Company Reports - Coca-Cola Fortune
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Coca-Cola Fortune
The Leading Brand
Written by Chris Farnell & Produced by John Holliman
Coca-Cola needs no introduction. If you’ve been in a shop, or passed a vending machine today, you’ve probably seen its products. Coca-Cola is the very definition of brand recognition, and the bottling companies that produce and distribute its products are well aware of the strength of the name they are carrying. “It’s the most highly valued brand in the world,” says Phil Roux, simply.
Phil Roux is Managing Director of Coca-Cola Fortune in South Africa, he knows perhaps better than anyone the strength of the Coca-Cola brand. Phil Roux is a relatively recent addition to the Coca-Cola Fortune operation, but an old hand at the food and drink industry. He joined the company at the start of 2009 as the Division Director Southern Africa, moving there from his position as Executive Director of Tiger Brands Limited. Phil Roux knows the food and drink industry well, having built up over a decade’s experience in leadership positions at Irvin& Johnson, before moving to the Tiger Brands group where he quickly established himself in the company. Talking about the power of the Coca-Cola brand, he says: “It typically rides out the economic cycles in a fairly robust way.”
Coca-Cola Fortune came about following a merger, between the South African operations of Coca-Cola Sabco and the Kunene family’s Fortune Beverages in 2002. Before that merger, both companies had already built up a prestigious history in the South African beverage industry.
Coca-Cola Sabco’s roots go back as far as the 1930s when an American businessman set up a Coca-Cola distribution centre in the country. Market demand for the soft drink inspired the opening of the first bottling plant in Port Elizabeth in June 1940. That same year, PR Gutsche joined the operation, signaling the start of an involvement that passed from father to son, and which has endured for more than six decades. On November 1, 1995, the SA Bottling Company became Coca-Cola Sabco and the seven business units, which had existed independently during the apartheid era, were finally brought together.
Fortune Beverages was founded by entrepreneurial businessman, Fortune Kunene in 1978. It grew from a small Coca-Cola distribution centre in Vosloorus near Johannesburg into one of South Africa’s significant bottlers. When it sealed the merger with Coca-Cola Sabco, Fortune Beverages consisted of two plants and over 600 employees.
Combining their strengths, Coca-Cola Fortune went on to become the second-largest Coca-Cola bottling and distribution company in South Africa. Coca-Cola Fortune now has bottling plants in Bloemfontein, Port Elizabeth, Port Shepstone, Polokwane, Nelspruit and Border Kei, with 22 sales centres and 3,600 employees. It serves 80 percent of the country’s land mass, establishing its position as a leader in the rural and emerging markets with annual sales volumes that exceed 130 million unit cases.
With a portfolio of well-known brands such as Coca-Cola, Coke Light, Coke Zero, Fanta, Sprite, Tab, Stoney, Iron Brew, Bonaqua, Valpre, Powerade, Minute Maid, and those from the Schweppes, Sparletta, Krest and Twist groups, Coca-Cola Fortune is a true market leader.
Even within the Coca-Cola brand, Coca-Cola Fortune has achieved industrywide recognition, winning the Bottler of the year award in 2008. Bottler of the year is an award annually presented by the Coca-Cola Company to the bottler with the best business results.
A BRAND GIANT
Coca-Cola Fortune has taken full advantage of its position in the behemoth of the soft drinks industry. “We’re part of the Coca-Cola system,” Roux says. Coca-Cola Company supply concentrate and do the branding, and we do every bit of activation, we produce, we distribute, we sell and we activate in stores and own the customer relationship.”
It’s brought Coca-Cola Fortune a great many advantages. At a time when many companies are struggling to attract and keep the necessary talent, Coca-Cola is still a name any employee would want to be associated with.
“We are not immune to global skill shortages,” Roux admits. “But what being Coca-Cola does afford us is a strong employer value proposition. People want to be associated with brand Coke. People want to work for our company because it bolsters their CV. If you say you’ve worked for Coke, it bolsters your proposition. Because we are a multinational, we are fortunate in that we can move people around, we have access to global skills.”
The Coca-Cola name comes with other perks as well. “We are a critical player in our suppliers and customers portfolio and the global nature of the brand makes it a fantastic environment from a learning and growth perspective,” Roux says. “The Coca-Cola Company has global best practice in terms of its entire value chain. So if you look at quality management, manufacturing practices, availability models, if you look at our branding capability, those are best in their class, and our employees and customers recognise that.”
Of course, with those perks come the responsibilities that come with representing such a large global brand, and Coca-Cola Fortune is subject to thorough auditing and quality checks, both internal and external.
“The Coca-Cola Company audits us rigorously,” Roux says, “and we measure ourselves. So where there are audit risks identified by the Coca-Cola Company in advance of formal audits of our plant, we go over our quality standards in absolute detail and consequently by the time they audit us we’re usually ready. Admittedly, we don’t always get it right, but that’s because the global standards set by the Coca-Cola Company are hugely stringent.”
GIVING SOMETHING BACK
Another side of the responsibility that comes with representing the Coca-Cola brand, is the duty Coca-Cola Fortune has to the wider community in-line with Coke’s Corporate Responsibility policies. This means fostering an open and inclusive work environment for its employees built on established workplace human rights. This commitment is backed by clear policies, processes and actions — through which Coca-Cola Fortune strives to develop a highly motivated, productive and committed workforce.
It also means a responsibility to the marketplace, providing products and services that meet the growing beverage needs of Coca-Cola Fortune’s consumers in a responsible manner. This means adopting an inclusive approach aimed at providing sustainable business benefits and opportunities for customers and distributors. At all times Coca-Cola Fortune considers the unique needs and contexts of the local community in its marketplace dealings, and it has developed key policies, processes and routines to ensure that its engagement with the marketplace is consistent and responsible.
This bottling firm is also dedicated to driving locally relevant, sustainable projects that give rise to economic opportunities, improve the quality of life and foster goodwill within the surrounding communities. This requires an investment of time, expertise and resources to ensure community initiatives are focus-driven and effective.
Finally, Coca-Cola has a responsibility to the environment. The firm integrates principles of environmental stewardship and sustainable development into all of its business decisions and processes. Its approach goes beyond the appropriate use of resources within Coca-Cola Fortune, the company aims to make a difference in the external environments surrounding its operations.
TOUGHING OUT THE DOWNTURN
Of course, of all the times to have the might of a corporation like Coca-Cola behind you, there can be few better than the recent global financial crisis.
“Our products are at the premium end. So our volumes have come under pressure,” Roux admits. “But because of our branding power and continuing investment and relentless focus on cost management, we have managed to see real growth and operating leverage in our business despite the challenging environment that we have been operating in of late.”
For Roux, the reason for Fortune’s continued success is clear. “The key to our success is a relentless focus on defending our brand shares, on managing our costs, and managing our velocity, our working capital, and the return on our asset base,” he says. “There’s evidence to suggest we always outperform economic growth. We always outperform the GDP of the country.”
With the global recession almost behind us, Coca-Cola Fortune is now looking to the future. “We think that there’s still upside in growing organically,” says Roux, referring to the bottling companies’ plans. “The way we will achieve organic growth is through economic growth, share gains and opportunities to increase consumption. We also see a significant upside in growing our still drinks portfolio.”
The future’s looking bright for Coca-Cola Fortune. We wish them all the best.
Phil Roux is Managing Director of Coca-Cola Fortune in South Africa, he knows perhaps better than anyone the strength of the Coca-Cola brand. Phil Roux is a relatively recent addition to the Coca-Cola Fortune operation, but an old hand at the food and drink industry. He joined the company at the start of 2009 as the Division Director Southern Africa, moving there from his position as Executive Director of Tiger Brands Limited. Phil Roux knows the food and drink industry well, having built up over a decade’s experience in leadership positions at Irvin& Johnson, before moving to the Tiger Brands group where he quickly established himself in the company. Talking about the power of the Coca-Cola brand, he says: “It typically rides out the economic cycles in a fairly robust way.”
Coca-Cola Fortune came about following a merger, between the South African operations of Coca-Cola Sabco and the Kunene family’s Fortune Beverages in 2002. Before that merger, both companies had already built up a prestigious history in the South African beverage industry.
Coca-Cola Sabco’s roots go back as far as the 1930s when an American businessman set up a Coca-Cola distribution centre in the country. Market demand for the soft drink inspired the opening of the first bottling plant in Port Elizabeth in June 1940. That same year, PR Gutsche joined the operation, signaling the start of an involvement that passed from father to son, and which has endured for more than six decades. On November 1, 1995, the SA Bottling Company became Coca-Cola Sabco and the seven business units, which had existed independently during the apartheid era, were finally brought together.
Fortune Beverages was founded by entrepreneurial businessman, Fortune Kunene in 1978. It grew from a small Coca-Cola distribution centre in Vosloorus near Johannesburg into one of South Africa’s significant bottlers. When it sealed the merger with Coca-Cola Sabco, Fortune Beverages consisted of two plants and over 600 employees.
Combining their strengths, Coca-Cola Fortune went on to become the second-largest Coca-Cola bottling and distribution company in South Africa. Coca-Cola Fortune now has bottling plants in Bloemfontein, Port Elizabeth, Port Shepstone, Polokwane, Nelspruit and Border Kei, with 22 sales centres and 3,600 employees. It serves 80 percent of the country’s land mass, establishing its position as a leader in the rural and emerging markets with annual sales volumes that exceed 130 million unit cases.
With a portfolio of well-known brands such as Coca-Cola, Coke Light, Coke Zero, Fanta, Sprite, Tab, Stoney, Iron Brew, Bonaqua, Valpre, Powerade, Minute Maid, and those from the Schweppes, Sparletta, Krest and Twist groups, Coca-Cola Fortune is a true market leader.
Even within the Coca-Cola brand, Coca-Cola Fortune has achieved industrywide recognition, winning the Bottler of the year award in 2008. Bottler of the year is an award annually presented by the Coca-Cola Company to the bottler with the best business results.
A BRAND GIANT
Coca-Cola Fortune has taken full advantage of its position in the behemoth of the soft drinks industry. “We’re part of the Coca-Cola system,” Roux says. Coca-Cola Company supply concentrate and do the branding, and we do every bit of activation, we produce, we distribute, we sell and we activate in stores and own the customer relationship.”
It’s brought Coca-Cola Fortune a great many advantages. At a time when many companies are struggling to attract and keep the necessary talent, Coca-Cola is still a name any employee would want to be associated with.
“We are not immune to global skill shortages,” Roux admits. “But what being Coca-Cola does afford us is a strong employer value proposition. People want to be associated with brand Coke. People want to work for our company because it bolsters their CV. If you say you’ve worked for Coke, it bolsters your proposition. Because we are a multinational, we are fortunate in that we can move people around, we have access to global skills.”
The Coca-Cola name comes with other perks as well. “We are a critical player in our suppliers and customers portfolio and the global nature of the brand makes it a fantastic environment from a learning and growth perspective,” Roux says. “The Coca-Cola Company has global best practice in terms of its entire value chain. So if you look at quality management, manufacturing practices, availability models, if you look at our branding capability, those are best in their class, and our employees and customers recognise that.”
Of course, with those perks come the responsibilities that come with representing such a large global brand, and Coca-Cola Fortune is subject to thorough auditing and quality checks, both internal and external.
“The Coca-Cola Company audits us rigorously,” Roux says, “and we measure ourselves. So where there are audit risks identified by the Coca-Cola Company in advance of formal audits of our plant, we go over our quality standards in absolute detail and consequently by the time they audit us we’re usually ready. Admittedly, we don’t always get it right, but that’s because the global standards set by the Coca-Cola Company are hugely stringent.”
GIVING SOMETHING BACK
Another side of the responsibility that comes with representing the Coca-Cola brand, is the duty Coca-Cola Fortune has to the wider community in-line with Coke’s Corporate Responsibility policies. This means fostering an open and inclusive work environment for its employees built on established workplace human rights. This commitment is backed by clear policies, processes and actions — through which Coca-Cola Fortune strives to develop a highly motivated, productive and committed workforce.
It also means a responsibility to the marketplace, providing products and services that meet the growing beverage needs of Coca-Cola Fortune’s consumers in a responsible manner. This means adopting an inclusive approach aimed at providing sustainable business benefits and opportunities for customers and distributors. At all times Coca-Cola Fortune considers the unique needs and contexts of the local community in its marketplace dealings, and it has developed key policies, processes and routines to ensure that its engagement with the marketplace is consistent and responsible.
This bottling firm is also dedicated to driving locally relevant, sustainable projects that give rise to economic opportunities, improve the quality of life and foster goodwill within the surrounding communities. This requires an investment of time, expertise and resources to ensure community initiatives are focus-driven and effective.
Finally, Coca-Cola has a responsibility to the environment. The firm integrates principles of environmental stewardship and sustainable development into all of its business decisions and processes. Its approach goes beyond the appropriate use of resources within Coca-Cola Fortune, the company aims to make a difference in the external environments surrounding its operations.
TOUGHING OUT THE DOWNTURN
Of course, of all the times to have the might of a corporation like Coca-Cola behind you, there can be few better than the recent global financial crisis.
“Our products are at the premium end. So our volumes have come under pressure,” Roux admits. “But because of our branding power and continuing investment and relentless focus on cost management, we have managed to see real growth and operating leverage in our business despite the challenging environment that we have been operating in of late.”
For Roux, the reason for Fortune’s continued success is clear. “The key to our success is a relentless focus on defending our brand shares, on managing our costs, and managing our velocity, our working capital, and the return on our asset base,” he says. “There’s evidence to suggest we always outperform economic growth. We always outperform the GDP of the country.”
With the global recession almost behind us, Coca-Cola Fortune is now looking to the future. “We think that there’s still upside in growing organically,” says Roux, referring to the bottling companies’ plans. “The way we will achieve organic growth is through economic growth, share gains and opportunities to increase consumption. We also see a significant upside in growing our still drinks portfolio.”
The future’s looking bright for Coca-Cola Fortune. We wish them all the best.
