Chapter 4

EMERGENCE INTO INTERNATIONAL MARKETS

In the early seventies, the Royal Crown Cola Company made a serious commitment to its overseas development and at that time, a number of experienced soft drink people were assembled to manage and direct the Company's international efforts. Since then RC Cola has been able to establish a viable base in the world market, and as of 1996 is sold in 62 countries through a network of 105 franchise bottling plants and distributors.

The international growth of RC is due, in part, to the fact that the world cola market is immense. Cola is by far the most popular flavour in the US, with over 60% of the market and most countries around the world it is fast approaching a similar share. RC Cola has been able to reach a strong competitive position in the world market because of its ability to innovate and to adapt to various market needs.

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To develop its international potential, Royal Crown Cola Co. International divided the overseas market into five major sales areas: Europe, Middle East/Africa, Far East, Latin America, CIS/Baltics, and organized appropriate field staff and concentrate manufacture to service these areas. RC Cola has been very selective in its international growth, emphasizing quality rather than quantity as it relates to the bottler organization.

Prior to 1970, most international RC plants were modest "outpost" operations. It has since been determined that to get a share of the hard-fought cola category, it takes a substantial, well managed bottler operation that can give RC Cola dedicated support. For a cola brand to be viable, it also takes an all-out marketing effort on a continuing basis.

In 1975, Donald A. McMahon assumed the presidency of Royal Crown Cola Co. and Edward F. O'Reilly became president of the newly created soft drink division. Under O'Reilly's leadership growth began once again to exceed that of the total industry.

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That was the year the advertising slogan "Me and My RC" swept the country. It was also the year that the company's corporate headquarters moved from

Columbus Georgia to Atlanta, leaving the soft drink division only in the Columbus office. Arby's, (phonetic spelling of the initials R.B., for "R"affei "b"rothers) a fast food chain specializing in roast beef sandwiches, was added to the Royal Crown Cola Co's list of acquisitions in 1976.

In 1978, the corporate name was changed to Royal Crown Companies, Inc. to reflect the diversification. The soft drink division remained Royal Crown Cola Co. Also in 1978, Fred M. Adamany, a successful bottler from Rockford, Ill. was named president of the soft drink division. Division headquarters were moved to Rolling Meadows, Ill., a suburb of Chicago. Included in the move were the president's office, sales and marketing. Financial, production, syrup and international departments remained in Columbus, Georgia office.

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Under Adamany's direction, Royal Crown Cola Co. in 1980, introduced the first caffeine free cola, RC 100, striking a responsive chord with millions of consumers and, once again opening a new soft drink segment. This was followed in 1983, by another innovation a reintroduction of Diet Rite as a salt/sodium free, caffeine free, sugar free cola using a blend of NutraSweet, G.D. Searle's brand of aspartame, as the sweetening agent. Diet Rite sales rose rapidly and continue to climb today.

img4.jpg (11887 bytes) Adamany resigned as Royal Crown Cola president in 1984 when Royal Crown Companies, Inc., and all of its divisions, were acquired by Chesapeake Financial Corporation, a Victor Posner affiliate. In November, 1984, James W. Harralson, formerly Royal Crown Cola Co. Vice President of Finance, was appointed Executive Vice President and Chief operating Officer of the soft drink division in Rolling Meadows, Illinois.

Royal Crown Companies Inc. corporate headquarters were relocated from Atlanta, Georgia to Miami, Florida.

Under Harralson, RC Cola made headlines nationwide in 1986 by charging competitors with federal anti-trust law violations. He took out full page newspaper ads declaring that proposed acquisitions by the soft drink giants would give them combined 80 percent market share. The Federal Trade Commission and federal judge upheld RC's positions. The proposed buyouts were promptly abandoned.

Harralson's regime known at RC headquarters as "RC's Feisty Years" included introduction of Cherry RC, Diet RC and an eight-flavour line of Diet Rite. Diet Rite sales jumped 56 percent while RC Cola sales volume rose 8 percent under Harralson.

By the early 1990s Posner's empire was collapsing under investigations and lawsuits, including one brought by shareholders of his DWG holding company charging that he and his son Steven had drained its assets to line their own pockets. In 1993 a federal judge banned Posner and his son from ever running any public company.

In mid 1993, Royal Crowns ownership changed to Triarc Companies Inc. and Mr. John Carson was appointed President and Chief executive officer. Under Carson's leadership, Royal Crown has had notable success in upgrading in bottling system, its links to retailers and consumers.

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In 1995, Triarc purchased the Mistic fruit and tea beverage. On June 14, 1995, the Royal Crown Company, Inc., proudly announce the world's first premium draft cola,

Royal Crown Draft. Hand-crafted, high quality production methods combine pure cane sugar (no corn syrup), the finest Kola nuts available, all-natural flavours and pure filtered water to produce Royal Crown Draft's rich, smooth and fresh draft taste. Unfortunately, due to the controversy over the "beer bottle" shape, and the high price, it was not a money maker and was discontinued.

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March 27, 1997, was the day Triarc Companies Inc., announced that it had reached a definitive agreement to acquire Quaker Oats Co's Snapple Beverage Corp. for $300 million in cash. Quaker bought Snapple in 1994 for 1.7 billion.

Royal Crown Cola Co. should be proud of its products and of the bottlers who distribute them. Together they maintain the high standards which were established by the company's pioneers, Claud A. Hatcher would surly be proud.

End of RC Cola Story

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