Fueled by strategic investments and sales momentum in the Middle East, The Coca-Cola Company has taken a leadership position in the Middle East and North Africa region, an area long dominated by competition. Since returning to Saudi Arabia in 1993, The Coca-Cola Company has invested more than $100 million in building a soft drink infrastructure there. This includes a state-of-the-art production facility in Jeddah, an expanded distribution network, and more than $60 million in cold drink equipment, including 60,000 Coca-Cola coolers. In 1997, the Company also introduced a single-serve plastic contour bottle dedicated to football fans, which is now one of the country's most popular single-serve packages.
Investments of more than $60 million have also been made in Jordan and Lebanon, where the Company acquired the local Coca-Cola bottling operations in 1997, installing new equipment and advanced product quality systems,and providing training for employees throughout the organization. In Egypt, the region's most populous country, the Company entered a joint venture in 1994 with a local partner,the MAC group. A total of more than $180 million has been invested in the country to-date, to enhance production, distribution and marketplace execution, such as the placement of 30,000 coolers in 1997. As a result, after many years of being number two, the Coca-Cola system in Egypt has become the country's leading soft drink producer, with close to 60 per cent share of sales. "Over the last few years, the Coca-Cola system has taken leadership in longstanding strongholds of our international competition - Russia, Eastern Europe and Venezuela," said Douglas N. Daft, president, Middle and Far East Group, The Coca-Cola Company. "We believe it is only a matter of time before we take the lead in every one of the individual countries of the Middle East and North Africa." The Middle East and North Africa region, spanning from Morocco in the west to Oman in the east, has benefited from a $400 million investment by the Coca-Cola system over the past five years, with a further $200 million infusion scheduled for the next three years. This investment has been used to build and upgrade production facilities, extend distribution networks, place sales equipment and pursue aggressive marketing programs. As a result, Coca-Cola products now represent 38 percent of total sales in the region as a whole. This is double the share of sales held just five years ago.
I've lived in Saudi since 1990. When I arrived here there were two types of cola beverages; Pepsi and a local poor quality brand. I was a regular consumer of Diet Pepsi (~6-8 cans/day<I don't drink tea or coffee>) and found its quality to vary. Sometimes it had too much of a lemon flavor in it, which gave it a disgusting taste. Other times it would not have enough cola flavor and tasted watered down. And finally, there were times that they would run out of stock of Diet Pepsi for 1-2 months! What I'm geeting at is their quality control and planning was terrible and they had no competition to entice them to improve.
Now let me tell you about KO. They arrived in 1993 in force. Their products were stocked plentifully everywhere. They put up new signs for local merchants with the Coca-Cola logo brandishing both sides of the store's name. They gave out free cans of KO beverages at the July 4th US Consulate party. The delivery trucks were modern, clean (you never see a dirty KO truck), and with refreshing signs of large KO bottles on the sides of them. The quality of the beverage is consistent. I am now a Diet Coke consumer and most of my friends have also swithed to KO products. I'll check with my local supermarket here and let you know how KO is doing against PEP. JRC
Thank You for giving us a real perspective and current History on whats going on in your base of operations concerning KO. As an Analyst I read reports on how KO is doing in the Middle East , but unless I go there myself and talk to people like yourself, I never get the real story. Your insight on the matter of KO in Saudi Arabia was most refreshing as it shows the power of KO and its attitude towards the competition. I believe that our KO family is benefited by representatives like yourself in the trenches. Keep up the good work and thank you again for you wonderful message.