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COCA-COLA’S ‘eKOCool’ SOLAR COOLER: INNOVATION TO
EMPOWER WOMEN RETAILERS IN RURAL INDIA

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When you put out an asset, you need an economic return, but there is value beyond the
economic return when you empower a family… And that is what the Coca-Cola Company is all
about. It is our little way of giving back to society. It is opening up new markets in rural India,
and it is doing so in a sustainable way, a green way.
- Atul Singh, Group President, Asia Pacific

It was June 2011, and Atul Singh, the then President and CEO of Coca-Cola India and South-west

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Asia, was delighted. A pilot run of ‘eKOCool’, a solar power operated cooler developed by the
company had been installed at a retailer’s premise in the rural areas off Agra, a city in northern
India. While the consumer transaction for Coca-Cola’s beverages had increased, there were savings
being made in terms of both the electricity bill and cost of transporting ice, by the retailer. Clearly
serving chilled coke in the height of summer in villages that went without power for several days at
a time had struck the right chord.
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The journey to develop the solar cooler started over two years back in May 2009, when Singh
visited rural markets in the state of Uttar Pradesh, an electricity-starved part of India, and
discovered that several Coca-Cola retail outlets either did not have any chilling equipment or were
operating out of an ice-box. This was because access to electrical power throughout the day was
either non-existent or very limited. In addition, there were also issues in terms of procuring ice for
the ice box, where retailers often travelled distances exceeding five kilometres to fetch ice, and that
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source too was frequently unreliable. Singh returned to Delhi and laid down a challenge to his
Technical team: to develop a simple and commercially viable solution that would enable these
retailers to serve chilled Coke.

Innovation work was carried out thereafter, and after several iterations, by early 2011, a prototype
of the ‘eKOCool’, a chest cooler that operated through solar energy, was ready to run. It was
decided that the coolers, each of which had a capacity to store two crates1 of 300 ml Coca-Cola
glass bottles, would be distributed specifically to women retailers in rural areas. This initiative was
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in perfect alignment with the Coca-Cola company’s global ‘5by20 initiative’ that aimed to enable
economic empowerment for five million women entrepreneurs across the Company’s global value
chain by the year 2020. Specifically, the ‘5by20 Solar Cooler Program’ in India would be Coca-
Cola India’s environmentally friendly way to boost beverage sales while economically empowering
women at the Bottom of the Pyramid through increased opportunity to generate income.

Singh was pleased to note that the initial responses from the pilot run were promising. However, he
wanted to ensure that this initiative would be sustainable. How could the cost of these solar coolers,
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1
Each crate comprised 24 bottles.

This case was written by Professor Srinivas K. Reddy and Havovi Joshi at the Singapore Management University. The
case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or
ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

Copyright © 2016, Singapore Management University Version: 2016-01-12

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

which were priced initially at around INR 45,000 (US$779 2) each, be brought down, such that the

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initiative could be sufficiently scaled up?

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The Coca-Cola Company

The Coca-Cola Company, incorporated in 1892 and headquartered in Atlanta, US, owned the
iconic Coca-Cola Trademark. It was the world’s largest beverage company, owning or licensing

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and marketing over 500 non-alcoholic beverage brands. These comprised sparkling beverages and a
variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink
teas and coffees, and energy and sports drinks. The Coca-Cola Company owned and marketed four
of the world’s top five non-alcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and
Sprite.

Finished beverage products bearing the Coca-Cola trademarks were sold in more than 200

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countries around the world through a network of company-owned or controlled bottling and
distribution operations, as well as through independent bottling partners, distributors, wholesalers
and retailers. This made it the world’s largest beverage distribution system. Of the approximately
57 billion beverage servings of all types consumed worldwide every day, beverages bearing
trademarks owned by or licensed to the company accounted for over 1.9 billion servings.

For the year ending December 31, 2010, the company recorded revenue of US$35.1 billion, and an
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Operating Income of US$8.4 billion (refer to Exhibit 1 for further details on the financials).

Coca-Cola India Private Limited

In 1991, the Indian economy went through a liberalisation process, opening up to foreign
investments. A year later, the Coca-Cola Company, which had left India in 1977, re-entered the
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country through its wholly owned subsidiary, Coca-Cola India Private Limited. By 2011, The
Coca-Cola system in India had already invested US$2 billion, and was planning to invest another
US$5 billion by 2020. Its brands were leading in most beverage segments, and included highly
popular names such as Coca-Cola, Fanta Orange, Limca, Sprite, Thums Up, Kinley and Maaza.

In India, the Coca-Cola system comprised Coca-Cola India Pvt Ltd, which manufactured and sold
concentrate and beverage bases, along with powdered beverage mixes, to fourteen authorised
bottlers. These bottlers were authorised to use the products to generate the company’s portfolio of
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beverages and independently develop local markets, besides distributing the beverages to grocers,
small retailers, supermarkets, restaurants and numerous other businesses. In addition, the system
also included a company-owned bottling entity, Hindustan Coca-Cola Beverages Pvt Ltd.

The non-alcoholic ready-to-drink beverage industry was a large industry that had already made
capital investments close to INR 240 billion (about US$4 billion) in the Indian market, and was
poised to make additional investment up to INR 600 billion (US$10 billion) by 2020. 3 The
Industry generated permanent as well as seasonal employment at a very large scale but, most
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importantly, it triggered a multi-fold contribution to employment and livelihood for 3.5 million
people. With more than 95 plants across the country, the beverage industry had amongst the
broadest manufacturing footprints across the FMCG sector. According to the National Accounts
Statistics (2011), the Beverage Manufacturing sector, both alcoholic and non-alcoholic beverages,

2
US$1 = INR 57.7 as at June 11, 2013.
3
Data provided by the company.

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

accounted for 1.1 per cent of total manufacturing GDP and was increasing.

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‘eKOCool’: Launching a Journey from an Idea

The ‘eKOCool’ project was conceived in the summer of 2009, when Singh discovered that rural
outlets in Uttar Pradesh and other remote areas of India were using conventional ice chests – with
very little ice – to stock and sell beverages. This was because an estimated 60 percent of the

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population in the rural areas of India lacked electricity. Even those who had access to the grid
would often have power for only few hours a day.

Asim Parekh, Vice President - Technical, Coca-Cola India narrated the story:

Atul came back from his visit and was a little upset and charged up that there was so much
opportunity in the villages, and yet, he asked: “why were we not selling”? We replied that there

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are a number of seasonal outlets that open up in northern India in the high summer months,
and that these outlets usually have an ice chest for which they have to buy ice. It is not only
difficult for the retailers to get hold of the ice, but also it is typically put in the ice chest once a
day - so by the evening, the product is warm. In the temperatures soaring up to 42~45 degrees
Celsius (107-113 degrees Fahrenheit), the ice melts and the product gets warm, and the
consumer does not enjoy it. Atul’s response to our explanation was that we should go find a
solution.
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Initially, we thought that we should set up an ice-making unit in our plant - but then we gave up
the idea because of the logistics involved, and a whole lot of other issues. We then decided to
embark on developing a solar cooler. The cooler part we knew, but what we did not know was
how to connect it with solar power. So we started out on our innovation journey and developed
our first solar cooler, which we put up on our office terrace. We showed it to Atul. He liked it,
but asked us about the cost. We said it was about $3,500. He said it was a good model, but
asked us to reduce it by $1,000. So we went back to the drawing board and six months down the
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line we had another model, which was close to $2,500. Again Atul wanted us to reduce the cost
– this time to below $1,000. So we went back and managed it. He was now happy with the
model, and agreed to try it out in the market.

Getting the Product Right

The principal challenge that Coca-Cola faced while developing the solar cooler was to arrive at a
sustainable, simple and reliable system configuration at an optimal cost. The company’s India
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Technical team partnered with the Mumbai-based Western Refrigeration to develop the prototype.
Thereafter, another challenge was the supply chain for making components available according to
the finalised equipment configuration.

While a regular electric cooler ran on an Alternating Current (AC) configuration, it was decided to
build ‘eKOCool’ using Direct Current (DC), as this made the product far more reliable. Moreover,
an AC system would also require the retailer to be provided with an inverter and batteries, which
could potentially be used by the retailer for other domestic purposes, whereas the DC system
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product was totally integrated.

Each ‘eKOCool’ was further equipped with value-added features such as a solar lantern and mobile
charging ports. Added Asim Parekh, Vice President - Technical, India & South West Asia, Coca-
Cola India:

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

The model helps create a market in areas where Coke was not present at all. It is providing

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additional business opportunities for the small enterprises and women retailers. The mobile

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charging ports are often used by some shopkeepers to attract customers by allowing them to
charge their cell phones if they buy something from the shop. Others are even allowing it for
free. The light from the Solar Lantern keeps the retailer’s business going till late in the night.

The eKOCool model was tested in the rural markets in various formats. Initially, they were
installed on a mobile trolley, which was like a tricycle cart with the solar panels on top of it and

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could be driven like a three-wheeler cart. After that, the option of a push-cart was tried out.
However, based on feedback received from the market, the final decision was to adopt the stand-
alone version, which turned out to be the most effective.

Typically, in rural India, a stand-alone outlet would have the front portion of the house converted
into a small store, which allowed the woman to manage both the store and the family needs
simultaneously. So, for the outlets located in villages where grid connectivity was limited or not
available at all, these solar coolers (stationary and stand-alone) were installed such that the panels

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were placed on the roof of the outlet (refer to Exhibit 2 for an image).

The use of technology was simple – the cooler began working as soon as the first rays of sun hit its
panels. Small solar panels (about 1.1 square metres) installed on the rooftop of the outlet turned
solar energy into direct current, which in turn powered the coolers. A direct current compressor
motor, together with an evaporation set-up, cooled the chest cooler. As the solar panel needed to be
cleaned regularly, easy access to it was an important feature. It also had to be placed in the
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appropriate direction (with full day access to sunlight) and with no obstruction, for instance, such
as shadows produced by nearby trees. The power generated through the solar panel would run the
refrigeration cycle of a small box-styled cooler inside the shop, and in a few hours, the retailer
could open the cooler for an ice-cold bottle of Coke.
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Empowering Women Retailers in Rural India

The solar cooler was currently being distributed free of charge, only to women retailers, in rural
India. The focus on women came from The Coca-Cola company’s global ‘5by20 initiative,’ set up
with a stated aim to “enable the economic empowerment of 5 million women entrepreneurs across
our global value chain by 2020”, and India was one of the four pilot countries chosen to launch this
initiative. The ‘5by20 Solar Cooler Program’ in India was aimed at economically empowering
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women at the Bottom of the Pyramid, by increased opportunity to generate income through an
environmentally friendly way to boost beverage sales (refer to Exhibit 3 for further details on
Coca-Cola’s ‘5by20’ initiatives).

The women in the programme typically ran small convenience stores, with little or no power supply,
either full or part time in an upcountry rural area. Because the women were able to manage their
business and families simultaneously, their husbands’ could be employed elsewhere, generally in
farming or construction activities. These households were economically weak, and not in a position
to afford their own refrigerators or electric generators to run them (refer to Exhibit 4 for a real-life
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story). To make it easier for these women, there was also a route vehicle, which reached the shops
to refill the products on a regular basis, thus saving the outlet owners a long 20-kilometres or so trek
to get the products.

Elaborating on the ‘5by20 Solar Cooler Program’, Sonu Grover, Director - Strategic Initiatives,
Coca-Cola India & South West Asia, said,

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

Women entrepreneurs in rural India face several barriers - lack of physical and financial assets,

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lack of basic business training and cultural barriers in rural areas related to working women.

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The programme provides distinct advantages to rural women retailers by providing (free of cost)
an asset that enhances their income-generating capability. The cooler makes available an
assured supply of chilled beverages to the local consumers throughout the year. Being an
income generating member of the family, the participating rural women have also gained
enhanced status in their households.

We had PwC (a professional services firm) go to the market and talk to the retailers about the

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benefits of the ‘eKOCooler’. While this was of course a sample, it became clear that - first,
there was financial gain, with sales of the beverages having gone up five-fold. Second, there
were savings, on account of not having to procure ice or use electricity. Third, there was
income from the value-adds such as the mobile charger and solar lantern. Most of all, there
was a clear improvement in overall economic prosperity, as the income was going back to the
family primarily in three key areas: children’s education, daughters’ marriages and stocks of
supplies. It is gratifying for us that it is a small step from our side, and yet it is life-changing for

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them. The initiative continues to grow and expand its impact in the community.

Parekh added,

… Sometimes, with the Solar Lantern, it also helps that the retailer’s kids can study at night and
she can continue to do her household chores after dark. In the overall scheme of things, the
model has turned out to be sustainable as it is considerably increasing Coke's presence in rural
areas.
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The Cost of an ‘eKOCool’: a Challenge to Manage?

Discussing the cost of ‘eKOCool’ and the future strategy to continue distributing the coolers to
women retailers in rural India, Sunil Gulati, Director - Technical Service, Coca-Cola India
commented, “The eventual desire is to get the cost at parity to the current existing electric cooler”.
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While many other FMCG (fast moving consumer goods) companies, particularly those dealing in
perishable products such as dairy, found value in the solar cooler - clearly the cost of manufacturing
and maintaining these solar-operated products was recognised to be a challenge. Anand
Ramanathan, an analyst from KPMG reported,

While the concept of chilled beverages in power-starved areas is a great idea, rural retailers
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would find the coolers too expensive. Also, the operational and logistics costs are much more
than what is projected. It would be a real challenge for Coca-Cola to identify markets and
place these products… However, the novelty value will prompt competitor Pepsico to find some
storage solution for their products in rural areas.
- Anand Ramanathan, Associate Director, KPMG Advisory 4

Amul, which was India’s leading butter brand, reported that it had also started evaluating such
products across its distribution channels (the company had already installed solar-operated fat
testing machines in all village co-operative societies of Gujarat to test the quality of milk collected
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in these centres). 5
Sunil responded to the cost critics,

4
Priyanka Singh, Coke's cool move faces cost heat, Business Standard, June 13, 2011, http://www.business-
standard.com/article/management/coke-s-cool-move-faces-cost-heat-111061300003_1.html, accessed June 2013.
5
For further details, refer Priyanka Singh, Coke's cool move faces cost heat, Business Standard, June 13, 2011, http://www.business-
standard.com/article/management/coke-s-cool-move-faces-cost-heat-111061300003_1.html, accessed June 2013.

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

We worked with our partners, worked through the supply chain and brought down the costs to a

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third of the original cost. And right now the challenge is to get it down even further, as it is

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currently at a premium to the electric cooler. If we can get enough scale, we can bring the cost
down even further, to a point where we can start deploying the coolers to a much larger extent.
But this happens in stages. One part of the product is the cooler, but the other part is the panels,
and as solar technology improves, I am sure the cost of the panels will come down.

The important thing is that even if we look at the current economics, it works. The payback may
be a little longer than electric coolers for our system, but it is allowing us to open up outlets

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where there are none.

Lowering the cost of the ‘eKOCool’ was thus a key challenge for the company.

The Future of ‘eKOCool’: Can the Cool Idea Take-off?

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In India, a 200ml Coke glass bottle sold for about INR10 (US$0.17 6). The 2010 consumption
snapshot of Coca-Cola showed that the Indian consumer had some way to go in terms of catching
up with the per capita consumption of several other countries. Indians consumed 11 bottles a year of
Coca-Cola beverages against a global average of 89 and almost 400 in the US (refer to Exhibit 5
for further details).

Coca-Cola India’s ‘eKOCool’ clearly had the potential to expand the Indian market with this
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disruptive and sustainable innovation. As Parekh commented:

The coolers were bringing in first-time consumers who had never tasted our beverages before.
Markets such as South Africa and Turkey were adapting and testing the units. The model is
helping to create a market in areas where Coke has not been present at all. 7
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It was clear that this innovative product, “based on local insight and on-the-ground realities” 8, was
creating value for the lower economic segment of women retailers in rural India, thereby also
expanding underserved rural markets. Atul Singh concluded,

Sunlight is free, right? And so from the retailer’s point, it’s a real win-win. They get the cooler
for free, they don’t pay for electricity, they get a provision to charge the solar lantern and
additional income by being able to charge their cell phones. Additionally, their place becomes
a hang-out in the neighbourhood, so the footfall increases - and this is all based on renewable
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energy, not using fossil fuel like traditional kerosene lamps.

While the benefits of ‘eKOCool’ to the retailer were quite clear, Singh recognised that in the long
run, to scale up, it would be imperative that the cost of this cooler was kept low and affordable.
How best could this be done, and how could the golden triangle of business, government and civil
society come together to develop similar such initiatives that would create shared value for
communities?
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6
US$1 = INR 57.7 as of June 11, 2013.
7
Jay Moye, Coca-Cola India Develops Solar-Powered Coolers for Rural Areas, Coca-Cola, April 22, 2013, http://www.coca-
colacompany.com/stories/coca-cola-india-develops-solar-powered-coolers-for-rural-areas, accessed June 2013.
8
Atul Singh, quoted in an article written by Debjoy Sengupta, How Coca-Cola’s low-cost solar cooler is helping Coke spread its wing in
villages, Economic Times, November 9, 2012, http://articles.economictimes.indiatimes.com/2012-11-09/news/35014581_1_coca-cola-
india-coke-ceo-atul-singh, accessed June 2013.

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

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EXHIBIT 1: THE COCA-COLA COMPANY AND SUBSIDIARIES –

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INCOME STATEMENTS 2009 & 2010 (IN US$ MILLIONS)

Year ending Year ending


Dec 31, 2010 Dec 31, 2009
Net Operating Revenues 35,119 30,990
Cost of goods sold 12,693 11,088

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Gross Profit 22,426 19,902
Operating Income 8,449 8,231
Income before Income Tax 14,243 8,946
Income Tax 2,384 2,040
Net Income 11,869 6,906

Source: Company data

The Tricycle version


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EXHIBIT 2: MODELS USED TO INSTALL THE ‘EKOCOOL’
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The rooftop solar panels that were linked to the chest-style coolers installed inside the store below.

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

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Source: Company data.


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EXHIBIT 3: COCA-COLA INDIA, 5BY20 PROGRESS UPDATE

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In September 2010, the Coca-Cola Company announced a ten-year global initiative to empower
five million women through the Coca-Cola system. This initiative was aimed at helping women
entrepreneurs in the Coca-Cola Value Chain break down the barriers that could prevent them from
growing their businesses. By providing access to business skills, financial services and assets and
support networks of peers and mentors, the ‘5by20’ initiative was expected to help women achieve

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their entrepreneurial dreams globally, while also creating thriving, sustainable communities.

In India, the ‘5by20’ programme was focused on driving women empowerment through
entrepreneurship for inclusive growth. Other than the ‘eKOCool’ solar coolers, the three key
initiatives under this programme were “Pragati”, “Parivartan” and “Project Unnati”.

Parivartan

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“Parivartan”, or “positive change”, was a business skills programme that equipped shop owners and
local entrepreneurs with the skills required to succeed in India’s evolving retail landscape. The
Parivartan programme had a special focus on women retailers, under The Coca-Cola Company's
‘5by20’ initiative to empower women retailers across India. The programme was focussed on
building the retailing capabilities of women entrepreneurs so that they could run their businesses
better. The Parivartan ‘5by20’ training programmes were run in various cities across India with
'women only' batches. Retailers were trained on four key pillars: Shop Management, Stock
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Management, Customer Management and Financial Management. The trainers used multimedia
tools including videos, leaflets and presentations to conduct the training session. This was part of
Coca-Cola’s strategy for long-term sustainable growth, not just for the company, but also for the
communities that it operated in. The programme was conducted by the Coca-Cola University in
mobile buses that had been converted into classrooms. The buses travelled across remote parts of
rural India to deliver the training in multiple vernacular languages.
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Pragati

This was a business skills programme led by Hindustan Coca-Cola Beverages (the company-owned
bottling company in India), which focused on training and engaging women retailers in rural India.
The Pragati programme also concentrated on building the retailing capabilities of women
entrepreneurs by providing training, product knowledge and business start-up support to create and
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enhance livelihood opportunities. The programme was conducted mostly in bottling plants in
remote parts of rural India. The retail skilling programme conducted in these bottling plants was
followed by a plant tour to impart understanding of the high quality manufacturing processes used
to produce beverages.

Project Unnati

In addition to the retailer segment of the value chain, Coca-Cola also supported women producers
through Project Unnati, a supply chain initiative that would enable mango farmers to adopt modern
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farming techniques (Ultra High Density Plantation technique) and good agricultural practices.
Combined with a drip irrigation system, the programme helped farmers double their crop yield
thereby enhancing their income. Over the next five years, Project Unnati aimed to reach out to
50,000 farmers, 20 percent of whom would be women farmers.

Source: Company data.

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SMU-16-0002 Coca-Cola’s ‘eKOCool’ Solar Cooler

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EXHIBIT 4: EMPOWERMENT OF WOMEN – A REAL LIFE STORY

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Preeti Gupta, mother, wife, and rural shopkeeper in the district of Agra, is one of the women who
has been helped through the ‘5by20 Solar Cooler Programme’. She commented, “The most
important moment in my life, was when I started my own shop.”

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Gupta lives in rural India, 15 km outside the city of
Agra in a village called Nagla Sabla. Over the
years, she and her family have been without power
for days at a time with no warning, as electricity in
the area is very limited and undependable. Like
many women in her village, Preeti was expected to
remain at home and care for her family after having

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children. But, Preeti was determined to give her
children a chance at a better life.

She needed to generate additional income to


support these dreams, so she and her husband took
up loans to open a small shop in their living room
where she sold grains, snacks and beverages as well
as many other household goods. Living and
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working with only intermittent electricity proved
challenging, but the addition of a solar-powered
cooler provided by Coca-Cola India has changed
Preeti and her family’s lives.
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How exactly can a cooler have such an impact?

The device chills two cases of beverages at a time and also has outside ports to charge a solar
lantern and a mobile phone—forming a literal line to the outside in rural communities. Preeti could
offer her customers cold beverages – a bit of a novelty to a community “off the grid” – and she
could keep her shop open after the sun set when the other shops had shut down. Perhaps the most
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important benefit was that her children could study at night as they pursued an education and better
life.

In Preeti’s case, something as simple as a beverage cooler is making dreams a reality. Income and
quality of life for Preeti and her family has increased since getting the cooler, with Coca-Cola
beverage sales providing approximately 15-20 percent of their earnings depending on season. This
income means Preeti can invest in needs many others consider basic: healthcare for her family and
an education for her children. They now have an opportunity to get ahead.
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The impact on the life of Preeti Gupta has since been featured in USA Today, BBC News, during
Clinton Global initiative and by Economic Times.
Source: Company data.

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EXHIBIT 5: PER CAPITA CONSUMPTION OF THE COMPANY’S BEVERAGE PRODUCTS

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ACROSS THE WORLD - 2010

To measure its growth potential, The Coca-Cola Company looks at its per capita consumption,
measured by the average number of 8-ounce servings of its beverages consumed each year in a
given market.

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2010 Consumption Snapshot Per capita consumption
(8 ounce servings)
India 11
Mali 12
Indonesia 13
Pakistan 15
Nigeria 28

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China 34
Kenya 40
Egypt 54
Russia 69
South Korea 69
Morocco 84
Worldwide 89
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Thailand 94
Colombia 125
Italy 139
France 143
Philippines 144
Turkey 159
tC

El Salvador 166
Japan 178
Germany 179
Peru 193
Great Britain 204
Bolivia 221
Brazil 229
No

Canada 236
South Africa 254
Austria 255
Panama 258
Spain 284
Argentina 318
Australia 319
United States 394
Do

Chile 445
Malta 606
Mexico 675

Source: The Coca-Cola Company, Assets, http://assets.coca-


colacompany.com/ba/22/39fae0564dcda20c694be368b8cf/TCCC_2010_Annual_Review_Per_Capita_Consumption
.pdf, accessed June 2013.

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