Coca-Cola having issues with Wal-Mart requests


In another purported Wal-Mart heavy-handed tactic, it appears to have asked the Coca-Cola company to alter its century-old beverage distribution model and deliver its products direct to Wal-Mart's warehouses. This would allow Wal-Mart increased scale and efficiency since it could replenish Coke products within its own supply chain instead of having Coke bottling partners visit stores daily to re-stock Wal-Mart stores nationwide.

The suspected threat? That Wal-Mart would launch a competing sports drink product to sit alongside Coke's Powerade product in all Wal-Mart stores -- and that would dent Coke's profit a tad. While this is a rumor at this point, it seems plausible -- Wal-Mart has so many private-label products (Sam's Choice products, for example) already. Many of those third-party manufacturers would jump at the chance to make a sports drink product for Wal-Mart stores.
So, is Wal-Mart using arm-twisting to get what it wants? Absolutely, and it's a right that it has. With Pepsi product Gatorade controlling 82 percent of the sports drink market in the U.S., Coca-Cola can't let Powerade slip anymore without harmful side effects. This will be interesting to watch, as this change for Coca-Cola surely will mean its nationwide agreement and processes with bottling/delivery partners will now be altered quite a bit. Ah, the power of cheese Wal-Mart.

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