Seven-Up’s distribution model in Nigeria is a success story that provides a template for how other supply chains across the continent can navigate poor infrastructure while cutting costs and improving services.
Businesses in Nigeria, like most African countries, have to deal with poor road infrastructure, which can be a significant hiccup for logistics and supply chain operations. The Seven-Up Bottling Company in Nigeria was no exception.
However, the company solved its delivery struggles by designing a hub-and-spoke distribution model, which reduced transportation costs, improved service to retailers, and kept products on shelves.
This story covers how the company pulled it off and how other African supply chains can do the same.
Seven-Up’s Distribution Model and Delivery Struggles in Nigeria
Seven-Up Bottling Company’s logistics process was once riddled with challenges that hit both profits and the trust of its partners, including retailers and wholesalers across major markets in the country. For instance, deliveries often took too long and cost too much.
Retailers and wholesalers often grappled with stock-outs when deliveries were delayed, while SBC’s own costs eroded profit margins. Trucks rumbled over poor roads, often empty on return trips, wasting fuel and time.
Depots suffered from inconsistent supplies. Retailers and wholesalers faced stock-outs that left shelves bare. At some point, the business operations slowed down, customers lost faith, and the Nigerian supply chain challenges kept piling up.
The numbers told the story. On-time, in-full deliveries barely reached 85 percent. Transport costs soared as depots sourced stock from faraway plants. Some areas waited days for drinks. Retailers complained. Most importantly, it was beginning to affect the company’s market share.
These operational inefficiencies translated into high distribution costs and unreliable delivery schedules, which hurt the company’s performance and its partners’ satisfaction.
Seven-Up needed a plan that worked in Nigeria’s tough terrain. One that made sense on broken roads and kept products flowing.
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Seven-Up’s Distribution Model: A Hub-and-Spoke Game-Changer
Seven-Up knew something had to change. And the solution was a hub-and-spoke distribution model in Nigeria. It’s a simple idea with powerful results. Picture a bicycle wheel. The hub sits at the center, while spokes stretch out to reach every corner.
Seven-Up applied that design to its supply chain.
They set up regional hubs, large distribution centers near key markets. These hubs pulled stock from bottling plants and stored all the products needed for each region. From each hub, spoke routes branched out to local markets.
Trucks moved on optimized routes, carried full loads, and returned quickly for the next delivery. Retailers saw trucks more often, and the stock-outs disappeared. The numbers proved the model’s strength.
Not only did the transportation cost drop, but a study showed Seven-Up could move 10,000 crates for ₦6.8 million, which was the lowest possible cost under the new system. Delivery efficiency soared to 95 percent. The products arrived on time and in full.
Why Seven-Up’s Distribution Model Worked
The hub-and-spoke distribution model in Nigeria thrived for one reason: it fit the country’s logistics reality. The roads were bad, distances were long, and Seven-Up’s old system tried to serve every market directly from the main plant, which was a waste of time, fuel, and patience.
Regional hubs changed the game. They brought products closer to customers. Trucks no longer had to travel halfway across the country for every delivery. Spoke routes let Seven-Up reach every last-mile customer, even in Nigeria’s toughest neighborhoods.
Inventory worked better, too. Instead of dozens of depots managing their own stock, sometimes with too much or too little, hubs pooled inventory and shared it wisely. Retailers got what they needed, when they needed it.
The supply chain challenges within the country did not disappear, but Seven-Up built a model that made those challenges smaller.
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Lessons from Seven-Up’s Distribution Model
African logistics networks can learn from Seven-Up’s experience. Here’s what the journey taught:
1. Network Design Cuts Costs
Planning matters a great deal, especially when dealing with infrastructural challenges. Seven-Up’s hubs made transport shorter, routes simpler, and costs lower.
African supply chains can design hubs in cities or towns where roads are better or where customers cluster. This way, businesses spend less on fuel and vehicle repairs by focusing on those hubs. It is also a great way to get rid of waste and increase profits.
2. Last-Mile Delivery Needs a Local Touch
Nigeria’s roads can break even the best trucks, and they have. However, Seven-Up was able to fix that problem by leveraging smaller vehicles, including vans, tricycles, and motorcycles. These spoke routes reached markets that big trucks couldn’t.
African supply chains can do the same. Local delivery partners know their roads and they know the safe routes, even when transporting at night. It is important to rely on their knowledge to get products to every customer.
3. Data Drives Smart Supply Chains
Seven-Up’s distribution model wasn’t just about building new warehouses closer to the markets. The company also invested in route planning, stock tracking, and real-time delivery monitoring. Every hub knew how much stock it had and where it needed to go next.
African businesses can use mobile apps or simple spreadsheets to track stock and plan routes. Every step taken with data cuts waste and boosts service.
How African Supply Chains Can Apply These Principles
Seven-Up’s distribution model wasn’t magic. It was smart planning built for Nigeria’s roads, markets, and customers. African supply chains can take the same steps.
1. Assess Your Current System
Look at your transportation costs and answer critical questions such as:
- Where are your biggest expenses?
- Which routes cost too much?
- Which depots are out of stock?
These questions will help you find the weak links.
2. Design and Leverage Regional Hubs
Build or upgrade warehouses near big markets because they reduce lead times, and trucks do not have to take on as much wear and tear. Keep enough stock there to supply local customers.
Move products from plants to hubs, then from hubs to markets. It will save time and cut fuel consumption.
3. Plan Spoke Routes That Work
Use smaller vehicles for last-mile delivery. Partner with local drivers who know the terrain. Give them predictable routes and pay them on time. Happy drivers mean happy customers.
4. Invest in Data and Tools
Use route planning software or mobile apps to track deliveries. Keep a simple dashboard of stock levels at each hub. If money is tight, start with basic tools like WhatsApp or Excel. Even small steps build better supply chains.
5. Build Partnerships
Work with other companies or 3PLs who know the roads. Share trucks if you can, and collaborate with distributors with market experience. Remember that the Seven-Up Bottling Company’s partnership with local operators made the hub-and-spoke model work.
Read more: Lessons from the Ford and Firestone supplier collapse.
Wrap Up
Seven-Up’s distribution model proved that even the toughest roads can’t stop a smart supply chain. By building regional hubs and connecting them with well-planned spokes, Seven-Up slashed costs, improved service, and made sure every shelf had a drink ready.
African logistics networks can follow that lead with clear planning, local partners, and a little technology, every business can build a supply chain that wins. When every customer finds your product, your supply chain has done its job.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
