Coca-Cola plans major investment in Africa

28 September 2010

NAIROBI: Coca-Cola, the soft drinks giant, will spend $12bn (€8.9bn; £7.6bn) in Africa during the next decade, as it seeks to heighten its regional presence.

Speaking to newspaper The East African, Nathan Kalumbu, ceo of Coke's Central Africa Business Unit, said the recession's local impact had not been "as intense" compared to the US and Europe.

"The growth momentum that we began to see in 2008 continued into 2009, and the economic growth in 2009 coincided with the 2010 FIFA World Cup event, all of which have supported our growth this year," he said.

"In totality, over the past ten years, the Coca-Cola system has invested more than $5bn on the African continent, and we plan to invest another $12bn by 2020."

Markets dependent on commodities and exports - such as Angola, the Democratic Republic of Congo, Kenya and Zambia - experienced the greatest negative fallout in the downturn, but also yielded valuable lessons.

"We should never stop communicating with our consumers," said Kalumbu. "We have learnt to improve our flexibility and speed of response … In any crisis, cash is king, and must be managed well."

Coke is basing its African strategy on a lasting commitment, rather than reacting to fluctuating circumstances.

"We have a long-term perspective of our business in Africa," Kalumbu said "This means that short-medium term shifts in economic fundamentals have not influenced our long term view of our businesses in the region."

Competition is increasing as domestic and multinational corporations battle for market share, but wider issues demand equal attention.

For example, many shoppers must balance limited discretionary expenditure across various needs covering everything from mobile phones to snacks.

"In more economically depressed areas, consumers often have to choose between airtime and other products," said Kalumbu.

"Companies should strive to stay as relevant as possible to these consumers so that they continue to be part of their considerations."

Concerning advertising, Coca-Cola coordinates its output in 27 countries from Nairobi, an approach which Kalumbu suggested offered numerous advantages.

"We believe that consumers around the world are more alike than different, whilst our products fulfil very basic physical and emotional needs, so finding common ground is not that difficult," he said.

"We believe that good insights are universal, whilst great creative transcends cultural differences. The challenge comes with message interpretation of our marketing messages."

Digital media constitutes the "next phase" of this process, according to Kalumbu.

"The vast majority of the youth- who form the majority of our consumers- can now affordably interact on social media platforms such as Facebook, Twitter, MySpace, blogs etc," he said.

Data sourced from The East African; additional content by Warc staff