Al-Hayat has integrated global standards with the local culture to be able to represent PepsiCo and to give their customers the best.
The majority of the local businesses have been profoundly affected in response to the financial crisis in the Kurdistan Region of Iraq (KRI) between 2015 and 2017. During this severe economic turbulence, instead of sinking, Al-Hayat’s senior executives, who has over 80 years of experience in multinational corporations (MNCs), has changed almost everything from A to Z to elevate the company to an international level and put the company on the path to what it has now today: double digit growth.
Customer-centric business model, brand-new facility, strict quality control standards, strong distribution and cutting-edge services are the leading factors behind the outstanding performance that Al-Hayat has shown in recent years.
Game-Changer: Direct Distribution
Al-Hayat has built a very strong distribution model in the KRI in terms of coverage breadth and depth in the last three years. Today, they can reach more customers in their territory than anyone in the fast-moving consumer goods (FMCG) business. Moreover, the company reaches customers more frequently than anyone else, which helps them deliver a superior level of service.
Al-Hayat has built a very strong distribution model in the KRI in terms of coverage breadth and depth. They can reach more customers in their territory than anyone in the FMCG business.
Al-Hayat’s biggest move took place in shifting to a direct distribution model in 2017. Thanks to the transition from distributor to direct, the company had around 20-25 percent growth year on year. The company used to hit 60 percent of the shops in the KRI. Today the number has reached 88 percent. Al-Hayat aims to be in every shop which has capability to represent them, and they are on their way to getting there.
Al-Hayat made substantial investments to renovate its facility and change its machines to elevate its plant to an international level. Since the company upgraded its plant, Al-Hayat’s Erbil facility has been ranked as one of the best in class for Pepsi in the MENA region.
Since Al-Hayat upgraded its plant in Erbil, the company’s facility has been ranked as one of the best in class for Pepsi in the MENA region.
Thanks to renovating its facility and modernizing its equipment the company produces its product range in significantly larger quantities and more efficiently, using less energy and water. The renewed facility has also allowed the company to reduce its environmental footprint.
Adapting the model to improve its efficiency has also enabled Al-Hayat to use its available resources much more efficiently. The company has integrated an Enterprise Resource Planning (ERP) system to optimize production to enhance its efficiency. Al-Hayat is closely working with Oracle on its ERP system.
Consumer Centric Approach
Analyzing the local market and customers’ preferences is key to success for Al-Hayat management. The company’s customer centric approach had made the global brand Pepsi much more relevant to local consumers in the KRI.
“You need to understand the local culture in order to make the most of the international standards being applied. Thus, we integrate global standards with the local culture to be able to represent PepsiCo and to give our customers the best,” Al-Hayat CEO Rashad Korkis says.
Top-Quality Control Standards
From purchasing the raw materials to storing them in the warehouse in Erbil, until materials to production, and from production to the finished goods and to the market, until the product is sold to the consumer, Al-Hayat maintains PepsiCo’s international quality control standards.
Al-Hayat’s product quality standard stays at the top thanks to the changes the company has made in the last two years.
The company receives a monthly quality standards report, called 3D Quality, from a third party which takes random samples from the plant and the market and sends it to their lab in Europe. The third party checks all the parameters, the flavor and all the other details of the product.
Senior management is proud of the results they receive regarding quality control standards. The company’s product quality standard stays at the top thanks to the changes the company has made in recent years.
Al-Hayat innovates in terms of quality control to ensure that every product is of exactly the same high quality. “Our quality standards are based on PepsiCo International, and this is something that we cannot play with. We always have to be on the highest level,” Al-Hayat senior executive says.
Training has been playing a crucial role in the company’s outstanding performance in recent years. Al-Hayat management aspires to get the right set of skills for its employees to push their level-up on a continuous basis.
Al-Hayat implements the highest level of systems in HR, such as adapting PepsiCo system to fit local market needs. The company has weekly in-house training for its employees. The training includes English language, computer skills, sales and HR. To improve the skills of the senior managers, the company send them abroad regularly.
We have over 500 employees. Ninety-five percent of our workforce is local. We have here a culture of training and of surpassing targets.Rashad Korkis, CEO, Al-Hayat
Al-Hayat is a strong believer in the fact that women’s empowerment is one of the most important enablers of sustainable human development. The company has committed to building a gender-balanced organization and set a clear ambition to increase the number of women in management positions in the years to come.
Al-Hayat senior executives foresee that Kurdistan and wider Iraq present many opportunities to manufacturers of FMCG in the medium to long term. The regional or international FMCG brands can use Kurdistan as a base to access Iraq’s 40 million consumer market, for which Kurdistan offers government incentives for investment, robust security and stability.
Al-Hayat look for new FMCG products that maximize synergies with its existing product portfolio and that they can sell through distribution channels in which they are already strong.
Since its establishment in 2006, Al-Hayat has been operating in the beverage segment. However, the company has future expansion plans for FMCG products. Kurdistan has a very young population; 50 percent of the KRI’s population is under 20 years old. The economy shows positive trends since the beginning of 2019, meaning that consumption will keep increasing. Therefore, Al-Hayat looks for FMCG products that maximize synergies with its existing product portfolio and that they can sell through distribution channels in which they are already strong.
In terms of manufacturing, Al-Hayat represents a tremendous opportunity for companies coming from other markets. They can replicate their business model to any FMCG company in the KRI. Their infrastructure is ready, distribution is the strongest. They plug and play. So, they can set up a customer-designed manufacturing process quickly, efficiently, and at great value.
Al-Hayat is an attractive partner for businesses that want to establish their brands in the Kurdistan Region of Iraq.