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March 2008
More Than Good Faith
By Ellison Clary

     Hiring quality people and helping them grow professionally and spiritually is at the core of the phenomenal success of Coca-Cola Bottling Co. Consolidated (“Coke Consolidated”), its leader says with conviction.

     “To make, sell and deliver soft drinks better than anyone else,” comes first in the company’s mission statement, but right after that is: “Our values honor God.” It is a promise a visitor hears early on from J. Frank Harrison III, fourth generation family leader of what has become the nation’s second-largest Coca-Cola bottler.

     Harrison, 53, quickly cites the Bible verse from which that promise originates: “The Lord God declares those who honor me I will honor,” he paraphrases from 1 Samuel, Chapter 2, Verse 30.

     “When we say our values are about honesty, integrity, teamwork and no politics, morality and ethics, running a clean operation, we’re really serious about it,” Harrison says in his baritone Southern drawl that he acquired growing up in Chattanooga, Tennessee.

     For Harrison, success in his personal, family and business life is more than a matter of good faith; it’s putting that faith into practice on a daily basis and in all matters. And in his case, it has benefited both Coke Consolidated and the Charlotte YMCA.

     Harrison’s strong beliefs parallel those of the YMCA, an organization he started a lifelong affiliation with as a youth in Chattanooga playing in sports leagues for elementary school kids. He laces his comments about Coke Consolidated, as the company often refers to itself, with references to “the Y” and correlates the success of both.

     “Why am I so passionate about the Y?” he asks rhetorically. “Their mission is to put Christian principles into practice through programs that build a healthy spirit, mind and body for all. They really serve their members, and when you serve the community, people tend to get passionate about you.”

 

Bubbling Up Growth and Variety

     The Harrison formula of combining his own strong religious convictions with the precepts of the YMCA is working for Coke Consolidated. With corporate headquarters in Charlotte’s SouthPark, the company operates in 10 states. It enjoys one of the highest per capita soft drink consumption rates in the world and manages bottling territories with a consumer base of 18.7 million people.

     The company, which will report 2007 financial performance at the end of this month, enjoyed $1.431 billion in sales for 2006, up from $1.380 billion in 2005 and $1.267 billion in 2004. Coke Consolidated has 1,250 employees in the Charlotte region and 6,000 system-wide.

     The firm operates bottling plants in Roanoke, Va.; Bishopville, S.C.; Mobile, Ala.; and Nashville, Tenn.; as well as a 700,000-square-foot facility in Mecklenburg County near Highway 16. That plant alone produces 45 million cases of soft drinks annually, helping supply 53 Coke Consolidated distribution centers.

     Coke Consolidated has had a huge growth spurt that started in the 1980s, roughly coinciding with Harrison’s tenure. At that time, the company was about one-fifth its current size and began buying up mostly family-run Coca-Cola bottlers around the Southeast.

     Harrison’s firm didn’t feel pressure to grow for survival. “We thought we’d be far more effective from the basic advantages that come from consolidation,” he explains, “purchasing power; more customers and capable people.” It’s about economies of scale, adds Lauren Steele, long-time vice president of Corporate Affairs.

     Today, Coke Consolidated produces more than 500 products, counting the various sizes and packages of drinks that range from Coca-Cola Classic to something called Scalded Dog. It has three subsidiaries, one of which, BYB Brands, Inc., creates new beverages that Coke Consolidated sells under its own labels. Energy drink Scalded Dog is among them along with the related Frigid Dog, a “sensation beverage” that delivers a cooling, menthol agent.

     Other proprietary products from BYB include a vitamin-enhanced water called Respect and a non-carbonated, flavored item known as Tum-E Yummies.

Sometimes products augment a line offered by Coca-Cola. For instance, the Atlanta-based soft drink giant has a premium ice tea called Gold Peak. Coke Consolidated produces a ‘down home’ variety, Country Breeze, that Harrison dubs Bubba Tea.

     In another instance, BYB licensed the name Cinnabon, and launched Cinnabon Premium Coffee Lattes in the Coke Consolidated sales territories in 2006. By early 2007, Cinnabon Lattes were available in 41 states.

     Another subsidiary is Swift Water Logistics, which Harrison says was formed to conjure up innovations such as a package of soft drinks designed for easy use in home refrigerators. Coke Consolidated invented that, but other companies quickly copied it because Coke Consolidated didn’t pursue a patent. Swift Water Logistics won’t let that happen again.

     Perhaps Swift Water’s most important creation in its two-year existence is CooLift, a delivery system that puts customer orders on custom-designed pallets. Combined with special lift devices on trucks, these pallets cut delivery time in half and improve productivity between 30 and 40 percent. The system is in about half of Coke Consolidated’s operations. Further, Swift Water sells the system and its equipment to other bottlers and distributors.

     The third subsidiary is Data Ventures, an 8-year-old operation which taps scientists in New Mexico’s Los Alamos National Laboratories for price elasticity studies and to map consumer patterns for supermarkets such as Harris Teeter.

     The core business remains making and bottling non-alcoholic beverages. Classic Coke is still Coke Consolidated’s most popular product, accounting for about one-third of its business. Next is Diet Coke, claiming about 17 percent.

 

A Taste of Different Jobs

     If this kind of innovation is surprising, maybe it shouldn’t be. After all, the company that Harrison’s great-grandfather J.B. Harrison founded in 1902 was one of the first to market Coca-Cola in bottles.

     Though his family owns controlling interest in Coke Consolidated, Harrison believes in allowing people to work their way up in the organization. He did that, to an extent.

     Harrison toiled as a teen in his father’s Chattanooga glass plant that produced those familiar Coke bottles. After completing a business administration degree at the University of North Carolina in 1977, he signed on with Coke Consolidated, but later took time off to get his M.B.A. at Duke University. Through the years, he spent time as a management trainee and as division sales manager and vice president. In 1987, he became vice chairman of the board of directors; in 1994, he took over as chief executive officer; and in 1996 he became chairman of the board.

     Looking back, Harrison recalls an instructive experience from a summer job during college when he was operating a Coke distribution route in Raleigh.

     “I had this store manager actually throw cans of Coca-Cola at me because I was taking a little bit too much space in his cooler,” Harrison recounts with a shake of his head.

     He calls that an example of how experience in a base-level job teaches valuable principles such as patience, endurance and humbleness. “Our business is a very rewarding, fun, challenging business,” he says, “but its hard work and its always changing.”

     Consumer tastes continue to demand more beverage options. Coke Consolidated produces many of them and plans to add more. The company added 130 new SKUs in 2007, which Harrison calls incredible since it had only 200 just five years ago.

     “What’s driving all that,” Harrison says, “is the consumer. The health and wellness trend, that’s alive and well. On the other end, you’ve got energy drinks, caffeinated products, sugar-loaded products. Different consumers drink different beverages on different occasions. We’re already in juices, coffees and teas. We’ve got just about everything but milk.” He pauses, then chuckles, “There are even vitamin-added sparkling drinks—Diet Coke with vitamins.”

     Harrison cites product proliferation in playing down the rivalry between Coca-Cola and Pepsi. “It’s no longer Coke and Pepsi. It’s Coke and everybody,” he says. “We’re just as aggressive now whether it’s the energy drink category or teas and coffees.”

 

Parallels to the YMCA

      Driving Coke Consolidated’s success is its quality work force, Harrison believes. “We want our folks to be very capable and sharp and able,” he says, “but in addition, they’ve got to have strong character.”

      He brings up the YMCA mission to build spirit, mind and body: “See, there are a lot of parallels in the way we do business and the way the Y does things,” he says.

When he took that summer route job for Coke in Raleigh, Harrison lived in the Raleigh Y until he found an apartment. He still works out at the Y every other day. When he travels, he always asks, “Where is the Y?” although he acknowledges he sometimes ends up using hotel exercise facilities.

     Soon, the YMCA of Greater Charlotte will honor Harrison with its John R. Mott Award. It’s named for a man who championed the cause of displaced prisoners during both World Wars and who won a Nobel Peace Prize in 1946.

     The honor goes to one person annually who exemplifies John Mott’s ideals through long service to the YMCA. It celebrates commitment to the Y’s Christian mission and “visionary leadership that encourages leadership in others.”

     “Mr. Mott was an outstanding Christian business leader,” says Harrison, adding that he’s honored to be named in the company of other area winners such as Mac Everett, the Dowd Family and Russell Robinson.

      Most satisfying for him, Harrison says, is seeing employees grow and develop in personal life as well as in a career. For much of this, he credits the company’s devotion to values shared by the Y.

     “Taking care of our people, serving our people,” Harrison says, “I want to continue to get better at that. If you have great people and you care for them, the loyalty and commitment that comes from all that is incredible.”

     He believes it is important for workers to be “selfless” rather than “selfish.” To promote this ideal, Coke Consolidated has developed about 30 Stewardship Programs in which employees can serve their communities.These programs remind him of the Y, he says, because they meet community needs related to physical, emotional and spiritual matters.

     Among the more popular is a program that lets employees take time off to visit people in elder care facilities. They talk with the residents, provide them with companionship and, if someone has a need such as a new bathrobe, the employee makes sure it is filled.

     Coke Consolidated operations elsewhere work with the homeless or do prison ministry, and the list continues.

     Another internal program that has proved to be very popular with employees is “sick car Saturday.” This periodic program targets single, working mothers at Coke Consolidated, Harrison says, and gives them free mechanical service for their vehicles at the Charlotte bottling plant’s fleet facilities.

     Morgan Harrison, eldest daughter of Frank and Jan Harrison, runs the Stewardship Program. “She has a real heart for people,” Harrison smiles.

     Other Harrison children are high school student Carter and collegians James and Caroline. Harrison admits that his offspring tease him sometimes about his devotion to the Y, but he doesn’t mind.

     “The Y is an organization that has had a very positive influence on me and my family,” he says. “I’ve seen it influence lots of other families, too.”

     Certainly, in Harrison’s case, practicing Christian values has helped his family and his company to live on the better side of life.

Ellison Clary is a Charlotte-based freelance writer.
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