Coca-Cola adopts mixed strategy

09 July 2009

MOSCOW: The combination of a global brand promise and a "strong local presence" is helping Coca-Cola thrive in a diverse range of markets around the world, says Ahmet Bozer, president of the company's Eurasia and Africa Group.

The US soft drinks giant has increasingly been focusing on the idea of "global tribes", but Bozer argues its overarching approach is operating alongside an emphasis on working with "partners who are well-connected in the community."

He further suggested that the food and beverage sector is somewhat insulated from the impacts of the economic downturn, as consumers will always need to buy staple goods.

"All of us have to consume approximately two litres of liquids every day," he said, and Coca-Cola fulfils "a small portion of that around the world."

While the recession is exerting pressure on many companies, the Atlanta-based corporation also remains "confident about our business" and knows "how to deal with" the financial slowdown.

Indeed, Bozer dismissed the idea that "the good old days of growth will never come back," as "we have been through this before,” such as in "the Russian, the Latin American, the Asian and Turkish crises."

"As we become a total beverage company, expanding our product range into other categories, the opportunities in front of us are very big for a long time to come," he said.

One example of a potential growth area is in Eurasia and Africa, where there "is an emerging middle class, and people who may not be spending money now are joining the consumer class."

"The trend may be becoming a little slower than what was happening in the past few years, but it will resume," Bozer predicts.

Furthermore, Coca-Cola is "marching along without issues" in countries such as India, where its revenues rose by 28% in the final quarter of last year, and by 31% in the first three months of 2009.

With regard to its operations in the Middle East, Bozer said the company is prospering in a number of challenging markets.

Coca-Cola was "the first multinational in the Palestinian Authority," where its "business is growing faster than the rest of the Middle East," while its operations in Iraq are also "thriving."

"Part of working in this territory is that you have to accept that there are challenges in your external environment," he said.

Overall, sales levels in the beverage sector could also prove to be a bellwether for the economic recovery, Bozer suggested.

This is because companies like Coca-Cola sell products in lots of small stores, giving an insight into purchase behaviour at the micro level.

Data sourced from Gulf News; additional content by WARC staff