Enterprise Development Defies Third Wave

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South Africa, 09 June 2021 – Even as South Africa tightens Covid-19 restrictions in anticipation of a third wave of the pandemic, Coca-Cola Beverages South Africa (CCBSA) has reaffirmed its commitment to its logistics network by hosting the annual Local Distribution Partnership (LDP) Lekgotla on 02 June 2021.

The full-day event themed “Emerging Stronger at Full Potential” was hosted virtually, with 71 LDP operators engaging with key CCBSA leaders in charting a unified growth strategy over the coming year. This was especially critical as the annual event was cancelled in 2020 due to the Covid-19 outbreak.

“Our LDP partners are extremely important to our supply chain and have endured some of the greatest challenges, as they are an essential service that had to be on the ground dealing with customers, unable to work remotely like other functions,” says CCBSA Managing Director Velaphi Ratshefola. “Following the changes that happened over the last year, we see this conference as an important platform to address their concerns, propose solutions and lay out the broader CCBSA strategy and the critical role they will play in helping us realise our ambitious growth prospects.”

The LDP programme is part of the CCBSA route to market strategy, enabling the company to reach its customers in the townships and rural areas, in line with its customer focused strategy, as it navigates the tumultuous trading environment. Since its launch in 2016, CCBSA has worked closely with the LDPs, ensuring smoother delivery and enhanced customer service, while creating much needed opportunities for entrepreneurs in townships and rural areas.

CCBSA’s operations are divided into four regions, which are Coastal (Parts of Western Cape, Eastern Cape and KwaZulu-Natal), Inland (Free State, Northern Cape and North-West), North Region (Limpopo, North-West, Pretoria and Mpumalanga) and Gauteng (Central Gauteng, Johannesburg Metro, Centurion, Ekurhuleni Metro, Westrand and Midrand).

“The business context in which we operate has changed dramatically, particularly over the past year. The impact of the Covid-19 pandemic set our business back by in terms of revenue, profitability, and earnings and we have had to think about how to capture market share, grow our business, while we also support our partners and communities where we are located”, added Ratshefola.

In 2020, CCBSA consolidated its LDP network from 134 partners, many of whom were struggling with declining unprofitable volumes, down to 71 partners who displayed potential for volume growth in their respective regions around the country. Of these remaining businesses, 92% are black-owned,18% are black female owned and 8% are owned by youth under the age of 35. Of the 2600 employees that these operations employ, 4% are women, which CCBSA hopes to improve on in coming years.

“At CCBSA, 44% of all our leadership is made up of women, which we hope to increase to 50% by the end of 2021,” says CCBSA Commercial Director Rakesh Rajbally. “As we seek to transform our operations, we want to see similar progress in our supply chain and we are appealing to all our LDPs to appoint women where vacancies arise, and those who retire to reach out to women in their families to take over the business through our legacy programme that seeks to keep businesses within families.’

Changes in market conditions and the pandemic have negatively affected certain regions, leading to a decline in volumes and the need to restructure the network.

Over the past year, the North, Inland and Coastal Regions were the strongest performing. However, the Gauteng Region struggled to recover due to the pandemic and the area’s higher exposure to customers with on-premises consumption, many of which were adversely affected by social distancing measures and the severe restrictions of liquor sales.

Despite the economic crisis of the past year, Rajbally reported that in the first five months of 2021, overall LDP volumes had shown strong recovery, surpassing targets, and indicating a sustainable return to trading growth. With the consolidation to a fewer LDPs, the average earnings per operator has nearly doubled, driven by a corresponding doubling in average cases and customers per LDP.

To address some of these issues, CCBSA indicated that it will work closely continent-wide AFRICA WINS Strategy would seek to address these issues and deliver long-term sustainable growth.

The conference delegates discussed how to deal with challenges real time, including enhancement of engagement processes between sales teams and LDPs, and significant investments into technology, particularly a new business-to-business platform that will allow customers to make direct orders with LDPs.

“Despite adverse market conditions, overall performance has been improving,” says Rajbally “Where we see gaps, we will take the opportunity to engage directly with LDPs and develop meaningful interventions to ensure performance improvements.

“As CCBSA explores new growth areas, we want to ensure that our LDPs are motivated and inspired to embark on this very exciting journey with us,” he says.

The Lekgotla was capped off with a prize giving ceremony in the evening, and announcement of the best performing LDPs in the various regions.

END

About CCBSA

Coca-Cola Beverages South Africa (CCBSA) is a proudly South African company which began operating as a legal entity in July 2016, after the merger of six non-alcoholic ready to drink bottling operations. We employ over 7000 people at 13 manufacturing facilities across the country. As a subsidiary of Coca-Cola Beverages Africa (CCBA) and a bottler for The Coca-Cola Company, our vision is to refresh Africa every day and make our continent a better place for all. We manufacture and distribute Coca-Cola beverages that make life’s everyday moments more enjoyable, while doing business the right way. The result is shared opportunity for our customers, our employees, our communities, and our shareholders. We conduct our business ethically, transparently and conscientiously. We espouse an inclusive business culture to reflect our African identity. We accelerate sustainable, profitable revenue growth across all categories and offer an innovative portfolio of products that respond to customer needs and consumer preferences. Profitability is important, but not at any cost. People matter. Our planet matters. We do business the right way by following our values and partnering for solutions that benefit us all.

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