Coca-Cola and Pepsi's worldwide dominance of the soft drinks industry relies on an efficient and reliable global supply network. While Coke has been busy awarding its best suppliers, Pepsi has been looking at opportunities that are emerging in post-Saddam Iraq.
PepsiCo International's franchise agreement authorises local bottler Baghdad Soft Drinks Company to produce and distribute PepsiCo's Pepsi-Cola, Seven-Up and Mirinda soft drink brands in an area that includes about 40 per cent of the country's 26 million-plus population.
Pepsi believes the move will help restore a degree of economic stability in the country. The agreement is expected to create some 2,000 new jobs at Baghdad Soft Drinks Company over the next several years, as well as new economic growth opportunities for retailers, distributors and suppliers in the region.
The history of Pepsi-Cola in Iraq goes back to 1950, when the brand was launched. Pepsi grew to become Iraq's leading soft drink brand, and Iraq became one of PepsiCo's largest beverage markets in the Middle East.
A major factor in that success was Baghdad Soft Drinks Company, which became a Pepsi franchisee in 1984. However, that relationship ended in 1990, when PepsiCo ceased doing business in Iraq after US and international trade sanctions barred trade with the country. The sanctions were lifted in May 2003.
As part of the relaunch of the PepsiCo brands, Baghdad Soft Drinks Company will offer new bottle designs with contemporary graphics as well as extensive marketing support.
"Iraqis have been great supporters of Pepsi over many years, and we're delighted to resume local production," said Saad Abdul-Latif, president of the Middle East/Africa region of PepsiCo International. "We're very fortunate to again be working in partnership with Baghdad Soft Drinks Company, which has the experience, infrastructure and local knowledge to effectively serve the needs of Iraqi consumers."
Baghdad Soft Drinks Company managing director Hamid Jassim said: "As a company that has worked through very difficult circumstances in recent years, we are very excited at the chance to once again bring Pepsi products to the marketplace. We fully expect that in time the Pepsi brands will be even more popular among Iraqis than they have been in the past, particularly as prospects for stability and economic growth improve."
The products will be available in the first half of 2004.
Meanwhile, a subsidiary of Pepsi 's main rival, Coca-Cola North America, has named Graphic Packaging International its supplier of the year. The award was presented last month by Katie Bayne, senior vice president of integrated marketing at Coca-Cola North America.
"Graphic Packaging's efforts in the areas of communication, innovation, management and trademark stewardship make them worthy of special recognition," said Bayne. "Graphic Packaging International has distinguished itself with its performance in project management, process management, product quality, technology/technical services and on-time delivery."
Graphic Packaging marketing manager Rico Francis said: "It is an honour to be selected as the first recipient in the pilot supplier of the year programme, and we look forward to building our partnership with Coca-Cola and helping them achieve success in the marketplace."
Graphic Packaging provides cartons and machinery to package cans and plastic and glass bottles for Coca-Cola brands worldwide. Coca-Cola is of course the world's largest beverage company, with a massive global distribution system. Coke products are consumed in more than 200 countries.