Via Beverage World: Take a moment to consider these numbers: Consumers throughout the world enjoy 1.7 billion servings of Coca-Cola beverage products every day and Coca-Cola is served nearly 200 million times a day in North America. At the very bottom of The Coca-Cola Company’s website home page, there is a constantly scrolling number and in the space of a minute, the number goes up by 1 million—marking the number of people enjoying Coca-Cola products so far that day. The numbers are staggering, yet behind the numbers there’s a story about a soft drink concocted 125 years ago in Atlanta and the global momentum behind that brand that built a beverage empire. On May 8, The Coca-Cola Company officially celebrated a milestone for the Coca-Cola brand and Beverage World’s February 2011 issue offered a look back at Coke’s 125-year history. While the Coca-Cola Company leadership is proud of the brand’s heritage, it is using this historic moment to focus on where Coca-Cola is headed rather than where it has been.
Last year was momentous for The Coca-Cola Company as it began executing one of the largest vertical integrations in US history after its acquisition of Coca-Cola Enterprises’ North American business, which, at the time of the deal, had been its largest bottler. The move is in line with the company’s 2020 Vision, announced in 2009, and was designed to help Coca-Cola sustainably grow volume, profit and share while creating an integrated and efficient supply chain combining manufacturing, sales and distribution throughout North America.
CEO and chairman of the Board Muhtar Kent is steering the company toward its next level of performance, guided by this 2020 Vision and the idea that the company’s journey is just beginning. A 33-year veteran of the Coke system, Kent was tapped to succeed Neville Isdell as CEO in 2008. He took a break from the anniversary celebrations to discuss the company’s bold plans to double its business by 2020 and how it plans to get there.
Beverage World: What are the biggest challenges facing The Coca-Cola Company and how will you face those challenges?
Muhtar Kent: The global economic crisis, of course, continues to challenge most companies. There is still a long road to recovery. But it’s important to remember that globally not everyone is affected the same way.
We are continuing to invest aggressively with our bottling partners in our portfolio to build volume and value share for the long-term. We are more resilient than most other consumer package goods companies and are continuously evaluating our strategic plans to ensure that resources are allocated toward the most important brand building and growth drivers within our business.
We are confident we will overcome these challenges as we have a strong foundation, consistent set of strategic priorities and alignment with our invaluable bottling partners, which were all drivers of our continued success this past year. Our growth strategy leverages global scale, product diversity, strong financial condition and unparalleled brand strength.
We also have a tremendous opportunity ahead of us this year as we celebrate the 125th anniversary of Coca-Cola. We want to take the lessons that we have learned from 125 years of engagement and partnership and then build on some of the fresh ideas and new approaches that are critically needed to accelerate sustainable global economic growth and job creation, stimulate innovation and advance human welfare.
BW: What drove the company’s decision to buy Coca-Cola Enterprises’ North American operations?
MK: The North America market is fundamentally unique from how we operate around the world—from the terms of bottler agreements, dis-contiguous franchise territories and separation of both fountain and finished goods production. The structure of our North American business remained essentially the same since CCE was founded in 1986. Since that time, fundamental industry forces dramatically altered the consumer, customer and competitive landscape. This required an evolved North America business model to enable the next era of winning for the Coca-Cola system.
BW: How is the transition progressing?
MK: Our thoughtful and disciplined planning efforts enabled us to execute a seamless integration once the transaction closed in October. Our new operating structure and leadership teams are well in place. I’m pleased with the progress we’ve made so far, but this is a significant integration that will require intense focus over the coming months to ensure that we can maximize and leverage the benefits of the new organization. As we move forward with integrating our marketing and distribution, we will redefine our operating model to best serve the unique needs of our flagship market and accelerate our ability to capture financial and operational improvements.
One of my biggest concerns was how the integration might disrupt the business, but I have been pleased with the focus, intensity and discipline that our leadership team and all of our associates in North America are bringing to this work. Amid this huge effort, our North America Group delivered positive organic growth for each of the last three quarters of 2010.
BW: What is the strategic vision for the future of Coca-Cola Refreshments (CCR), looking ahead perhaps five years?
MK: As I said, we have only just begun this journey and we have significant work ahead to ensure this becomes the best system it can be. Longer term, we believe the transaction will not only enable us to drive an optimized business system and best serve the North American customer and consumer, but it will also increase cash flow returns by investing capital in a more efficient system.
It is too early to speculate on what the endgame will look like for CCR as we are only a few months into this integration. Our main priority at this time is ensuring that the integration works—and works well—as quickly as possible.
BW: Where do you see the company 20 years from now?
MK: The world is changing all around us. To ensure our business will continue to thrive over the next 10 years and beyond, we are looking ahead to understand the trends and forces that will shape our industry in the future. That is why we created our 2020 Vision—the framework for our Roadmap.
Our 2020 Vision creates a long-term destination for us to be able to double our business by 2020. It provides us with business goals that outline what we need to accomplish with our global bottling partners in order to continue winning in the marketplace and achieving sustainable, quality growth. I see us playing a meaningful role in creating sustainable communities in every one of the 206 countries where we proudly operate. For each goal, we have a set of guiding principles and strategies for winning throughout the entire Coca-Cola system: People, being a great place to work where people are inspired; Portfolio, having a portfolio of top quality, leading non-alcoholic beverage brands that anticipate and satisfy people’s desires and needs; Partners, nurturing a winning network of customers and suppliers, Planet, being a responsible citizen that makes a difference by helping build and support sustainable communities; Profit and productivity, which means being a highly effective, lean and fast-moving organization.
We have ambitious goals. We plan to double our business by 2020, accomplishing in nine years what we did in the first 125.
While we continue to be inspired by our past, there is nothing nostalgic about our 125th anniversary. It’s about forging ahead, not looking back. The fact that we are a thriving business after 125 years is a testament to our youth, not our age.
BW: What would you like your legacy to be?
MK: To be honest, I don’t think about my legacy. It has been my good fortune to work for an incredibly dynamic and unique commercial enterprise —a business that is celebrating its 125th anniversary and has just begun to achieve its potential. It is an incredible responsibility and one that I am honored and humbled to have.
I’m also very fortunate to play a role in stewarding such a wonderful brand like Coca-Cola and the rest of our broad portfolio. We deliver simple moments of pleasure, for cents at a time. In the course of our 125-year history, we’ve built some of the world’s most recognized brands, which have become synonymous with both optimism and inspiration.
This is all something that is much bigger than me—it is the legacy of our great brand. http://www.beverageworld.com/index.php?option=com_content&view=article&id=39164&catid=34&Itemid=100001
Muhtar Kent: The global economic crisis, of course, continues to challenge most companies. There is still a long road to recovery. But it’s important to remember that globally not everyone is affected the same way.
We are continuing to invest aggressively with our bottling partners in our portfolio to build volume and value share for the long-term. We are more resilient than most other consumer package goods companies and are continuously evaluating our strategic plans to ensure that resources are allocated toward the most important brand building and growth drivers within our business.
We are confident we will overcome these challenges as we have a strong foundation, consistent set of strategic priorities and alignment with our invaluable bottling partners, which were all drivers of our continued success this past year. Our growth strategy leverages global scale, product diversity, strong financial condition and unparalleled brand strength.
We also have a tremendous opportunity ahead of us this year as we celebrate the 125th anniversary of Coca-Cola. We want to take the lessons that we have learned from 125 years of engagement and partnership and then build on some of the fresh ideas and new approaches that are critically needed to accelerate sustainable global economic growth and job creation, stimulate innovation and advance human welfare.
BW: What drove the company’s decision to buy Coca-Cola Enterprises’ North American operations?
MK: The North America market is fundamentally unique from how we operate around the world—from the terms of bottler agreements, dis-contiguous franchise territories and separation of both fountain and finished goods production. The structure of our North American business remained essentially the same since CCE was founded in 1986. Since that time, fundamental industry forces dramatically altered the consumer, customer and competitive landscape. This required an evolved North America business model to enable the next era of winning for the Coca-Cola system.
BW: How is the transition progressing? MK: Our thoughtful and disciplined planning efforts enabled us to execute a seamless integration once the transaction closed in October. Our new operating structure and leadership teams are well in place. I’m pleased with the progress we’ve made so far, but this is a significant integration that will require intense focus over the coming months to ensure that we can maximize and leverage the benefits of the new organization. As we move forward with integrating our marketing and distribution, we will redefine our operating model to best serve the unique needs of our flagship market and accelerate our ability to capture financial and operational improvements.
One of my biggest concerns was how the integration might disrupt the business, but I have been pleased with the focus, intensity and discipline that our leadership team and all of our associates in North America are bringing to this work. Amid this huge effort, our North America Group delivered positive organic growth for each of the last three quarters of 2010.
BW: What is the strategic vision for the future of Coca-Cola Refreshments (CCR), looking ahead perhaps five years?
MK: As I said, we have only just begun this journey and we have significant work ahead to ensure this becomes the best system it can be. Longer term, we believe the transaction will not only enable us to drive an optimized business system and best serve the North American customer and consumer, but it will also increase cash flow returns by investing capital in a more efficient system.
It is too early to speculate on what the endgame will look like for CCR as we are only a few months into this integration. Our main priority at this time is ensuring that the integration works—and works well—as quickly as possible.
BW: Where do you see the company 20 years from now?
MK: The world is changing all around us. To ensure our business will continue to thrive over the next 10 years and beyond, we are looking ahead to understand the trends and forces that will shape our industry in the future. That is why we created our 2020 Vision—the framework for our Roadmap.
Our 2020 Vision creates a long-term destination for us to be able to double our business by 2020. It provides us with business goals that outline what we need to accomplish with our global bottling partners in order to continue winning in the marketplace and achieving sustainable, quality growth. I see us playing a meaningful role in creating sustainable communities in every one of the 206 countries where we proudly operate. For each goal, we have a set of guiding principles and strategies for winning throughout the entire Coca-Cola system: People, being a great place to work where people are inspired; Portfolio, having a portfolio of top quality, leading non-alcoholic beverage brands that anticipate and satisfy people’s desires and needs; Partners, nurturing a winning network of customers and suppliers, Planet, being a responsible citizen that makes a difference by helping build and support sustainable communities; Profit and productivity, which means being a highly effective, lean and fast-moving organization.
We have ambitious goals. We plan to double our business by 2020, accomplishing in nine years what we did in the first 125.
While we continue to be inspired by our past, there is nothing nostalgic about our 125th anniversary. It’s about forging ahead, not looking back. The fact that we are a thriving business after 125 years is a testament to our youth, not our age.
BW: What would you like your legacy to be?
MK: To be honest, I don’t think about my legacy. It has been my good fortune to work for an incredibly dynamic and unique commercial enterprise —a business that is celebrating its 125th anniversary and has just begun to achieve its potential. It is an incredible responsibility and one that I am honored and humbled to have.
I’m also very fortunate to play a role in stewarding such a wonderful brand like Coca-Cola and the rest of our broad portfolio. We deliver simple moments of pleasure, for cents at a time. In the course of our 125-year history, we’ve built some of the world’s most recognized brands, which have become synonymous with both optimism and inspiration.
This is all something that is much bigger than me—it is the legacy of our great brand. http://www.beverageworld.com/index.php?option=com_content&view=article&id=39164&catid=34&Itemid=100001
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