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Seven-Up Bottling Co, And How NOT To React To Stiff Competition

Seven-Up Bottling Co, and How NOT to React to Stiff Competition

In December 2007 when Sulaiman Adebola Adegunwa (former chairman of Sterling Bank) decided to establish Rite Foods as an offshoot of Ess-Ay Holdings (that actually nothing to do with food production), he knew he would have to battle UAC Foods, Coca-Cola Hellenic Bottling Company, and Seven-Up Bottling Company – the brands dominating the fast-moving consumer goods (FCMG) space in Nigeria.

The company first started with Sausage rolls (Rite and Bigi) before venturing into soft drinks (Bigi and Fearless) which was a really good move. But it would take more than that, as an indigenous company, to displace the big names that controlled the FCMG industry. So, Rite Foods went for the classic cost leadership strategy – but this time offering even more, for less. (Recall that Bigi drinks had more quantity but were sold for N100 at the time Coca-Cola sold theirs for N120.)

Did the strategy work? I’ll let you be the judge.

But Coca-Cola Hellenic and Seven-Up Bottling Co had to adjust their prices in order to counter Rite Foods daring move. But the thought of an indigenous company forcing their hand in such manner didn’t go down well with Seven-Up Bottling Co MD, Ziad Maalouf. So, in November 2019, he sent a memo (that eventually leaked) to the top execs of the company, which led Rite Foods lawyers to file a petition against the company at the Senate House earlier this year. They believed the memo threatened the security and existence of Rite Foods.

This review, on one hand, shows how Rite Foods, as a new entrant into the FCMG space, managed to get a huge headstart in the race; while on the other hand shows how Seven-Up Bottling Co handled the competition as opposed to what PepsiCo did the other day.

Personally, I don’t exactly fancy Rite Foods. First, the only thing they have going well for them is that they are the top indigenous company in the space – they do not really have better products. Then, they say their business strategies are customer-centric, but their mission and vision have nothing in them that benefits the general public.

I have my personal reservations about how the owners and executives run Seven-Up Bottling Co but I do not exactly believe the MD had any factual plans for Rite Foods even though the memo was self-indicting.

On the other hand, I believe Rite Foods will eventually push Seven-Up Bottling Co out of business in Nigeria (before the end of the decade). The company is truly innovative as their brand values suggest, but I believe they still have a lot of work to do.

 

Over to you… do you think Rite Food’s line-up will eventually totally displace Seven-Up Bottling Co’s and Coca-Cola Hellenic’s line-up? Do you also think Rite Foods are actually consumer-oriented even though their mission and vision do not show it?

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