Coca-Cola. It is a cultural icon of American life, and known the world over. It is #1 in the world in sparkling beverages, coffee drinks, and juice and juice drinks. It sells more than 3,500 different products in more than 200 countries and has 500 brands, 16 of which have annual sales in the billions of dollars.
Even with 127 years in business, a company does not become as large and globally successful as The Coca-Cola Company without considerable focus on quality and food safety.
But, as a discussion with top executives of Coca-Cola’s food safety and quality team came to show, many of those same practices and processes can be applied just as easily in, or provide best practices for, the average or even small, food or beverage processing plant.
This may be because it is a global business that operates on a local scale in communities where it does business; because of its policy of involvement and sharing of best practices; or its very small founding as a single-point soda-fountain drink (See Fun Facts, below). Or, perhaps, it has to do with the evolution of the food and beverage industry where customers such as Walmart are driving standards and holding all suppliers to the same requirements, regardless of their size. And successful companies, such as Coca-Cola, have learned to turn such a requirement into an advantage.
Globally Local. Coca-Cola is not a product that is produced in just a few huge facilities, and then shipped around the world. Rather, explained Global Director of Quality and Food Safety Neil Marshall, it is produced in virtually each country in which it is sold, utilizing local suppliers and local bottlers, employing local people, and addressing local culture and taste. As such, the supply chain of Coca-Cola is not a single corporate system. Rather, each link in the Coca-Cola production chain is a local producer with its own outward-extending chain of suppliers, similar to any other local food manufacturer. Of course, the plants have the advantage of being a part of a global network, but Coca-Cola has a strategy of mingling global and local.
|Vice President/Chief Quality, Safety and Sustainable Operations Officer Jos Wellekens (left) and Global Director of Quality and Food Safety Neil Marshall in front of the vault of the “secret ingredient.”
Operating on such a philosophy also enables the company to focus its products and practices to the local tastes, culture, and regulations. For example, as a corporation, The Coca-Cola Company sponsors a number of global events, such as the Olympics and soccer’s World Cup. The company develops a theme, TV advertising, Web support, etc., then “offers” it to each country, allowing individual changes and decisions to fit the local community.
The same philosophy is evident in a gastronomic journey around the world. A U.S. citizen stepping up to a Coke machine will find products such as Coke, Diet Coke, Sprite, Barq’s Root Beer, or even a Minute Maid or Nestea product. But travel to Africa, and that Coke machine will feature products such as Bibo, Spar-berry, Sunfill, or Stoney Tangawizi; or one could stop in India to sip a Thums Up or head to Japan for a Georgia coffee.
With the product wholly produced in each country in which it is sold, and an approach to “execute localized strategies developed in partnership with our company, Coke is a local business operating in each country,” Marshall said.
There are some aspects of the Coca-Cola system in which local control and decision-making is not quite as autonomous, however. Rather, for quality and food safety, Coca-Cola maintains much more rigid standards across its system to protect the brand, assure supply standards, and control the manufacturing process. “Coke has always been keen to maintain its good brand quality, so we lead food safety and supplier strategy from the center,” Marshall said.
For example, the production of Coca-Cola at a manufacturing facility is essentially the combining of four parts: the secret-formula concentrate, water, sweetener, and carbonization. With such few ingredients, a slight difference in any one, such as the water, could change the classic, expected taste and quality of the final product. Yet with water sourced locally at every plant, from a range of sources—well water to vastly varying municipal waters, it is essential that specific filtering and treatment processes be used so that the water that ends up in the final product is the same at every plant. If it’s not, the bottled, canned, or tapped Coke will not be the same.
And, even with such controls, Coca-Cola does not leave the quality of the final product to chance. Rather, it conducts at-trade sampling for assurance. Coca-Cola contracts with third parties to purchase its products from various retail establishments. The products are analyzed and tested for everything from taste to micro to label coding and alignment. The results are compiled every month, upon which each plant is scored and analyses are made for continuous improvement in that plant and across the system.
Such practices help Coca-Cola ensure that all products that bear its brand consistently meet its rigid quality and food safety standards—as well as those of downstream customers.
Quality and Safety Standards. Coca-Cola is a major supplier to large and small retailers around the world. But regardless of Coke’s size or leverage, it must adhere to customer standards as closely as a small, local producer. In fact, it was just such adherence that converted the company from a purely internal quality system to one driven by Global Food Safety Initiative (GFSI) certification.
Coca-Cola had had an in-depth, global quality system, but as major retailers, such as Walmart, began requiring suppliers to have external certification, the company took a look at its options and found that certification to a GFSI scheme as well as ISO standards would not only fulfill the customer requirements, but also could be an intricate aspect of a redeveloped Coca-Cola quality system that would ensure consistency around the world.
So Coca-Cola made the move to modify its internal operating requirements and align its quality system with external standards. The result was that, Marshall said, “We changed our philosophy, but not the content.”
The company created a new internal system of KORE operating requirements covering quality, food safety, environmental, and occupational safety and health policies, and began requiring GFSI certification of all it facilities. KORE (KO is its NYSE ticker symbol; RE for requirements) replaced The Coca-Cola Management System (TCCMS) in January 2010. As an integral part of the company’s 2020 Vision Plan—which has a 6-P focus: profit, people, portfolio, partners, planet, productivity—KORE includes policies focused toward the operations of the individual plants, such as risk assessment and management, incident management and crisis resolution, traceability and product recovery, food defense, and supplier management. Incorporating these operational requirements with the standards of GFSI creates an integrated quality management program that holds all of its operations to the same standards for production and distribution of its beverages.
The Secret Formula
The Coca-Cola formula is so secret ...
- Originally developed in 1886, it was not put into writing until 1919.
- This single copy of the written formula was used as collateral on a loan taken out by Ernest Woodruff and a group of investors to finance purchase of the company.
- The formula was kept in a bank vault in New York until the loan was paid off.
- At that time (1925), the formula was moved to the vault of a bank in Atlanta, near the company’s headquarters.
- In December 2011, under dark of night and tight security, the secret formula made its final move (to date) into a vault in the World of Coca-Cola attraction in Atlanta.
- Only a handful of plants around the world produce the secret-formula syrup ... and those locations are almost as secret as the formula itself.
- The Coca-Cola formula is considered to be one of the world’s most closely guarded trade secrets.
With this consistent internal structure in place, the company then took its GFSI commitment a step further, to ensure end-to-end food safety. Just as was being required of Coca-Cola as a supplier, “We said, ‘Let’s deploy the same approach throughout our supply chain,’” Marshall said. “Ingredient and primary packaging suppliers must be certified to one of the GFSI schemes.”
Attaining GFSI certification will help to reduce the number of audits that a plant, or supplier, must undergo, he said, adding, “The GFSI mantra is one audit is accepted by all companies.”
The philosophy is indicative of Coca-Cola’s overall philosophy of supply chain quality and safety. “Having that holistic view of your supply chain is key,” said Vice President/Chief Quality, Safety and Sustainable Operations Officer Jos Wellekens. That is, “making sure that your program covers your product end to end.”
But Coca-Cola didn’t stop with requiring GFSI, it also became part of the process. Not content with simply implementing schemes and standards developed by others, Coca-Cola representatives have become participants in the GFSI technical working groups and are often speakers at conferences and events. This not only enables Coke to have its voice heard, it provides a forum for sharing of ideas and practices.
By becoming involved in the process and interacting with other companies, Coke has been able to integrate others’ best practices into its system and has become more open about the sharing of its own. “It has been really important for Coke to look at external participation for quality and food safety,” Marshall said. “As we engage more, Coke people want to be involved in speaking and sharing of information. This has been a real step change to a more external focused approach over the last four years.”
GFSI is managed by the Consumer Goods Forum, an independent global network for consumer goods retailers and manufacturers with a basic tenet of knowledge sharing. And, whether a manufacturer is large or small, “the rules are the same for everyone,” Marshall said. Thus, he added, “GFSI provides a huge networking advantage.” Manufacturers who become involved in GFSI programs, working groups, or regional events gain access to such knowledge sharing with a vast array of retailers and manufacturers. “All the people you need to connect with are there,” he said. “It’s all about public and private partnerships in a non-competitive space.”
Best Practice Sharing. It isn’t only through GFSI that Coca-Cola shares its practices. Rather the company sees a great value in such sharing, both internally and externally, and maintaining transparency throughout. As Wellekens stated, “Food safety is not competitive, and transparency is key.”
Internally, in addition to sharing of results and lessons learned in the company’s at-trade sampling, Coca-Cola is in its second year of a Food Safety and Quality Award program. “It’s a way to share best practices across the company and increase transparency, and it’s something that any company can do. It doesn’t have to cost a lot of money,” Marshall said.
In announcing the program, he said, the company didn’t say what, if anything, would be won. Rather, it simply said that the company was trying to promote best practices across the system and requested that ideas be posted on the company’s intranet, to which all have access. The program received great response, resulting in the sharing of a number of best practices, and, Marshall said, “It promotes great pride and ownership for the associates who submit. It is definitely helping to drive quality and food safety culture and awareness.”
Coca-Cola also has an ongoing internal innovation program, by which employees are encouraged to post innovative ideas on a page of the company’s intranet, to which others can make comment or “like.” Periodically, the top ideas are then pitched to Coca-Cola’s Board of Directors for potential implementation. For smaller, one-plant companies, posting of the ideas on a board or binder in the break room or other central location could provide a similar experience.
The company also posts monthly food safety webinars geared toward its quality and food safety managers, but are available to any employee. The company’s size is of benefit in these programs, as it has held webinars by industry leaders, such as Walmart Vice President of Food Safety Frank Yiannis and Cargill Vice President of Corporate Food Safety and Regulatory Affairs Mike Robach, but the concept of recording presentations and making them available to all employees could be adopted by any food manufacturer.
Supply Management. While such procedures provide for continuous improvement derived from internal best practices, Coca-Cola also continuously looks outside its four walls for such. Wellekens recently moved from Belgium to Atlanta, Ga., after having spent most of his 21-year Coca-Cola career, as well as previous industry experience, in Europe.
Prior to joining Coke, Wellekens had worked at Monsanto. When he began, the quality assurance work was all conducted within the plant. “We worked within the four walls of the plant to do process improvement, then saw the need to expand,” he said. “We started working with our suppliers to ensure they knew our requirements and we knew their constraints.”
|While operating on a philosophy of focusing products and practices to local tastes, culture, and regulations, the production of Coca-Cola at any manufacturing facility around the world is essentially the combining of four parts: the secret-formula concentrate, water, sweetener, and carbonization.
When Wellekens came to Coca-Cola in 1992, he developed a similar program, again focused primarily on ensuring that all suppliers know Coke’s requirements, and that Coke knows and understands the constraints under which each of its suppliers must work, then finds the best way to ensure that these are met, while quality and food safety are maintained end to end.
A Transparent Future. With European Union food safety regulations and practices varying from those of the U.S., domestic processors can learn a great deal from many of its practices, particularly its transparency.
“Europe has a very transparent system,” Wellekens said. In fact, the industry and the regulators tend to work closely, with an almost open-door policy existing between the two. Food manufacturers will even invite government authorities into their labs to show them what they are doing and, in turn, manufacturers visit government labs. Such transparency and sharing, Wellekens said, is in the interest of both parties.
For example, Wellekens explained, at one point, regulators came into his company stating that a test had indicated a non-standard element. The company responded that that was not possible; it had data points which countered those results. The regulators reviewed the data and testing and ended up correcting their test methods.
Whether or not such a partnership would come to pass in the U.S., Wellekens does see the U.S. as moving in the direction of increased transparency overall. “The more you can collaborate across the supply chain, in the best interest of the public, the safer it will be,” Wellekens said.
The author is Editor of QA magazine. She can be reached at email@example.com.
Photos by Lisa Lupo and courtesy of Coca-Cola