Marketing, consumer focus sustaining factors of Coke for 129 years
Coca Cola with headquarters in Atlanta, USA, has been in existence since 1886. It came to Africa since 1928. For over a century, the brand has remained fresh and sparkling. The company divided its global marketing operations into five regions -North America, Asia and Pacific, Latin America, Greater Europe and Eurasia, and Africa. Each one is headed by a president who reports to overall president. The president of Eurasia and Africa, Nathan Kalumbu, whose region contributes about 19 percent to the company’s growth, in this interview with Daniel Obi, at the just concluded World Economic Forum in Cape Town, South Africa, was optimistic about Africa growth. Excerpt:
How would you describe the WEF in South Africa?
Coca Cola has been associated with WEF for a long time. We are also co-sponsor of global shapers initiative. In this particular WEF, we had a number of great interactions; we launched our youth empowerment where we are committing to empower 25,000 youth in the next three years. We also concluded a meeting with UN women where we marked 5 years of our 5by20 women empowerment programme. We also interacted with government officials and civil society and shared thoughts on Africa’s potentials, the future and Africa’s challenges. It was great to see the meeting of minds between the parties on the size of the opportunities, challenges and how other companies are addressing the issues. WEF is always a good platform where all the entities that help grow economies and grow the prospects of communities come together and share ideas on how to progress Africa. It is also very good that WEF is working for regional growth to be able to focus on growth for specific countries.
You sound confident about Africa’s growth, are you?
I am really confident about Africa growth. If you look at Coca Cola Company, we have been in Africa for 87 years. When we came in 1928, we saw a lot of promise and we have built on it since then and when we look in to the future, we see even greater promise on the Africa. We are really committed to Africa. We run a business model that runs across all countries in Africa and we are one of the largest employers of labour. We are privileged to be part of this historic time for Africa. It is time for positive change and I am sure Africa will not lose the opportunity.
Could you assess the business of Coke in the first half of 2015 in your region
We have a growing business. We had a good beginning in the year. The Southern Africa business is growing so also East and West Africa. Africa is really a spotlight. We are really excited about the opportunity Africa presents today and the future. In the first quarter of this year, the Eurasia, Africa region grew by 4 percent. Business has been good.
In 2009, you launched Replenish Africa Initiative, what is it all about and what is the progress
This is a programme I am passionate about. Water is finite and important resource. In Coca Cola we use water as key ingredient in making our product. Water is also life. The framework of our sustainability focuses on water, women and well being. So the Replenish Africa Initiative objective is to provide water to 2 million Africans by 2015. We are now on target. This programme has touched 37 countries in Africa and it has touched more than 2,000 communities. We are really passionate about it as we are working with grassroots in improving water and sanitation. The launch of this water programme in a community in Kenya, improved attendance to schools and the school is selling the water to the near community, raising some fund to sustain the infrastructure in the school. Because of the RAIN success, we have now launched part 2 of RAIN which we are starting this year. We have invested additional $35 million that will begin from 2016 to 2020 to empower additional 4 million African communities. The first $30 million we invested empowered 2 million, now the next $35 million is empowering additional 4 million. The question is how come we are empowering more with less amount, it is because we have acquired a lot of learning and a lot of partners to invest with us.
Again you intend to empower about 5 million women by 2020, tell me about it
We are making good progress on this initiative. In Africa, alone we have empowered 500,000 women. The 5 million women is a global initiative. We are looking at women empowerment in different levels. Globally over one million have been empowered. The focus includes giving women business skills, creating and mentoring groups among the women, helping women access financial services and in some cases we support women with sales equipment. Some of them are suppliers of ingredients for our production and some are retailers. Our philosophy is that the strength of our business and its sustainability are heavily dependent on the strength and sustainability of communities. If communities are not successful, our business is not successful. We are always looking for that intersection point between what works for our business and what works for communities. It is a programme that aligns our interest as an organisation with interest of communities and finding ways to work together and uplifting both parties growth.
Coke has remained fresh and sparkling for over 100 years, what is the secret?
There are number of secrets. But the most is focusing on consumers and being able to understand what consumers want. For instance, as Africa continues to grow and African middle class grows, it is demanding more option of beverages. Our company started broadening the portfolio of its products to suit the needs of consumers. For instance, when we started in Nigeria we were Coke business but today we are juice, water business and we continue to expand that to suit what the consumers want. We are also changing our packaging in big, small, pet and returnable bottles. We are always looking at the needs and wants of consumers. Another factor is our ability to work with communities and government in making progress. The other elements are quality and marketing which resonates with consumers.
How is Coke responding to consumers change from sugar?
We engage in societal issues but this is not an issue that can be resolved by one company. Neither is it an issue that can be resolved by pointing fingers at one company, but an issue that requires civil society, governments and all the companies to come together to find solution. At the end of the day, our company recognises its responsibility in contributing to the solution of the societies challenges. Among them is recognising the fact that all food and beverages need to be taken in moderation. The next thing is that we are also communicating the amount of calories and the amount of sugar so that consumers can make a choice. We are also increasing the number of packages for consumers so that consumers can choose. Another thing is that we are investing heavily in expansion of product portfolio for consumers choice. We are also promoting active health lifestyle.
What are those challenges in business that you confront in your region
Infrastructure is a major challenge. Others are the issues of electricity, transportation, communication. If Africa is able to address these infrastructure issues, I think we should be able to empower communities and empower companies. Human capital is a challenge we have but we are working through it. Looking at infrastructure deficit, Africa probably needs to be investing about $93 billion dollars to address the infrastructure challenge. The continent is investing today half of what is needed on the challenge in order close the gap. Human capital comes right behind it. But I think we are making progress in that regard.