Coca Cola Beverage Sector in Belgium

Introduction

The job vacancy which I am about to apply is a sales representative job specifically for events, nightlife and sports for Coca Cola European Partners Company after I am graduated. Coca cola is already active in Belgium for almost 91 years and continues to invest in local production, distribution, sales and 18 brands. Coca-Cola European Partners states in “Welcome to Coca-Cola European Partners” (n.d.), that they are the world's largest independent bottler of Coca-Cola, that the Coca-Cola system employs more than 2500 people in Belgium and that they sell and distribute across thirteen countries the world’s most loved drinks brands to more than 300 million people. This report seeks to critically analyse the viewpoint of Human Resource Managers in the beverage sector in Belgium. The report will first give a short explanation for the chosen sector and company, followed by a detailed analysis on the current and future threats with solutions and opportunities faced by the HRM department in the abovementioned industry. Lastly, a conclusion will be given.

Industry Profile

The beverage industry is a subsector of the food sector. “Market Monitor Food Belgium 2016” (2016) contents that in Belgium, the beverage industry has grown over time and produces soft drinks, juices, syrups, milk, and squashes. However, the food sector has high energy and labour costs, the beverage sector itself is a profitable subsector due to the huge international demand and sport events helps to drive demand.

Company Profile

According to Coca-Cola European Partners facts of their company, “About us” (n.d.), they are the leader in one of the largest fast moving consumer good sectors in Europe’s most significant markets. As said by CCEP, “About us” (n.d.), they offer consumers some of the world’s leading brands and a wide choice of high quality drinks, with or without sugar and calories. Coca-Cola European Partners sells than 50 brands, has over 300 million consumers and has companies in thirteen countries throughout Europe where they employ 24.500 people.

History in Europe

According to Coca-Cola European Partners facts of their history in Europe, “Our heritage” (2017), France was the first Coca-Cola bottling company in Europe in 1919. Throughout time, Coca-Cola European Partners tried to adapt and respond to the market changes by giving creative solutions which increases the sales. Coca-Cola started a company in Belgium in 1927, which was the third company in Europe. During the Second World War, the first challenge was that they were running out of raw materials. They made ‘Fanta’ to solve the problem, since this drink needs other sources. When the war was over, they started the production of Coca-Cola again.

During the World’s Fair in Brussels, people got to know the company more and especially the taste of it, which increased the sales after de war. Due to the fact that people had a negative view on the quantity of sugar in the drinks, they invented Diet Coke, but launched in Europe as Coca-Cola Light. To gain more money to invest, the Coca-Cola Enterprises was formed and went on the New York Stock Exchange. The market became even bigger by selling in East Germany after the Berlin Wall came down. To face the fact that the company needed to become more efficient to deal with the higher sales, the Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group merged. As Coca-Cola could provide drinks on the Olympic Games in Barcelona, they invented Aquarius.

The Coca-Cola Enterprises became bigger by buying operations among other things in Belgium and France. Coca-Cola Zero was born, due to the fact that people still had a negative view on the Coca-Cola drinks. They became independent from North America. Even in Norway and Sweden they got a step in the market of bottling. Also in the South of Europe in Spain and Portugal they realised it by fusions of different bottlers and making a legal agreement so that the name Coca Cola could be used. Coca-Cola Life was launched in GB with a sugar reduction of almost the half. Coca-Cola, as people still had the feeling that Coca-Cola could perform better in the amount of sugar in the drinks. On May 28th 2016, Coca-Cola Enterprises, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke officially merged to become the world’s largest independent Coca-Cola bottler based on income.

History in Belgium

According to J. (2016), the company is already active in Belgium for more than 90 years. Belgium is important for Coca-Cola European partners due to the fact that the second biggest innovation is located in Anderlecht, in which they invested a lot over the last 3 years. In Belgium, Coca Cola sells in around 90 selling points, which is good for 10.5 million consumptions per day. Almost 3000 people are working in the company in Belgium, of which each job sustains 6 jobs in other sectors in transport, catering, suppliers and retail. As you can calculate yourself, this gives around 17.000 jobs in whole Belgium. Every year they support the Belgian economy by paying 1.6 milliard euros.

Vision, Mission and Values

HR presentation oc COCA COLA (2014) contents that HR managers show the vision that it is an attractive place to work, that Coca Cola is a positive brand which creates a change and keep in mind to ensure return for their stakeholders and investors. HR managers are also a part of the mission. The need to be optimistic and ensure the employees that they show that optimistic view throughout their brands and actions. HR managers need to value passion by showing that they are “committed in heart and mind”, not being fake and performing well in every task they finish.

Current and Future Challenges Facing the HRM department

Research by Ali (2015) supports that there is a lot of competition in the food and beverage industry. The HRM department of the company needs to find creative solutions to face the current and future challenges to compete in this highly competitive industry. Below a few threats are presented to which the HRM department of the Coca Cola European Partners needs to find solutions. Changing consumer preferences and the health impact of soft drinks: According to the annual report of the Coca-Cola European Partners, “Principal Risks and Uncertainties” (2016), the company distributes products unhealthy ingredients which are seen as negative. Because the product range cannot be changed fast enough, the HR department is responsible to educate the employees about the changes in consumer behaviours, how to quickly respond on it and they need to make the communication faster if the change is happening.

Legal and regulatory interventions The government regulates parts of the production, transportation and distribution of the Coca-Cola European company. It can mean a huge impact on the company, if there are changes in regulation. For example, higher taxes can influence the price they need to ask to the consumers. For this challenge, there are no solutions found which can be influenced by the HRM department. Cyber and social engineering attacks The company’s biggest treats are the potential attackers’ skills and tools which are changing every day. This can cause entrance to data, damage it and can result in damage of the company reputation, according to the annual report of the Coca-Cola European Partners, “Principal Risks and Uncertainties” (2016). Making the employees aware of what can happen by an attack and train the employees how to solve that problem is the only solution in relation with the HRM department to solve the cyber and social engineering attacks.

Market

Building strong customer relationships is the key factor to higher the prices. It is the task of the HR managers to train the employees to make them able to negotiate with the customers, so they can still sustain their relationship with them, even if the prices increase.

Product quality

Due to fact that safety requirements need to be followed and that there are so many different kinds of products, it is dangerous that they can miss one of the requirements which can damage their brand reputation. According to the annual report of the Coca-Cola European Partners, “Principal Risks and Uncertainties” (2016), the HR managers need raise awareness of the hygiene regimes and monitor the consumers to solve this problem.

Labour shortage

Strack explained in his presentation of “The workforce crisis of 2030” (n.d.), that labour shortage means that the labour demand is bigger than the labour supply. In the future, this gap will only increase because the baby boomers will retire in about 2030. So to face this challenge, Coca-Cola European Partners set up the goal to have at least 40% women in management and other leading functions in Belgium and Luxemburg by 2025. But not only women will fill the gap, also older people need to be attracted to stay in the company as long as possible by creating new norms on work hours for them, more training for technology and so on.

Opportunities facing the business Sustainability is the most important opportunity facing the Coca Cola European Partners. It is a huge opportunity for companies to stand out of the others. Coca-Cola European Partners tries to be as much sustainable as possible. According to Coca-Cola European Partners, “Sustainability awards” (2017), the company was for the second year in a row part of the Dow Jones Sustainable Index in Europe and in the World. This index is known all over the world of which every company wants to be part. Joe Franses, Vice-President of Sustainability (2017), says that almost 3500 companies were evaluated and Coca-Cola European Partners was one of the three beverage companies who reached the index last year. Of those three companies, they achieved the highest score. Joe Franses states that the company listens to their consumers and listens to leading health authorities, including the Worth Health Organisation, due to the fact that people want more natural ingredients in their drinks and less sugar. They not only listen to the customers, but also to the stakeholders. They asked them what they expect from the Coca-Cola European Partners. The feedback of the stakeholders was that the company was seen as a good business but want that the company develops their sustainable strategy to become a great company.

The company does not only want to reach this sustainability index, they also look further and understand that they have an impact on the environment and the societies in which they operate. Therefore, they want to improve the world for everybody by also finding solutions for climate change, lack of water, waste and pollution affect. Coca-Cola European Partners states in their “Action on Climate” (2016), that their goal is to reduce their carbon footprint and use 100% renewable energy. The company also wants to reduce the sugar in their drinks by 10% between 2015 and 2020, for the well-being of the consumers and because the production of sugar needs a lot of energy and water. All these actions are set out in their sustainability action plan, called ‘Forward’, which ensures a responsible and sustainable way to grow.

Conclusion

After reviewing the complete report one thing is clear that the strategies of the Coca Cola European Partners company are working very well even the company faces a lot of challenges. To overcome these challenges, the employees are playing a big role and they are also part of working out the further strategies. Further education of employees and quickly respond on the feedback they get from the sales managers will be important to cope with future situations. The atmosphere needs to stay attractive for older people as well, so they stay in the company until retirement age. This will also help to teach the young people the skills they need for the job. To keep people more motivated to keep longer on the work, they need to offer more sport facilities and promote to sport after work. Another future opportunity for the company is that they can enlarge and prepare their Human Resource Department to expand to the other European countries in the future. This preparation will include more culture awareness and preparing for a bigger amount of sales, which means more work for the employees.