The Brand and the Bottle

Coca-Cola began as a pharmacist's experiment. John Pemberton mixed the first batch in Atlanta in 1886 and sold it at a soda fountain as a tonic. Asa Candler turned this tonic into a fortune. He acquired the business around 1891 and built his strategy on a single product: syrup, sold to pharmacies and mixed with carbonated water and served fresh at the counter.

Candler was selling a brand and a formula, not a bottle. The Coca-Cola Company owned the name, the marketing and the concentrate. Everything downstream- the glass, the water, the delivery- was somebody else's problem, and most people don’t know this is still how Coca-Cola runs today; 

In 1899, two Chattanooga lawyers, Benjamin Thomas and Joseph Whitehead, asked Candler for the rights to bottle Coca-Cola across most of the United States. According to several reputable sources, they signed the agreement on 21 July 1899 for one dollar. Legend has it the dollar was never collected.

Candler agreed because he thought bottling would fail. It was capital-heavy, unproven, and a risk to the quality of his brand. Handing it to someone else let Coca-Cola stay light: sell the syrup, keep the margin, own the name, and let local operators sink their money into plants and trucks.

Thomas and Whitehead could not fund a national rollout themselves, so they became middlemen. They carved the country into territories and sold franchises to local bottlers, creating what became known as the "parent bottler" system. Within two decades, the number of plants grew from two to more than 1,000, and by Coca-Cola's own account, roughly 95% were locally owned. 

A bottler buys concentrate from The Coca-Cola Company, adds carbonated water and packages the drink. That is the easy bit. The bottler also owns the plants, the fleets and the warehouses. It runs the route to market, getting product to hundreds of thousands of shops, kiosks and roadside sellers. It places the coolers and umbrellas, manages the merchandising, and carries the working capital, the energy bills and the wage bill. In Nigeria alone, that operation runs to more than a dozen plants and a distribution network reaching hundreds of thousands of retailers.

In Nigeria it carries something heavier still: foreign exchange risk. Concentrate, machinery and packaging inputs are priced in or linked to dollars,  while sales come in naira. When the naira falls, the bottler absorbs the hit. The brand-owner, Coca-Cola, sitting on top with its concentrate margin and its marketing spend, is far more insulated.

So the same red logo sits on two very different businesses. One is light, high-margin and built on intellectual property. The other is heavy, capital-hungry and operationally tasking. 

Coca-Cola has never quite settled on which side of that line it wants to be.

Having given bottling away in 1899, the company spent much of the twentieth century buying it back. From the 1920s it repurchased franchise rights, and in the 1980s it rolled bottlers into a publicly listed vehicle, Coca-Cola Enterprises. In 2010 it went further and bought Coca-Cola Enterprises' North American operations outright, taking direct control of its home market.

Then it reversed again. Over the past decade, Coca-Cola has pursued "refranchising", selling bottling operations back to independent partners so it can return to being an asset-light brand and concentrate business. The numbers are striking. According to The Coca-Cola Company, bottling made up 52% of its consolidated net revenue in 2015. By 2024 that had fallen to 13%. In those 10 years, revenue was roughly flat $44.3bn vs $47.1bn, while profits grew 45% $7.35bn vs $10.63bn, as operating and net profits grew significantly. 

The pendulum, in other words, has swung hard back towards the brand. Which raises the obvious question: if Coca-Cola keeps selling the pipes, who is buying them?

The answer, in Africa, is Coca-Cola HBC. 

Coca-Cola HBC is one of Coca-Cola's largest bottling partners, operating across 29 markets and serving around 740 million people. It is the world's third-largest Coca-Cola bottler by volume, listed on the London Stock Exchange, a member of the FTSE 100, and domiciled in Switzerland.

In 1951 the Greek-Cypriot entrepreneur A.G. Leventis founded the Nigerian Bottling Company. Production began two years later, reportedly in the basement of the Mainland Hotel in Lagos, and NBC grew into one of the country's largest manufacturers, listing on the Nigerian Stock Exchange in the 1970s.

That Nigerian business became the seed of something far larger. The group acquired a Coca-Cola franchise in Greece in 1981 and, through a series of mergers, took the Coca-Cola HBC name in 2001. As the parent grew, it tightened its grip on one of its most valuable arms. In September 2011 Coca-Cola HBC bought out NBC's minority shareholders and delisted the company, taking it fully private. 

Nigeria's soft-drinks market is worth roughly $4.8bn a year in consumption, and carbonated drinks make up about 81% of demand. The market is effectively a duopoly, with NBC's Coca-Cola brands facing Seven-Up's Pepsi, 7Up and Mirinda.

And the investment keeps coming. NBC commissioned three new production lines in July 2026, part of a $1bn five-year programme the Coca-Cola system announced in 2024, building on more than $1.5bn invested in Nigeria over the previous decade. But note the language. The company framed the spending as "subject to a predictable and enabling business environment". AKA FX and policy risk are real, and investments are conditional on a stable economy. 

Seventy-five years after Leventis opened that first plant, the Nigerian operation, though no longer the whole company, is about to get much bigger.

In October 2025, Coca-Cola HBC agreed to buy a controlling 75% of Coca-Cola Beverages Africa, the continent's largest Coca-Cola bottler, in a deal valuing the whole business at $3.4bn. Once it closes, Coca-Cola HBC becomes the second-largest Coca-Cola bottler in the world by volume and the dominant one in Africa, controlling roughly two-thirds of the continent's Coca-Cola volume.

The deal is clearing its hurdles. South Africa's Competition Commission recommended approval in July 2026, subject to conditions including a secondary listing on the Johannesburg Stock Exchange. Approvals in other African markets are still in train.

The logic is demographic and strategic. Africa has a young, growing population and low per-capita consumption, which is exactly the runway a bottler wants. 

The party that owns the brand stays light, keeps the margin and lets go of the operating headache whenever it can. The party that owns the bottling carries the plants, the trucks, the naira exposure and the regulatory heat. For most of that history, the bottler's seat has been the harder, less glamorous one. 

But as we learned in the Tolaram <> Indomie Deep dive, owning the distribution is always valuable when affiliated with iconic brands. A single bottler that owns the route to market across a continent, permanently, is no longer just a contractor filling glass. It controls the pipes. And pipes, at that scale, become an asset worth owning in their own right, with pricing power and a moat that a brand licence alone cannot buy.

That is the bet Coca-Cola HBC is making across Africa, 75 years after it started in Lagos. The question it leaves for the rest of us is the one worth carrying into any business: do you own the brand, the distribution, or both? And where is it sensible to pick one.