Company Report: Coca-Cola Shanduka Beverages
They're loving it Coca-Cola Shanduka Beverages is the first black-owned bottler in South Africa, and is using the clout of one of the world’s biggest brands to help its local community

Coca-Cola Shanduka Beverages was established in 2007

Coca-Cola Shanduka Beverages is the first black-owned bottle

The Shanduka Group acquired it's partnership with the C

Coca-Cola Shanduka Beverages is a company reborn. Originally existing as Scarlet Ibis, established 40 years ago, the bottling company didn’t really exist in its current form until May 2007, when the Shanduka Group acquired it in partnership with the Coca-Cola Corporation.

Managing Director, Brett Naidoo, is the first to point out that although the company is well established and respects what has gone before, in many ways Coca-Cola Shanduka is a new company.

“I think the company’s changing,” he says, reflectively. “There’s new ownership, a different culture, and we’re encouraging a different set of behaviours. I think our values change. There’s still not really a conflict with the company’s traditional values, but we’re having to change the way we do things.

“One example is, it was a family-run business, with a very centralised command structure. Now we’ve gone to different ownership we’re in a more corporate environment, and we’re driving an empowered decision making process. So we’re moving away from decisions made by one individual, through a process now where each department has very clear performance objectives and have parameters within which they can make decisions to achieve that.”

Empowerment is a watchword at Coca-Cola Shanduka. As the first black-owned bottler in South Africa, the company is intended to be a guiding light for others to follow.

“What is important for us is we have every intention to be a role model, so we can prove this is a successful model, and provide a platform for black ownership and that is pretty much in line with the Shanduka group’s philosophy,” Naidoo explains.

The Shanduka Group, which has a 70 percent share in the company, has a history with the black empowerment project that goes all the way back to apartheid. The company’s founder, lawyer, trade union leader and activist, Cyril Ramaphosa, was on the National Reception Committee when Nelson Mandela was released from prison.

A SUCCESSFUL PARTNERSHIP
Of course, the other company with a stake in Coca-Cola Shanduka needs no introduction. Coca-Cola is one of the most recognised brands on the planet. Naidoo believes that it’s an arrangement that benefits both sides.

“We believe that under the franchise model there are opportunities and benefits for both parties in this relationship,” Naidoo says. “From our position, of course, we have the advantage of being part of one of the world’s most successful beverage brands. The opportunities and benefits Coca-Cola get from partnering with us is that, because we’re a black empowerment bottler, it allows Coca-Cola to be involved with increasing and encouraging black economic empowerment. More importantly, what we’re doing is marketing. We have a much better understanding of the local market, which Coca-Cola, being a global company, could never expect to achieve. So if you marry those two, a good strong understanding of the local market, with a good strong brand, it creates an ideal partnership.”

It’s a partnership that’s prospering, and the company is growing well. Just recently, the company purchased its own on-site bottle blowing facilities.

“What usually would have happened is bottlers would buy empty bottles from the supplier; then we would bring the bottles on site and fill those bottles,” Naidoo explains. “That’s when we realised we had an opportunity to try and lower the cost of production. Before we were effectively paying to transport empty bottles to the plant and fill them up. So we decided to install an in-line blowing facility on our premises, where we take the perform bottles and blow them into shape. That allowed us to bring the cost of our bottles down from buying it as a finished product.”

HELPING THE COMMUNITY
Coca-Cola Shanduka is dedicated towards useing the resources of that partnership to benefit its local community.

“We are an important player in the market,” says Naidoo. “What’s important for us is we must have a positive impact on this community, so our strategy is to ensure we help and support small retailing traders so that we can help them with entrepreneurial development. We support it, and strive to make sure we do the right thing for small customers and general trade customers.”

Coca-Cola Shanduka does this partly by striving to have promotional programmes targeted to those types of customers. Many of its promotional programmes are tailored for the smaller customers. But this isn’t all the company does.

Naidoo says: “The second thing we do is over the course of the year we will run training programmes where customers will come into our premises and we will run programmes for them on how to manage their business, business fundamentals and basic financial skills, so we help them with sustainability.”

This sort of support is needed now more than ever, because as traders are growing it is putting a lot of pressure on smaller retailers.

As well as giving a leg-up to the smaller retailers, Coca-Cola Shanduka finds other ways to help its community. One event over the next year that’s guaranteed to bring communities together is South Africa’s 2010 World Cup. “We also aim to support the community at large. Next year, we will try to take the World Cup out to small rural communities. In our territory we don’t fall anywhere near the stadiums, so to benefit our people we will be setting up public viewing areas where the public can come in and view those matches.”

And while they’re enjoying the game, Food and Drink Digital is sure everyone will also enjoy a cool drink of Coke.

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