IN­TER­VIEW Imad Ben­moussa, di­rec­tor for Egypt and North Africa, Coca-cola

The Africa Report - - CONTENTS - In­ter­view by Julien Wag­ner for Je­une Afrique

Coca-cola is chas­ing the youth mar­ket in North Africa through di­ver­si­fy­ing its drinks of­fer and cre­ative think­ing on points of sale

Co c a - Col a’s Nor t h African head­quar­ters, in a char­ac­ter­less build­ing 30 min­utes’ drive from down­town Casablanca, hardly match the im­age of the ‘best known brand in the world’. The mar­ket­ing cham­pion, whose global head­quar­ters in At­lanta is a land­mark in the US, does not have the same dom­i­nant po­si­tion here. That is es­pe­cially the case in Egypt and Su­dan, where its arch-ri­val Pepsi gives it a hard time. Lo­cal brands are also pro­vid­ing fierce com­pe­ti­tion in the high-growth mar­ket, par­tic­u­larly in Algeria. Morocco’s Imad Ben­moussa, who be­came di­rec­tor for Egypt and North Africa in Fe­bru­ary 2017, drinks, talks and lives Coca-cola. He pre­vi­ously headed Coke’s French and Mid­dle Eastern oper­a­tions. Be­tween two gulps of soda, he tells how he plans to im­prove the avail­abil­ity of Coke’s prod­ucts and strengthen its mar­ket­ing in North Africa, which is home to more than 700,000 points of sale.

TAR: You have been in charge of North Africa since Fe­bru­ary 2017. How does Coke see this part of the world?

IMAD BEN­MOUSSA: It is a very dy­namic re­gion of about 250 mil­lion con­sumers, how­ever, the con­sump­tion of store-bought drinks per capita is weak. Ac­cord­ing to our cal­cu­la­tions, the growth in value for the non-al­co­holic drinks sec­tor will be be­tween 5% and 6% in the next few years, com­pared with 1-2% in Europe and North Amer­ica. This strong po­ten­tial is due to eco­nomic growth, ris­ing buy­ing power, ur­ban­i­sa­tion and the fact that the sec­tor is poorly di­ver­si­fied. Fizzy drinks ac­count for 40% of the mar­ket, wa­ter 3540% and juice 15-20%. That leaves room for in­no­va­tions like readyto-con­sume tea and cof­fee and also for energy drinks.

Which coun­tries have the most po­ten­tial?

Egypt, Algeria and Morocco, due to the size of their pop­u­la­tions and the struc­ture of their mar­kets. Is Coke crush­ing the com­pe­ti­tion? In the fizzy-drinks mar­ket, which is what we fo­cus on, we are by far the leader in Morocco and Tu­nisia. But in Algeria, where there is more com­pe­ti­tion – with more than 400 dif­fer­ent op­er­a­tors – our mar­ket share is less than 50%. In Egypt, as well as the two Su­dans, we are chal­lengers. But com­pe­ti­tion is good: it al­lows us to mea­sure our­selves and pushes us to in­no­vate, which se­duces our core mar­ket – young adults and teenagers.

What are your in­vest­ment plans?

Along­side our bot­tlers, we are plan­ning about $500m in in­dus­trial, com­mer­cial and mar­ket­ing in­vest­ment over the next three years. Glob­ally, that is $200m in the Maghreb and $300m in Libya, Egypt and the two Su­dans. In some coun­tries in the re­gion, 40% of con­sumers said in a sur­vey that they had not had a Coca-cola in the 30 days prior. Our top goal is thus to pen­e­trate our mar­kets more. What is im­por­tant is not that those who drink Coke drink

more, but that those who do not drink Coke get to know us. Avail­abil­ity is fun­da­men­tal to this. We sell ‘en­joy­ment’ prod­ucts that are driven by an im­pulse. If it is not sat­is­fied in half an hour, it can dis­ap­pear or be sat­is­fied by an­other prod­uct. We, at the same time, have to be sure that we are as­so­ci­ated with some­thing pos­i­tive and have to be there each time a con­sumer wants to see us. That is why we set goals each year for the num­ber of new points of sale. You have to be cre­ative and adapt to dif­fer­ent re­gions. In Morocco, for ex­am­ple, we had the idea to of­fer lit­tle re­frig­er­a­tors to dried-fruit sell­ers, who are nu­mer­ous out there on the streets, which helped us to im­prove our pen­e­tra­tion rate.

Coca-cola is fo­cused on mar­ket­ing. How much do you spend on ad­ver­tis­ing?

That is very sen­si­tive in­for­ma­tion. Our mar­ket­ing in­vest­ment in each coun­try de­pends first on our brand port­fo­lio. In Morocco, for ex­am­ple, we have seven fizzy­drink brands, two juice brands and one for wa­ter. In Algeria we only have four fizzy-drinks brands. An­other vari­able that in­flu­ences our spend­ing is the in­ten­sity of com­pe­ti­tion [in each coun­try].

Where are you on the wa­ter mar­ket?

There are two mar­kets where this is a size­able busi­ness for us: Su­dan, where we are the leader with our Safia brand; and Egypt, were we are chal­lengers with our Dasani brand – in a mar­ket that is rapidly grow­ing. On the other hand, our pres­ence is very weak in the Maghreb. We have the Ciel brand in Morocco, which has a tiny mar­ket share, and noth­ing in Algeria and Tu­nisia. But we are in­ter­ested in the mar­ket seg­ment be­cause the mar­ket for wa­ter is grow­ing faster than the mar­ket for fizzy drinks and juice in North Africa and the rest of Africa.

Are you plan­ning on launch­ing a brand of wa­ter in Algeria?

For the mo­ment, we are fo­cus­ing on fizzy drinks be­cause we still have a long way to go in terms of mar­ket share. But we are lis­ten­ing to the mar­ket. In our di­ver­si­fi­ca­tion strat­egy, we are al­ways de­bat­ing whether to ac­quire a brand or to start our own. In Su­dan with Safia, in Egypt with Dasani and in Morocco with Ciel, we went with the sec­ond op­tion be­cause we did not find an ac­qui­si­tion tar­get that met our cri­te­ria.

How many bot­tlers do you work with in the re­gion?

We work with eight bot­tlers. The big­gest one is our part­ner Co­caCola Bot­tling Com­pany of Egypt (CCBCE), as the coun­try is the big­gest mar­ket. The sec­ond-largest is Equa­to­rial Coca-cola Bot­tling Com­pany( EC CBC ), which cov­ers some parts of Algeria, Morocco and Mau­ri­ta­nia. And the third is Brasseries et Glacières In­ter­na­tionales, which cov­ers Tu­nisia and part of Algeria. We also work with in­de­pen­dent bot­tlers: two in Morocco (SBGS and ABC), one in Libya (GBC) and an­other in Su­dan (DAL). We have mi­nor­ity stakes in CCBCE and ECCBC.

What do you get from these share­hold­ings?

“The mar­ket for wa­ter is grow­ing faster than that of fizzy drinks in Africa”

It is not un­com­mon for us to con­trol a mi­nor­ity stake in the big­gest re­gional bot­tlers. It is of­ten for his­tor­i­cal rea­sons. At the begin­ning, the Egyp­tian bot­tler be­longed to the gov­ern­ment. Sev­eral years ago, we de­cided to take a stake and we have not ques­tioned that in­vest­ment since then. As for ECCBC, the ma­jor­ity share­hold­ers were Span­ish and wanted to ex­pand into sub-sa­ha­ran Africa. They wanted Coca-cola to work with them on this ge­o­graph­i­cal ex­pan­sion. There are not global rea­sons for those de­ci­sions, just par­tic­u­lar ones. What is cer­tain is that we de­cided sev­eral years ago not to be the ma­jor­ity share­holder or the man­ager of our bot­tlers.

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