industry news

PepsiCo sets up base in Atlanta, the home of Coca-Cola
Andrew Ward of FT.com

Atlanta, GA - 3/14/2005 - Emblazoned on top of the company's high-rise headquarters, Coca-Cola's famous red logo figures prominently in the Atlanta skyline. Georgians are fiercely loyal to the brand.

Now PepsiCo plans to open a big distribution centre in the city. An audacious assault on enemy territory? PepsiCo insists the choice of location has nothing to do with the century-old rivalry. Atlanta, it says, is the ideal base from which to reach consumers across the entire US south-east.

Its flagship cola brand, Gatorade sports drink and Tropicana juices will all be distributed from the proposed warehouse in Douglas County, on the western edge of the city.

"We do not make this kind of decision to spite our competitor," says a PepsiCo employee. "We go wherever the consumers are."

Nevertheless, PepsiCo's arrival will boost Atlanta's efforts to establish itself as a logistics centre. Pirelli, the tyre maker, and Del Monte, the fruit producer, are among companies to have located distribution centres near the city recently.

PepsiCo, which already has a small bottling plant in Atlanta, is expected to invest about $30m (€22m, £16m) in the 900,000 sq ft facility and create at least 100 jobs. The investment comes at a time when PepsiCo is in the ascendancy over struggling Coke, with its broader range of products outperforming its more cola-focused rival.

Neville Isdell, Coke's chairman and chief executive, has vowed to restore the "iconic status" to the company's brand by spending an extra $400m in marketing each year.

The company is also increasing investment in its non-Cola brands such as Powerade and a new energy drink called Full Throttle.

"The south-east is the fastest-growing region of the US and Atlanta has been the fastest-growing metro area over the past decade," says Bob Pertierra, vice-president of logistics industry development for the Atlanta chamber of commerce. "About 80 per cent of American consumers are within a two-day truck drive of the city."

Cities such as Atlanta and Memphis, situated in easy reach of multiple population centres, are competing for the growing investment in logistics as companies seek to make their supply chains more efficient.

"Logistics is one of the industries creating the most new jobs and investment in places like Atlanta," said Mr Pertierra.