It is time to talk about sugary drinks including Coca Cola in Myanmar. I watched Coke enter Vietnam in the early nineties and start to kill people.
Soda Politics by Marion Nestle is a good place to start. Sugary drinks are bad for your health. They contribute to obesity, diabetes, and death. Coke says it does not market to children but that lie is obvious if you look at the photo that accompanies this article.
Jamie
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Coca-Cola rep talks sanctions, expansion and talent wars
Steve Gilmore
Myanmar Times
Wednesday, 24 February 2016
Coca-Cola's country manager Rehan Khan spoke to The Myanmar Times about the firm’s plans for expansion, navigating the US sanctions program and the “talent war” international firms are facing to recruit Myanmar’s best and brightest.
The company, which set up its first Myanmar production facility back in 2013, has its own education curriculum – Coca-Cola University – that helps the firm train staff across the globe, said Mr Khan on the sidelines of the American Chamber of Commerce Myanmar’s annual economic forum in Yangon.
“We talk a lot about human resources,” said Mr Khan when asked about the challenges Coca-Cola faces in Myanmar. “There is a lot of turnover in the organisation.”
New hires go through extensive training in sales and other areas through the virtual university, said Mr Khan. But even after the firm makes its investment in training Myanmar staff some people still leave, he added.
“There is a small talent pool and a bit of a talent war going on,” he said. “This is only going to intensify as more companies enter the market. Access to human resources is one big challenge for growth.”
But the firm is no stranger to new markets, and was able to draw on its earlier experience in regional countries like Vietnam before entering Myanmar. Losing staff after investing in their training “is probably the cost of doing business in a country that is rapidly evolving and changing”, said Mr Khan.
“What we also see, which is positive, is that sometimes people leave for an incremental [increase in] salary, but six months later they come back.”
Coca-Cola’s experience in “challenging environments” in other markets has also helped it work within a difficult US sanctions regime, Mr Khan said. US firms doing business in the country face onerous reporting requirements. But the impact on the business has been modest, he said.
“Yes there is admin work and reporting requirements,” he said. “Our responsible investment reports require a lot of effort. Every time you want to do business with someone you have to run them through the sanctions list.”
The firm also spends more time in Myanmar than in other markets auditing its suppliers and working on “supply guiding principles”, he added. But over the past two years the company has found a way to grow its business despite remaining US sanctions.
“You stick to your principles and [the] local rules and then you find a way to manage whatever challenges come on board,” he said.
In a responsible investment update published last year Coca-Cola confirmed that a director of the firm’s local partner Coca-Cola Pinya Beverages Myanmar was also a minority shareholder in a firm that operates jade mines – an industry sanctioned by the US government.
Global Witness brought the information to Coca-Cola’s attention. In response the firm said its due diligence conducted in 2013 was based on the “best information available at that time”, and that it was “confident that our investment is in compliance with applicable laws”.
Distribution infrastructure is another challenge. The firm’s manufacturing facility is in Yangon “and the country is huge”, Mr Khan said. “So making sure our products are available everywhere is a challenge we are still trying to overcome.”
Coca-Cola has plans that should help it over this hurdle. The firm intends to invest in manufacturing facilities in upper Myanmar, although this is a longer-term project and Mr Khan was unable to comment on timing.
“[Right now] we’re trying to do our best with the limitations we have,” he said. “But investment in infrastructure and better education, these are things that help not just us but any industry.”
Investment remains the name of the game for the company’s Myanmar operations, which have yet to become profitable. This is in line with the company’s expectations, that it would take “three to five years” to break even, Mr Khan said.
“It took us much longer [to break even] in Vietnam and Japan where we have wonderful businesses today,” he added. “So we know these things could go up or down depending on how things move. The idea is to move on a long-term bet.”
The priority remains getting Myanmar operations to a scale where they are profitable, although measuring success in Myanmar can be tricky.
“In a country without a lot of [industry] history and information available it’s difficult to put hard metrics [on success],” he said. The firm looks at its Myanmar operations more from a revenue perspective than in terms of market share, he added.
“You focus on execution efforts and then see whether these efforts give you X or Y,” he said. “We set up a range and we are well within that range.”
The firm will likely consider bringing in new products once it is profitable, although it is expanding its offerings in Myanmar.
The firm manufactures Coca-Cola, Coke Zero, Sprite, energy drink Burn, Max20 bottled water, Max+, Max Power, Schweppes and most recently Minute Maid Nutriboost – a combination of milk and juice. The latter product is not in many other countries, but has been very successful in Vietnam, said Mr Khan.
Weekly market research on Myanmar’s favourite Coca-Cola products, brand attributes and whether advertising campaigns are working also require extensive investment, he added, but so far the Myanmar journey has gone well.
“People tend to stay very positive here,” he said. “It’s a market where consumers, retailers, everyone wants to learn and absorb. They’re hungry, and if you provide training they welcome it.”
http://www.mmtimes.com/index.php/business/19151-coca-cola-rep-talks-sanctions-expansion-and-talent-wars.html
