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Bottling companies distribute drinks in a defined area, either by creating their own drinks or through franchise agreements. Large soft drink manufacturers produce drinks in specific plants and ship them to be bottled elsewhere. Franchise agreements protect quality and secrecy, and bottling companies can bottle soft drinks, water, and alcoholic beverages. Independent bottling companies can create and sell their own products, and bottling companies tend to serve a certain geographic area.
A bottling company places the drinks in bottles and distributes them in a defined area. Some companies create their own drinks, bottle them and distribute them around the world. Others have a franchise agreement with one or more specific manufacturers to bottle the products and distribute them within a defined geographic area.
Large soft drink manufacturers produce the drinks in one or more specific plants and then ship the produced drink to another location to be bottled. This allows the soft drink manufacturer to maintain tight quality controls and secrecy on its formulas. It also reduces the cost for transporting the product to market. The product can be transported cheaper in bulk than individual bottles.
To protect the quality and secrecy of specific formulas, a bottling company must enter into a franchise agreement or some other form of agreement that designates the controls and safety associated with the beverage once it reaches the bottling company facility. These agreements may place restrictions on the bottler such that the bottler cannot bottle a competing product within the same facility. These exclusive or semi-exclusive deals are considered more profitable for the franchisee than the franchisor.
Generally, the franchisee sells his product to the franchisee to have it bottled. The bottling company then distributes and sells the product within its designated territory. Bottling companies can bottle soft drinks, water and alcoholic beverages. Some vineyards that sell large quantities of product in a given area use bottling companies to reduce transportation costs.
An independent bottling company can create its own products which the same company bottles and sells in a geographical area. Most of these companies sell their products within a local area, although some companies may ship their bottled products nationally or globally. Usually, these companies start selling to larger markets using their own bottling plant, but if the sales of the products go beyond a certain level, these companies start to franchise the bottling of their products to third parties.
Bottling companies tend to serve a certain geographic area. If this area includes a metropolitan market, the area can be subdivided so that multiple bottling companies serve the same area. The franchisor and its affiliates work together to determine the best method to use to get the product into the hands of all potential buyers.
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