Coke credits emerging markets for high earnings
Dubai, November 11, 2008
Muhtar Kent, president and CEO of Coca-Cola International, has attributed the soft drinks giant's 14 per cent third quarter earnings growth to the company’s adaptability to local markets around the world.
The Turkish national, who assumed his new role in July 2008, said, 'Operational flexibility has allowed Coca-Cola to prosper even in times of economic instability. Our international operations, particularly the emerging markets, continue to drive our growth more than offsetting the challenges that we are addressing in North America.'
'We anticipate the operating environment, especially in North America, will continue to be challenging as we finish 2008 and move into 2009. However, we have been diligent in taking the evolving landscape into account in our plans for 2009, and I remain confident that the Coca-Cola system is well positioned for the future.'
The company uses varied distribution and retail techniques in emerging markets, adapting to the local landscape and culture, with knock-on benefits for the indigenous market.
Kent cites the example of Coca-Cola’s manual distribution centre network in Africa, which allows independent entrepreneurs to set up distribution centres on behalf of the company. Nearly 2,300 of the distribution centres have been set up by small business owners — many of them women — across Africa, with the goal of adding 1,300 to 2,000 more.
Together, the centres have the potential to generate as many as 8,400 jobs and $520 million in revenue over the next three years.
While thousands are employed in Coca-Cola bottling facilities worldwide, the backbone of the company’s international strength is small comprising independent retailers or vendors, and ranging from corner stores to pushcarts in the largest cities and the smallest villages, many of whom are started by an initial injection of support from Coca-Cola itself.
For instance, pushcart programmes in Vietnam have established more than 4,000 retailers with their own businesses to date.
Independent studies on the economic impact of Coca-Cola’s business in Asia, Africa and Eastern Europe have shown that for every job in the Coca-Cola system, an average of 10 more jobs are supported in local communities. The most recent study showed that in South Africa, one job in the Coca-Cola system supported a further 16 jobs indirectly.
Coca-Cola distributes in over 200 countries around the world, and is the world’s No.1 consumer brand.-TradeArabia News Service