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Coca-Cola Restructures North American Beverage Business

Coca-Cola said on Friday that it is reorganizing its North American business to better reflect its strategic focus and creating three new business units for its sodas and other beverages as part of the change.

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."

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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 and makers of healthier beverages such as juices.

"The move is positive but not entirely surprising as Sandy Douglas' prior position was Chief Customer Officer before being named to his current post as head of North America," said Morgan Stanley beverage industry analyst William Pecoriello in a research note. "Winning with the customer is one of Coke's key strategic priorities."

The move was first reported by industry publication Beverage Digest.

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.

Deryck Van Rensburg, previously head of Coke Germany, will lead the Emerging Brands business unit, which has been created to 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.

The company did not announce a name for its sparkling beverages unit, which includes its more well-known sodas and energy drinks.

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