Enhanced distribution model to create thousands of independent businesses and jobs in Africa

May 6, 2008

The Coca-Cola system is answering UK Prime Minister Gordon Brown's "Business Call to Action" to reduce poverty in the developing world by enhancing our Manual Distribution Centre (MDC) distribution model in Africa to help generate more jobs, promote entrepreneurship and strengthen local economies.

On May 6, Chairman and CEO Neville Isdell joined more than 80 other global business leaders, UN officials and African heads of state in London for a high-level dialogue on the role businesses can play in meeting the UN's Millennium Development Goals (MDGs). Prime Minister Brown and the United Nations Development Programme (UNDP) hosted the event, which showcased the pioneering work of more than a dozen companies including The Coca-Cola Company.

Our Company, which was selected as a best practice from dozens of companies, is working to enhance and expand our MDCs, one of the best-developed models for distributing our products and engaging with local communities in Africa. Approximately 1,800 of these independently-run, low-cost businesses directly employ 7,500 people and generate $500 million in annual revenues, primarily in high-density urban areas throughout east Africa.

The MDC distribution model is based on a network of local, independent businesses and a single "secret formula" -- that everybody who distributes or sells our beverages makes money. One job at Coke in Africa produces up to 16 local jobs throughout the value chain.

"I firmly believe that business can have a very positive role in achieving the Millenium Development Goals," Isdell said. "As part of the Call to Action, we at Coca-Cola will use the core of our operational expertise and the winning formula of our business success in Africa -- our distribution system based on independent local entrepreneurs -- to create more jobs, more prosperity, more entrepreneurship and skills and, ultimately, more sustainable communities."

Together with Coca-Cola Sabco, the Harvard CSR Initiative and the International Finance Corporation, The Coca-Cola Company will launch a pilot program in Tanzania to study how to enhance the model to create more jobs, provide additional skills training and drive entrepreneurship and prosperity in local communities.

Lessons learned in the pilot will be applied over the next three years in Coca-Cola's distribution network across Africa, with the goal of achieving the following by 2010:

  • Establishing between 1,300 and 2,000 new independent distribution businesses;
  • Creating between 5,300 and 8,400 new jobs; and
  • Generating between $320 million and $520 million in new revenue for local economies.

Over the next five years, the initiatives showcased during the May 6 event are expected to save almost half a million lives, create thousands of jobs and benefit millions of people across Africa and Asia. They are part of a concerted push to meet the MDGs that will enable the poor to access up-to-the-minute information, money and business expertise as well as creating new businesses and employment opportunities.

"This year must be a year of action if we are to tackle the development emergency we face," Prime Minister Brown said. "We know without an extraordinary effort we will fail, and to get the Millennium Development Goals back on track we will need everyone to play their part. Today's event is about enlisting the support and expertise of global business to develop new and innovative ways to spread growth, prosperity and opportunity in poor countries across the world."

What are the Millennium Development Goals and the Call to Action?

The Millennium Development Goals (MDGs) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The MDGs are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000.

The eight goals form a blueprint agreed to by all the world's countries and leading development institutions:

Goal 1: Eradicate extreme poverty and hunger
Goal 2: Achieve universal primary education
Goal 3: Promote gender equality and empower women
Goal 4: Reduce child mortality
Goal 5: Improve maternal health
Goal 6: Combat HIV/AIDS, malaria and other diseases
Goal 7: Ensure environmental sustainability
Goal 8: Develop a Global Partnership for Development

The MDG Call to Action was launched in July 2007 by UK Prime Minister Gordon Brown, speaking alongside UN Secretary-General Ban Ki-moon, with the support of 14 heads of state or governments and 21 private sector leaders, to encourage the international community to accelerate progress to reach the MDGs.