demand for its products, GLCCB plants generally run two to three shifts a day, five to six days a week; however, holiday demand often requires some seven-day workweeks throughout the year. “Typically, we load and distribute products to our customers six days a week,” Mike Ziesemer says. “Our delivery fleet has approximately 1,000 trailer tractors and 1,200 service vehicles.”
Being a part of Reyes Holdings, GLCCB also benefits from other operating divisions such as Reyes Fleet Management, which provides the latest technology in fleet management, safety, and compliance. Among the technologies the bottler utilizes is DriveCam, an on-board camera, to help with driver coaching and safe habit development. “We are always looking to improve safety for our employees and the public,” Mike Ziesemer says.
GLCCB also is focused on alternative/clean energy fuels and the extensive use of hybrid vehicles, hydrogen fuel cells and electric trucks. To that end, Reyes Holdings recently announced its intention to purchase 30 of the first tractors to come off Tesla’s new Class 8 assembly line.
“The use of electric-powered vehicles represents an opportunity to contribute to the health of the environment via emissions reduction, while at the same time taking advantage of new technology to attain improvements in operating expenses such as vehicle maintenance, fuel, and driver recruitment and retention,” explains Paul Rizzo, Senior Vice President of Reyes Fleet Management.
GLCCB’s team also is dedicated to being No. 1 in customer service, increasing brand awareness and giving back to the communities it serves.
“Each summer, we team up with the Detroit Pistons to support Metro Detroit Youth Day on Belle Island,” Andrew Reyes explains. “Activities include a skills competition, clinic, alumni meet-and-greet and product sampling. The event attracts between 6,000 and 7,000 participants per year.”
“The company also works closely with The Coca- Cola Co. in its local markets. For example, GLCCB supports the Chicago Park District in its efforts to improve parks throughout the city,” he adds.
Additionally, GLCCB recently embarked on a new partnership with the Ability Building Center (ABC), which will provide meaningful work opportunities for people with disabilities at its LaCrosse, Wis., sales center.
In addition to investing in the communities it serves, Andrew Reyes says that GLCCB will continue to innovate with new products while it identifies new partnership opportunities and expands into new territories.
Shoppers’ needs and preferences and consumer trends also are being studied. “For example, in Convenience Retail outlets, shoppers are ‘on-the- go’ and prefer single-serve cold beverages, which are reflected in our package and brand offerings,” Andrew Reyes explains. “... In metro markets, shoppers are most often walking to stores and are less likely to store beverages in their homes. Therefore, our merchandising priorities favor smaller packages.”
Leveraging partnerships with local sports teams in its brand marketing also is contributing to brand awareness. For example, GLCCB has realized the benefits of Sprite’s basketball platform with local NBA teams, including the Chicago Bulls, Minnesota Timberwolves and Detroit Pistons, while Coke Zero Sugar is being promoted with local NHL team partnerships, including the Chicago Blackhawks, Minnesota Wild and Detroit Red Wings.
Yet, as GLCCB looks to the future, the company recognizes the importance of a continual, sustainable investment in its employees, manufacturing capabilities and providing the needed technology and resources to fully leverage The Coca-Cola Co.’s growing portfolio of beverages.
“We’re proud of the diverse portfolio of brands and products that we support, delivering a wide range of beverages that consumers love,” Andrew Reyes says. “As we quickly grow with new territories, we are committed to ensuring team members are up to speed on all new platforms and processes. Ultimately, we’re working with some of the world’s best and biggest brands.”
Jeff Laschen adds: “We succeed by being very purposeful and strategic in how we organize our teams, combining talent that works well together from Reyes Holdings and The Coca-Cola Co. As always, we remain focused on our business and passionate about growing the Coca-Cola family of brands, as well as our other brand partner portfolios. With our new and expanded relationship with the company, we continue to look for ways to grow and sustain our partnership. We are well on our way to becoming a bottler the Coca-Cola system can be proud of.”
By Barbara Harfmann