Q&A: Coca-Cola Beverages South Africa

Velaphi Ratshefola, MD of Coca-Cola Beverages South Africa on the company’s key transformation strategy and how it is empowering SMEs

Q&A: Coca-Cola Beverages South Africa

Q: What is Coca-Cola Beverages South Africa’s (CCBSA) enterprise and supplier development philosophy?
A: The CCBSA enterprise and supplier development strategy is integrated into the organisation’s business model and seeks to immerse SMEs in CCBSA’s main supply chain – suppliers, distributors and retailers. The vision is to empower communities by developing entrepreneurs in areas where we are doing business, and to create jobs.

An important element in assisting entrepreneurs, particularly those in our value chain, is to design programmes that can be integrated into our business strategy. When we develop outlets, we consider that although they might be selling specific products, they are part of our distribution strategy and not simply recipients of social investment. Ultimately these are entrepreneurs that assist us to run our national operations better.

Another vital element is that we target interventions that focus on the most vulnerable people in our society – those living in rural areas and townships, more specifically the youth and women.

Q: What are the challenges women and the youth face in driving their ability to be entrepreneurs?
A: Entrepreneurs generally struggle in the initial stages of starting a business. It is not an anomaly. A lot of patience, resilience and belief not only in oneself but in the ‘idea’ is critical when starting a business. And we have pockets of excellence in this regard.

Once the building blocks are in place, a business can thrive. But women and the youth generally struggle to access funding, support, coaching and mentorship and, most important, markets for their businesses. This is where companies can play a critical role in enabling the growth and sustainability of their entities.

Earlier this year we announced a R100 million supplier development fund to support small entrepreneurs and help build their capacity to ensure their ventures succeed. This fund assists young, upcoming black entrepreneurs in our value chain to build their businesses and access more opportunities to take their businesses to the next level.

Q: What types of businesses are trending among women and the youth?
A: Likely as a result of where we are as an economy, retail business is the most popular because it is easy to understand, and people don’t need large amounts of start-up capital. A car wash, for example, needs a lot of space and a fair amount of upfront investment, depending on the technological infrastructure – and location. But this is where partnerships with municipalities are critical in driving youth entrepreneurship.

In retail, only a small space is required to house inventory, and this could easily be a storage container. In most cases, we partner closely with municipalities whose strategic focus matches ours and that of the country. We provide the initial capital outlay and they provide space and other support for container spaza shops.

Q: What base programmes drive the CCBSA entrepreneurship imperative?
A: Specifically, and in consideration of the country’s socio-economic challenges, CCBSA takes the stance that community development initiatives must be aligned to the government strategic objective of youth and women empowerment. Furthermore, these must be integrated in our value chain and business objectives. We’ve responded by developing a youth-empowerment programme that includes Bizniz in a Box, specifically targeting youth and women entrepreneurs. This concept creates an ecosystem of viable micro-businesses that, through a spaza shop anchor, offers complementary products and services in a community.

Grow My Business is another CCBSA programme that focuses on retail development, providing smaller business owners with training that will help them improve the sustainability of their outlets in local and traditional markets.

We are also substantially invested in developing small businesses in the agriculture and agro-processing sector through the CCBSA Mintirho Foundation. This programme aims to support and integrate emerging black farmers into our value chain.

Q: What are the key elements of Bizniz in a Box?
A: Bizniz in a Box aims to stimulate sustainable development and growth of township and rural economies. It promotes the development of businesses owned and run by self-driven young people, providing them with a point of access to the mainstream economy – not as job seekers but as job creators.

The programme combines the theory and practical training for young entrepreneurs to successfully own and operate start-up spaza container stores. Candidates go through a rigorous selection and training process that includes a two-month bootcamp, combining theoretical training and practical experience in running a spaza store. Thereafter they must use their own initiative to promote their shop within the community using direct marketing, promotions and other tools. Once the two-month immersion process is complete, fully stocked containers are handed over to successful entrepreneurs who meet predetermined performance criteria.

Those who are successful are required to repay a portion of the start-up funding and take ownership of the store. A number of graduates have since expanded their businesses to include services such as a car wash and selling food.

Q: What programmes are specific to females?
A: We have ensured that we encourage and include women in our Owner-Driver and Local Distribution Partners (LDP) programmes, which are integral to our route-to-market strategy and getting our products to our customers (retailers).

Over the past year, we invested R2.35 billion supporting 567 black-owned suppliers, more than half of whom are black female-owned suppliers. It’s working well as not only have we assisted in the creation of a more inclusive economy, but we have also helped to create a supportive environment where these small businesses can flourish, and more young women can be empowered.

It is encouraging that 57% of the employees of these beneficiaries are rural black women. This is important not only because rural women are most in need of help, but because women are the ones who invest in their families and communities.

This, in turn, creates a positive ripple effect because empowered women are catalysts for socio-economic transformation. Seeing such progress propels us forward and inspires us to do more. It is pleasing to know we are able to move the bar and empower women in various parts of the world. It is also a nudge to do more and better. When you empower or educate a woman, you empower the entire community.

Q: How do you judge the success of such programmes?
A: The retention of these businesses in our value chain, their continued success and growth of their businesses proves that we are doing something right. The turnout at our annual events – such as the annual Supplier Development conference, as well as the LDP and Owner-Driver lekgotlas, to mention a few – are a measure of the growing interest in our programmes.

Q: How many entrepreneurs have these programmes created?
A: Bizniz in a Box has successfully created 92 entrepreneurs, 12 of them being female. A target of 150 outlets is expected to be rolled out by December 2019. The Grow My Business retail development programme has this year to date trained 4 746 outlets, of which 2 547 are run by female retailers.

Q: How large is the investment into entrepreneurship?
A: As mentioned, the introduction last year of a preferential procurement transformation strategy shifts a large portion of our procurement spend to black-owned and black women-owned suppliers over three years. However, this strategy is also focused on elevating the inclusion of active SME supplier development.

In 2018 we spent more than R120 million on LDP supplier development and R45 million on LDP enterprise development, as well as R678 million on preferential procurement for 150 businesses. More than R400 million has been spent on 494 owner-drivers, 14 of whom are female.

In total we have invested R2.1 billion into black-owned companies, R672 million of which has been directed at women-owned businesses and R1.9 million at SMEs.

Q: How should private business view the support of entrepreneurship?
A: Big businesses and governments all over the world have always supported small businesses, and SA is no exception. We must be deliberate about this agenda and our commitments. It is not enough to lament the importance of this and continue with business as usual. The growth of our economy is reliant on people being able to afford goods and services, and this means they must have jobs or their own businesses to sustain.

Support shouldn’t just be about ticking a box; it must be meaningful to individuals and communities, as well as those providing the assistance, so that all activities in the chain are sustainable over the long term.

Given a lack of job opportunities currently and the uncertainty of financial stability, small-business owners realise the importance of retaining their current clientele through the provision of exceptional customer service and ensuring satisfactory profits. Hence our commitment in ensuring continued support.

At CCBSA our key transformation strategy is all-encompassing and directed at assisting entrepreneurs, ensuring our staff complement is demographically representative of race and gender, and inclusive of people with disabilities, and that the latter receive the requisite training and development to realise their career aspirations.

Our community efforts speak to government’s development agenda and so we will continue to create shared opportunity in the communities where we operate.

By Kerry Dimmer
Image: Clinton Prins