Coke: On Doing Well by Doing Good

Posted by: Steve Hamm on May 13

Muhtar Kent, CEO of The Coca-Cola Co., is a strong proponent of leveraging core business activities to foster growth and development, especially in emerging markets. A key example of his commitment to this way of doing business is Coca-Cola’s Manual Distribution Center program in Africa. Starting in East Africa, Coca-Cola has begun distributing its products in hard-to-reach places via a network of small local businesses. So far, it has created over 2,500 MDCs in Africa employing over 12,000 people and generating over $500 million in annual revenues.

To see if the programs were working well for Coca-Cola and the African communities in which its operating, and for guidance on how to scale up the program, the company commissioned a review by Corporate Social Responsibility Initiative at the Harvard Kennedy School and the International Finance Corporation. The review, made public today, studies programs in Dar es Salaam, Tanzania, and Addis Ababa, Ethiopia. The study is available at this Harvard site.

The researchers made a number of recommendations, including improving the distributors’ access to finance and providing expanded business-skills training. Coke says it’s working with potential partners to enhance the program.

This is the kind of corporate program that can have a huge impact on struggling economies and, over time, create vast new markets for products and services. It’s a great example of how some corporations are shifting their CSR strategies. Rather than spreading money around to good causes, which may or may not have a lot of impact, they’re doing what they do best: business.

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Reader Comments

Simon Berry

May 17, 2009 02:15 PM

Even more significant than this is that on 25/4/09, Coca-Cola announced that they were going to trial the ColaLife idea as part of this work:
http://is.gd/AKHK
This is truly innovative. I am surpised Muhtar didn't mention this.
Simon

Samantha Bonnar

May 18, 2009 07:00 AM

As well as giving new job and business oppotunities it also has a great scope for reaching more isolated communities and providing education and much needed ’social products’ such as oral rehydration salts and high-dose vitamin A tablets. ColaLife is a fantasic organisation that are presently in talks with The Coca-Cola Co., to do this http://www.colalife.org/

Gerren Hobby

May 18, 2009 10:49 PM

This is an interesting article. I agree that the business success of large companies can be a powerful agent to promote the common good. It is far more logical for companies to incorporate higher degrees of social responsibility into their business models rather than to blindly give money to various charities. I am hopeful about the degree of social responsibility that will be incorporated into every company in 20 years, not just those that target to niche markets. I think that one thing companies should consider during the transition to a higher degree of social responsibility is the amount of brand loyalty that is could be created in the process. Soft drinks are in a category that most perceive as morally neutral. What would happen if the beverage that fell from the vending machine caused one to feel as though they had "refined tastes for humanity" just as those who drink fine wines have a refined palate and culture? How many more times would that brand of soft drink be purchased? What if the purchase of a soft drink saved the lives of children in Africa? It is very possible that it could create that same feeling. A movement by ColaLife proposes the utilization of the supply chain of Coca-Cola in the developing world for this very purpose. It is an example of a perfect incorporation of non-profits and companies, one which I believe could result in benefits for the health of children and Coca-Cola. The website for this can be found at http://colalife.org/ It is worth looking at.

Mike Reed

May 22, 2009 06:05 AM

Just wanted to add a voice to the support here for ColaLife. It seems one of the simplest and most practical ways for a major corporation to do some very serious good in the world. All power to it! (For links see previous comments.)

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Innovation is happening everywhere these days. Companies operate without borders to find the best talent and the best ideas wherever they may be. Meanwhile, new business models are arising that just might make it possible to turn large swaths of this contentious world into something approximating a true global village. Tune in for Senior Writer Steve Hamm's dispatches from the intersection of globalization, innovation, and leadership.

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