Tajikistan’s Obi Zulol has grown to become the country’s leading soda bottling company by working in partnership with RC Cola International
About Obi Zulol’s journey with RC Cola International
Tajikistan’s leading soda bottling company, Obi Zulol, is the flagship of the food & beverage industry in Tajikistan and provides carbonated soft drinks to neighboring countries. The company has facilities for production of a wide range of carbonated soft drinks and juices, and uses all types of packaging for its broad beverage portfolio: PET (polyethylene terephthalate) glass bottles and cardboard packaging. The company produces beverages via a variety of production methods – cold, hot, and aseptic.
Obi Zulol has been a partner of RC Cola International for over twenty years. With RC Cola’s support, it has been successful in developing long-term strategic planning and mapping out the company’s growth, working toward increased sales and market share. And it has seen incredible success. "RC Cola International warmly supported us in our search for a strategic investor and equipment suppliers. The RCCI team was actively involved in developing our facilities - providing advisory services and pushing us to actively develop our capabilities."
The Goal: Preserving a Leadership Position
Obi Zulol’s management felt that they must continue to expand the company’s reach and beverage portfolio in order to preserve its current role as the regional market leader for carbonated soft drinks.
There is stiff competition in the soda bottling industry in Tajikistan, so preserving the company’s leadership position is crucial.
Obi Zulol strives to leverage the RC brand to continue its current growth rate and preserve its high levels of popularity – locally and throughout the region.
The Challenge
To maintain its current success in the regional market, Obi Zulol’s management decided to increase the company’s production capacity. The problem was, that in order to increase capacity, the company needed to identify new ways of lowering production costs.
After exploring several possibilities together with RC Cola, the direction adopted by Obi Zulol involved reducing its production costs by capitalizing on a global trend supporting the consumption of healthier products.
In recent years, rapidly growing consumer interest in health and wellness has led to the introduction of new sugar taxes around the globe. Legislation taxing sugar in carbonated sodas and high-sugar juice products has already been passed in many countries.
This trend became a more significant issue at Obi Zulol when, on January 1, 2020, Tajikistan’s neighboring country Uzbekistan passed a sugar tax.
In addition to the cost of the sugar tax, there is also the “regular” costs of the sugar itself - which continues to rise. In fact, at Obi Zulol, sugar had become one of the company’s most expensive purchases. In 2019, Obi Zulol spent $4.21 million on sugar accounting for 31.6% of their total expenditure on raw materials, which came to $13.31 million in total.
The sugar tax, a new cost that is being absorbed by soda bottlers and manufacturers, prompted Obi Zulol’s management team to look for innovative ways to reduce production costs, while simultaneously appealing to a more health-conscious consumer base.
Processing Grapes as a Sugar Substitute
Manufacturers around the globe are evaluating the option of switching from sugar to fructose or corn, which have the advantages of being more stable in price and are not taxed. But Obi Zulol was interested in researching and identifying the best sugar alternative i.e., a sweetener that would allow the company to retain the great taste of its beverages while partially replacing the sugar in their existing recipes. They were looking for a cost-effective sweetener that would be viewed by consumers as a healthier, more natural alternative.
Obi Zulol’s search for new ways to lower costs and optimize technological processes led the company to consider a purchase of equipment for making concentrated grape juice.
Concentrated grape juice can be used as a sugar substitute in the production of juices, nectars, fruit purees, smoothies, and jams. The company moved ahead with the development of concentrated grape juice and it initiated a project of a new grape processing line this year. Obi Zulol will be processing about 5,000 tons of grapes, allowing for production of 1,000 tons of highly concentrated grape juice.
Once the grape processing line is in place, the next stage, scheduled to launch in 2021, is to start producing beverages that use concentrated grape juice instead of sugar.
Expanding Your Beverage Portfolio With RC Cola
With the assistance and support of RC Cola, Obi Zulol is now developing in a new direction that will allow it to continue expanding its production capacity while cutting costs.
Obi Zulol includes RC Cola products in its beverage portfolio and continues to receive direction regarding long-term strategy and marketing from RC Cola. The company illustrates how partnering with RC Cola can help you expand your operations and improve your bottom line.
There have been many benefits to working with RC Cola, according to a member of Obi Zulol’s team, who summarizes the partnership experience as follows:
“We have always walked together, hand in hand – jointly overcoming all the difficulties and challenges that have stood…in our way…. We have always looked for ways to increase sales, expand our markets and the product line under the RC brand. And in this we have achieved significant and visible results.”
To learn more about how RC Cola can help you expand your regional bottling presence, contact us.