Soda dynasty blends new and nostalgic for potent business mix

Soda dynasty blends new and nostalgic for potent business mix

Uludağ Board Chairman Mehmet Erbak (R), General Manager Mete Öz (C) and Director of Sales Ömer Kızıl. (Photo: Today's Zaman)

June 29, 2012, Friday/ 18:23:00/ NOAH BLASER | BURSA

What ingredients go into a running a successful domestic soda company against fierce competition from dozens of international rivals?

For Bursa-based soda maker Uludağ Beverages, the key ingredients include a long-time taste for innovation and a careful cultivation of the brand's nostalgic past. Of course, it also helps to have a sprawling ancestral estate high up in the Bursa mountains, where the company sources its water from choicest of mountain springs. Long seclusive in its mountain retreat, the company gave a rare tour to journalists this week of its valley home and newer facilities near Bursa, hoping to show off just what has made the company one of the fastest growing beverage makers in Turkey.

“It hasn't been easy to come from zero to this,” Uludağ board chairman Mehmet erbak says of his family's 20,000 square meter facility in Yenice near Bursa, which sports a lime green roof and is ringed by brightly painted fiberglass cows. “But we've always gone forward believing in the future, and in innovation.” Erbak, the company's grand old man and long-time head, recalls a time when the company was one of 2,000 small-scale producers of spring water and gazoz, a carbonated sugar drink that has long been a hallmark of the Turkish soda industry. From its humble beginnings in 1930, the company this year is expected to make a total revenue in excess of 250 million TL, 40 million of which comes from Uludağ's rapidly expanding exports.

The sheer volume of production at the Yenice facility, which can produce 62,000 'family-sized' plastic bottles and 36,000 aluminum cans worth of drinks per hour, says Mehmet, is just one reason for the company's growing profits, which are up nearly 25% from last year. “We've always been a market leader, says Erbak, pointing to the cluttered walls of family and company photos in the factory's reception room. “Who was the first company to bring cola to Turkey? We were. We introduced a brand called 'Nuri Cola' in 1956, because we knew Coca Cola was coming, and we wanted the market first.” Erbak points to a photo of two chrome-trimmed Chevy trucks unloading in an ivy encrusted alleyway in Bursa, their sides painted with adds for 'Nuri Cola' and their beds brimming with crates of the stuff. “These days cola isn't a big product for us, but the spirit was right,” he says. Later, in the 80s, he says, “we, not a foreign company, were the first to bring the aluminum can to Turkey. People thought it wouldn’t work, but it was a huge success, we knew it was the right decision to always innovate.”

Some things haven't changed, however, including he company's original logo and original bottle, a glass time capsule straight out of the 30s and 40s-era ads plastered on walls throughout the factory. Today, that mix of innovation and nostalgia has paid off handsomely: it created the market for -- and commands 70% of -- the bottled lemonade in Turkey, has become number one in the fruit drink market with its “Frutti” brand of carbonated fruit drinks, and is the number two maker of gazoz. Cola is the only slice of the Turkish beverage market into which Uludağ doesn't have plans to expand. “We don't need a direct challenger to Cola, we believe our other products are becoming a serious challenge in their own right,” says director of sales Ömer Kızıl. Kızıl offers the example of Uludağ's newest product, Uludağ premium, the first sparkling water to be sold in Turkey. “We find and explore new markets, that's where the most opportunities are.”

Exports and innovation

The day was to include many smocks-and-socks tours of Uludağ's pristine facilities. In between two rows of polished aluminum vats and machinery, Kızıl explains the company's plans to become the first serious Turkish beverage exporter. “In Germany our gazoz has become extremely popular, while in Iraq our 'Frutti' line has become one of the most popular drinks in the country. We export to 40 countries right now, but we see serious growth in Germany on one hand, and in Iraq and Africa on the other. Iraq has become such a large market that we're going to start national TV ads there soon.” That expansion has ridden on the company's investments in high technology, which have greatly streamlined its production. “We look at makers all around the world as our rivals, and we don't want to have any technological handicaps,” he says. A machine behind him whisks along a blurry stream of green soda bottles, which a nearby computer panel says are being turned out at a rate of 59,000 bottles an hour. A nearby employee declares that only four workers are required to supervise the whole process.

Elsewhere in the factory, computers monitor and tell employees when vats need to be emptied or cleaned, and valves open and close autonomously. A new packing robot from Atlanta stacks thousands of bottles neatly on a palate, while another Saran wraps the several-ton delivery in minutes. Between its two Bursa factories and five warehouses in Istanbul, Ankara, Izmir and Bursa, Uludağ employs 650 people.

Old roots for a new company

Uludağ has always been a family owned company, and because its history is also family history, its every step has been preserved meticulously over the decades. At the company's original factory high in a Bursa valley, two fascinating artifacts of that history are on display. The first is a 1912 contract from Sultan Mehmet V, which personally authorizes Erbak's great grandfather to start a mineral water bottling company, the predecessor of today's Uludağ. Below it, a yellowing letter from the “newly proclaimed Turkish Republic” authorizes the company to continue its operations in 1931. It is signed by a “Gazi Mustafa Kemal” in simple cursive writing, three years before the surname law transformed the Turkish founder's signature into “K. Ataturk.” Erbak is quick to remember how much Turkey has changed since his childhood. “My father used to make the trip up here from town on donkey. Until the '70s, bottles, soda, the whole operation went up and down on donkeys!” he says with a laugh.

Erbak asserts, however, that “some things about the past are worth keeping” in modern business. “Unlike most of our competitors, we still use real crystal sugar, we know fructose is at least 20 percent cheaper, but we know there are health complications so we do it the old-fashioned way.” That mix of old and new, he quips, is what will help Uludağ continue to expand, putting any rivals in its carbonated wake.

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