Cover Story October 28, 2010, 5:00PM EST

Africa: Coke's Last Frontier

(page 5 of 5)

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Stan Honda/AFP/Getty Images

Not everyone on the local level appreciates Coca-Cola's aggressive tactics. Patricia Ndlovu, 45, saw her business dip after the Coke bottler decked out her general store-like tuck shop and tavern in red tablecloths and Coke signs. The bottler even installed a remote opener on the door of Ndlovu's drink cooler so the attendant, behind a small window, could open it when a customer rang a small chime. Some of the locals became jealous and stayed away, thinking she was being paid for tarting up the neighborhood. Things got worse when the Coke bottler painted a nearby wall red and the owner demanded payment from Coke. Coke repainted the wall white.

Mostly, though, Coke's plans work. In Kabira, a Nairobi slum the size of New York's Central Park, shop after shop along the densely populated main roads are Coke-red, like colored links in a chain. The local bottler hires an artist to paint the makeshift stores with logos and enticements like "Burudika na Coke Baridi," Swahili for "enjoy Coke cold."

Outside one of those shops, Ann Kimeu, 34, sips Sprite through a straw from a green glass bottle. A few blocks away, residents of the slum, which has no public water or sewer system, pay 3 shillings to fill used 20-liter cooking oil jugs with fresh water from a Coke-sponsored well. At a new bathroom Coke is helping to build in the poorest section of the slum, it will cost 2 shillings to use the toilet or the shower. Kimeu buys soft drinks as many as four times a week. It's not a treat. She's mostly just thirsty. A seamstress, Kimeu earns about 1,000 Kenya shillings ($12) a week when business is good. At 35 shillings a bottle, the soft drinks consume 14 percent or more of her income.

Morning breaks in Nairobi's Central Business District, and men in red Coca-Cola lab coats arrive at Rosinje Distributors as red trucks pull up from a local bottling plant. Rosinje is one of 3,000 Manual Distribution Centers that are the backbone of Coca-Cola's delivery system in places such as Kenya and a big part of the plan to get Coke into every alley. Ayub Onyango, 28, helps unload red plastic crates of soft drinks into three shipping containers, which serve as a warehouse. Slender, with a runner's physique, Onyango will stack up to 22 crates, about 40 pounds each when full, onto a two-wheeled trolley. He and 10 others then fan out on the broken and congested streets of Nairobi to deliver Coke, Fanta, and Stoney Ginger Beer to about 345 small shops and beverage kiosks. With no room for inventory, many shopkeepers order as little as a case a day, and, with the crowds and the poor roads, it's easier to deliver by hand.

Onyango's boss, Rosemary Njeri, herself peddled clanking crates of soda shop-to-shop as a stockist 12 years ago. The mother of three worked her way up to eventually own one of Nairobi Bottlers' largest Manual Distribution Centers, moving 20,000 to 25,000 cases a month.

The program helps the company beat Pepsi to remote customers as they develop the taste and the income for soda. Coke is also establishing Manual Distribution Centers like these in countries such as Vietnam and Thailand, where poor roads are also a challenge. In 2010, Kent is adding more than 1,200 such distribution centers in Africa. They currently employ more than 12,000 Africans and generate $500 million in annual revenue.

Coca-Cola teaches these mini-distributors everything about how to run a business—from things as simple as waiting until the midday rush before icing down the Cokes to save resources to how to buy a house with their newfound wealth.

Coke is working to bring Njeri's business into the 21st century. In August a small team from Nairobi Bottlers studied maps of Njeri's territory and evaluated hand-tabulated data to help construct new delivery routes. Up until now, Onyango and his fellow salesmen visited a handful of accounts in the morning before going back to the distribution center to load up and deliver. They repeated this several times a day until their route was done.

Now a specialized sales team has been walking accounts, sending orders in the afternoon by cell phone to laptop computers. That lets Onyango and his colleagues concentrate on deliveries, while the sales crew helps shop owners with marketing and inventory management. Njeri and the bottler also get more precise sales data, which are easier to mine for trends and places to cut costs. "My business is all about volume," says Njeri. "When I do volume, I get money in my pocket."

Back in Atlanta, not far from where Coke's phenomenal run began, it's lunchtime at Lenox Square, a shopping mall a short drive from Coca-Cola headquarters. Shoppers park their BMWs below glass office towers and a rooftop hotel pool. They buy perfume, silk ties, and Apple laptops. In the food court, they eat pita wraps and Japanese noodles. Here, the Coke system operates with peak efficiency. When customers ask for a soft drink with their combo meal, chosen from a red menu board, the clerk reaches into a red cooler and hands them a Coke. But the new money in Coke's pocket will be earned by Njeri.

Stanford is a reporter for Bloomberg News.

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