PRIMARY SUPPLIERS
What is the 2nd Tier Supplier Program?
Because of new business strategies in supply chain management, many procurement opportunities are managed by our major business partners or prime suppliers. Acknowledging that we have limited opportunities available for small businesses, we have developed the 2nd Tier Supplier Program, which is a partnership between Coca-Cola and our prime suppliers. We request that prime suppliers subcontract a portion of their Coca-Cola contracts with minority and women business enterprises (MWBEs) or 2nd tier suppliers.

As a result of the efforts of our 2nd Tier Supplier Program, many of our prime suppliers have embraced supplier diversity as a business imperative. Some of our prime suppliers include: Spherion, Jones Lang LaSalle, IBM, Ogilvy & Mather, IMI Cornelius, and Prudential.

Our goal for our 2nd Tier Supplier Program is to ensure a diverse supplier pool across our supply chain and to increase our utilization of MWBEs in our business through our prime suppliers.

Expectations for 1st Tier Suppliers:

• To engage in 2nd tier arrangements with qualified MWBEs for all Coca-Cola
  projects and contracts.
• Work with your relationship manager and supplier diversity team at Coca-Cola
  and develop 2nd tier spend targets and actions plans.
• Identify opportunities and quick wins and engage qualified and certified MWBEs
  immediately.
• Recognize staff and suppliers for their high performance in supplier diversity.
• Report supplier diversity results to Coca-Cola quarterly via our online reporting
  tool.

Reporting 2nd tier to The Coca-Cola Company.
We request our prime suppliers report only direct 2nd tier spend to us on a quarterly basis. Using our online reporting tool, prime suppliers can enter spend data that will be consolidated into a system generated report. To access the online reporting form, you will need to request a login ID and password by contacting Ingrid Watkins at supplierdiversity@na.ko.com . Once you receive your access information, to submit your spend report, please access our website (www.coke.net/supplierdiversity), click on the “primary supplier” link, then click on the “log in” link at the top of this page.

Direct 2nd tier spend:
According to National Minority Supplier Development Council (NMSDC), 2nd tier spend with MWBEs can be indirect or direct.

The indirect method calculates the 2nd tier spend by prorating the prime supplier's company-wide MWBE spend with the percentage of its total business represented by the customer company's business. (For example, if the prime supplier spends $100 million annually with MWBEs and a particular customer represents 1% of its total business, the 2nd tier spend would be $1 million ($100 million x 1%). Using this method, one may not be able to trace back the spend to a specific MWBE.

The direct method is to engage MWBEs directly on the customer's contract and report to the customer only the amount paid to these specific MWBEs. Therefore, each 2nd tier dollar can be traced back to a specific MWBE and to a specific task on the project.

We encourage our prime suppliers to engage more MWBEs in their businesses, however, we only report direct 2nd tier spend. Seeking direct 2nd tier engagement enables our prime suppliers to proactively identify and create more opportunities for MWBEs. Additionally, a direct 2nd tier program enables us to reach more MWBEs and have bigger impact in the local communities.