Creative business involvement in social and economic development
Upon celebrating its 15th successful year in Palestine, the National Beverage Company pays homage to its customer-focused strategies and the valuable contribution it makes to national economic and social development.
In 1998, the National Beverage Company (NBC) obtained a license to produce Coca-Cola products in Palestine ‘proudly produced by Palestinians’. NBC, which started as a small business franchise with 47 employees, now employs over 370 people across its three plants and four branches located in the West Bank and Gaza Strip. Its sales volume has grown fivefold since it started its operations, with a market value now exceeding $120 million. The company is the fifth largest investor in the country, according to a Harvard University study published in 2010, which focused on the beverage sector in Palestine.
During the past fifteen years NBC has introduced several new brands onto the local market in response to consumers’ needs and tastes. In 2008, NBC was the first company in the Middle East to introduce Coke Zero to its market, and during 2013 the company introduced two new flavours under its Cappy brand of juices – Cappy Lemon Mint and Cappy Diet Orange – in line with consumer preferences.
Since its inception, NBC’s top management have set out to develop and maintain a strategic fit with the marketing context in Palestine, which is characterised by a small economy burdened by a prolonged occupation and restrictive security measures including restrictions on the movement of people and goods, security checkpoints, border controls and closures. The nascent government was faced with the twin challenge of launching the economy on a path of sustained development and providing an enabling environment for the private sector to thrive and contribute to economic growth and job creation – a rather daunting task which required close collaboration with the business sector, civil society and the public sector.
Doing good business in every sense of the word to make a difference
The Company’s activities and programmes were based on the premise that using its skills, resources and other assets to resolve pressing problems through joint initiatives would create a positive impact. This is a strategy that clearly stands apart from the mainstream approach with its main focus on philanthropic activities simply on the basis that the business should ‘give something back’.
Right from the outset, NBC was a leader in taking Corporate Social Responsibility (CSR) to the strategic level – taking the lead in framing the opportunities in the need to find solutions to problems namely, human development and poverty eradication. The company has partnered with various stakeholders in designing, implementing and measuring the impact of its programmes and projects in the sectors of youth education, sports, health and environment.
Like many large companies in the Middle East, NBC supports a variety of charitable activities meeting local humanitarian needs. Most importantly, the company has leveraged its core competencies to mobilise its people, products and money in supporting and strengthening the local community and local non-profit organisations.
It is a strategic alignment that aims at developing the community, as well as the company’s own long-term interests by supporting initiatives that build brand recognition, goodwill and develop local human capital. CSR is embedded in NBC’s mission statement “creating value and making a difference in our society”. Mr Imad Hindi, NBC General Manager, commented; ‘We view social responsibility in three key areas: our product, our society and our partnerships. Building partnerships with other organisations, governmental institutions or NGOs, would lead to a sustainable community and a prosperous economy’.
In the health sector, NBC has contributed to establishing libraries for children in public hospitals and providing the children’s library at Al-Makassed Islamic Charitable Society Hospital in Jerusalem with equipment and materials. In addition, the company equipped the hospital with medical instruments and supplies. Augusta Victoria Hospital’s department for blood diseases and bone marrow transplants, which is the only available facility of its kind in Palestine, was also rehabilitated and re-designed, thanks to NBC funding so as to meet international health standards. NBC also links training programmes for undergraduate university students to health development by encouraging and supporting youth projects aimed at meeting pertinent needs in the health sector. Under the education and training programme, ‘Ripples of Happiness’, hosted and managed by the regional Ramallah-based INJAZ NGO, NBC awarded prizes to the most innovative projects then helped turn them into sustainable projects. An award winning project that focused on the rehabilitation of Beit-Jala Children’s Hospital was implemented with NBC funds and resulted in sustainable and creative outcomes; the students created a club for generating new ideas and turning them into feasible community and social projects. NBC viewed this club as a vehicle for launching sustainable projects allocating resources to this effect.
In the education sector, NBC has built partnerships with the Ministry of Education, the business sector and several civil society organisations. A rich portfolio of projects has been created and nurtured by NBC including ‘Back to School’, School.com “Lana Al Ghad”, ‘We Are All Able’ and the aforementioned ‘Ripples of Happiness’.
‘Back to School’ is an NBC-funded project designed and implemented in partnership with the Ministry of Education. The project targets dozens of schools in remote and marginalised areas where school bags are distributed at the beginning of the school year to impoverished children and children with special needs. School labs were also equipped with modern computer tablets to enhance learning, in line with best-in-class practices in developed countries, through the School.com “Lana Al Ghad” project.
‘We Are All Able’ is a three-year project designed and executed in partnership with the Arab Bank and Siniora Foods. Under this project university student graduates compete to obtain post-graduate scholarships in the field of business. Students also participate in a national contest for the best projects that are evaluated and selected by a committee of Palestinian university academics following a set of criteria that are specified by the three partners.
‘Ripples of happiness’ is a training programme that is designed, implemented, evaluated and updated in partnership with INJAZ Palestine, a member of a regional network of NGOs for education and training that operates in sixteen Arab countries. The programme aims to equip school students, university undergraduates and technical and vocational school students with relevant skills for entrepreneurship and employment. NBC‘s drive to contribute to human development in Palestine was manifested through the partnerships created to this end. NBC was a founding partner of INJAZ and the first company to join its board of directors which is constituted by key players in the Palestinian business sector. Mrs. Randa Salameh, manager of INJAZ, affirms:
‘I consider NBC as an exemplar in the business sector of how CSR that is deeply embedded in a company’s strategies creates positive impact for both the company and society as a whole. NBC and INJAZ believe that well-trained and skilled young people will succeed as future leaders and entrepreneurs, contributing thereby to dynamic growth and job creation. NBC assigns qualified staff who volunteer to complete the ‘training of trainers’ at INJAZ, and subsequently assume the role of trainers in the programme’s different components. NBC is currently recruiting staff from the pool of trainees who have recently completed their training to fill vacant posts at the company’s branches. INJAZ also benefits from NBC’s in-kind contributions and the guided tours it organises for ‘Ripple of Happiness’ beneficiaries to NBC plants, where they are also given a comprehensive presentation of the company’s different functions and programmes.’
Mrs. Salameh spoke about an exemplary achievement by NBC with zeal:
‘NBC supported an exchange programme with Bilkent University of Turkey, providing moral support, guidance and follow-up. Ten students participated in this programme, which was jointly managed and supervised by NBC and INJAZ. One of the brilliant students taking part obtained a scholarship from Bilkent University to complete his post-graduate studies and was subsequently recruited by Microsoft Turkey. NBC General Manager, Mr. Imad Hindi, keeps in touch with this student and considers his success a true reflection of NBC’s mission of continuous investment in human capital.’
In the environmental sector, NBC ensures that its manufacturing operations and waste management are environmentally friendly and has obtained the ISO environmental quality certificate.
The company supports sports education at the elementary school level to help children integrate sports activities into their daily lives at an early age. NBC established the first basketball coaching school for juniors, in co-operation with Ramallah Orthodox Club. In 2010, the company sponsored the special football school of Al-Bireh Youth Society and the junior team of Nablus Ittihad Club. Among the sports teams that were supported with NBC funding, and who have won several local and regional tournaments, are the Ramallah Group women’s football team and De La Salle men’s basketball team in East Jerusalem. Support for women’s sports teams is a clear affirmation by NBC of the right of women to play sport and NBC’s incorporation of gender issues into its policies. The company also provides equal training and employment opportunities for women, fully acknowledging their vital role in economic growth and development.
The successful alignment of dynamic business interests and general societal interests creates the best of outcomes for NBC
NBC demonstrates its CSR commitment and orientation through an enlightened approach to decision-making that skillfully manages its programmes in a way that contributes to sustained economic development. Making profits was perceived by top management as an imperative that the Palestinian community citizens would benefit from – in terms of the wealth that the company would create through its products, leading to jobs in the community, transfer of know-how, technology and best practices from compliance with international quality standards in various domains. NBC obtained international quality certifications; environmental, production and health and safety quality certificates including ISO 9001:2008, ISO14001:2004, FSSC2200:2010 and OHSAS18001:2007. Currently the company is number one in the Middle East in terms of quality and sales execution.
In 2012, the National Beverage Company Coca-Cola/Cappy won the Group President’s Sustainability Awards for the year 2011 in the Eurasia and Africa Group Best Country Bottling Operation out of over 100 bottling companies affiliated with The Coca-Cola Company. In the same year the Coca-Cola plant was selected as Best plant to implement environment standards into its operations for the year 2011. In 1999, 2000 and 2001, NBC received the Golden Quality Award from the Coca-Cola Company, achieving the highest levels of quality of its products. In 2013, NBC was selected as one of the ten best Coca-Cola Bottlers for 2012 in Eurasia and Africa Group (EAG) as part of the Group President Sustainability Awards 2012.
NBC has won international awards that reflect its distinct quality differentiation and shows how Palestinian customers trust its products.
Creative management of the supply chain under adverse conditions to achieve regional development
The Company built manufacturing plants in Palestine located in the northern and southern parts of the West Bank. This enabled the development of distribution channels that made its brands widely available to all Palestinian consumers. The company’s brand name strategy was inspired by the Palestinian culture, with Palestinian names being given to its brands to reflect its being part of the Palestinian social fabric.
In 2005, NBC took over the Cappy plant in Tulkarm to manufacture Cappy Juices in different flavours, in addition to the mineral water under the ‘Arwa’ brand name. At the beginning of 2006, the company acquired Jericho plant, in Jericho city, to bottle mineral water under the ‘Jericho’ brand name.
NBC is clever in its ability to get around ‘supply chain obstacles’ with the aim of achieving its strategic vision for 2020 by establishing its fourth plant in Gaza Strip. NBC believes in enhancing Palestinian local products, and therefore sources local suppliers whenever possible. In the past few years, with over 600 Israeli roadblocks and checkpoints in the Occupied West Bank to cope with, shipments are often delayed, prompting ad hoc decisions. Spare parts can sometimes spend a year in the airport due to ‘security reasons’, while the same parts imported by an Israeli are cleared within 24 hours. The National Beverage Company prides itself in having what it believes is ‘the most flexible supply chain system in the region’, relying on creativity and determination to work its way through the daily ordeals of business. Due to the restrictive nature of the Israeli occupation, the company has adopted the satellite depot concept during the last few years. If a barrier restricts an area, operations would temporarily resume through accessible areas.
Through sustainable business practices, NBC has managed to overcome even the most challenging logistical hurdles.
It is evident that NBC’s CSR strategies, policies and practices are closely related to the Palestinian wider society in ways that are beneficial to both the company and its social constituents. CSR permeates its strategies, activities and its various functional plans, presenting a case in point of how a company can successfully deal with the multi-dimensional nature of CSR by addressing socio-economic, environmental and gender concerns in Palestine through high involvement with various stakeholders.