Muhtar Kent

Stewards of Some of the World’s Greatest Brands

Editors’ Note

Muhtar Kent joined The Coca-Cola Company in Atlanta in 1978 and has held a variety of marketing and operations roles throughout his career. In 1985, he was appointed General Manager of Coca-Cola Turkey and Central Asia, and from 1989 to 1995, he served as President of the company’s East Central Europe Division and Senior Vice President of Coca-Cola International. Between 1995 and 1998, Kent served as Managing Director of Coca-Cola Amatil-Europe. From 1999 until his return to The Coca-Cola Company in May 2005, he served as President and CEO of the Efes Beverage Group. Kent also served as a board member of Coca-Cola Icecek. Kent was named President and Chief Operating Officer of The Coca-Cola Company’s North Asia, Eurasia, and Middle East Group from 2005 until early 2006. Kent served as President of Coca-Cola International through most of 2006, until his appointment as President and Chief Operating Officer of The Coca-Cola Company. He became Chief Executive Officer of the company in July 2008, and Chairman of the Board of Directors in April 2009. Kent holds a bachelor of science degree in economics from Hull University, England, and a master of science degree in administrative sciences from London City University.

Company Brief

The Coca-Cola Company (www.thecoca-colacompany.com) is the world’s largest beverage company, offering consumers nearly 500 sparkling and still brands. Along with Coca-Cola®, recognized as the world’s most valuable brand, the company’s portfolio includes 12 other billion dollar brands, including Diet Coke®, Fanta®, Sprite®, Coca-Cola Zero®, vitaminwater, POWERADE®, Minute Maid® and Georgia® Coffee. Globally, it is the number one provider of sparkling beverages, juices, and juice drinks and ready-to-drink teas and coffees. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of nearly 1.6 billion servings a day.

Were you surprised at the severity and speed of the global financial crisis, and how has Coca-Cola been impacted?

The global economic crisis, while unprecedented in scale and scope, has certainly been less daunting for businesses like ours that provide affordable, high-velocity products that are a staple in consumers’ daily lives. For billions of consumers around the world, Coca-Cola and our other 500 brands remain an affordable luxury. This is a wonderful space to be in today and tomorrow.

While the global economic environment remains challenging, we are well-positioned for long-term growth. Coca-Cola continues to generate significant free cash flow, enabling the company to invest resources to win market share and position the company for future growth, including through opportunistic, niche acquisitions.

We are confident that, armed with strong brands and solid business fundamentals, our experienced management team will continue delivering against our long-term targets.

Do you feel the necessary steps have been taken to move towards a recovery?

I believe that there is still a long road to recovery – we need to see real estate stabilize and consumer psyche improve.

However, in my recent travels around the world, I have been encouraged by discussions I have had with leaders from various business and government sectors who all seem to be focused on cooperative, multilateral approaches to solving the economic crisis.

We remain cautiously optimistic about weathering this crisis, and we are preparing ourselves to come out of it stronger and more nimble than before.

How important will entrepreneurship and innovation be to economic recovery?

I believe that if the Internet revolution defined the ’90s, and the biotech revolution defined the first part of this decade, then sustainability innovations will be the defining economic and social force of the coming decade.

At The Coca-Cola Company – whether it’s coming up with new beverage ideas, new packaging, or new sustainable energy programs – we look at innovation holistically and globally. We have innovation facilities not only here in the U.S. but all around the world. I recently helped open new facilities in China, Mexico, and Brazil, for instance.

Our approach is to take the best ideas from around the world and scale them to local markets and conditions. I think this same concept of transferring innovation globally, quickly and effectively, is going to be critical in solving so many of today’s challenges.

Coca-Cola is a company with a great history and yet it has always found ways to stay fresh and innovate. How has the economic crisis sharpened your company’s keen sense of identifying opportunity?

Our business is built for times like these: through the Great Depression, World Wars I and II, numerous regional conflicts, and the energy crisis of the last century to the fragile geopolitical and economic landscape of today, The Coca-Cola Company has endured and grown.

In today’s credit-starved environment, nothing is more important than the ability to generate cash. The Coca-Cola system generates up to $50 million in cash every day.

Our fundamentally sound balance sheet has allowed us to return value to our shareowners and, today, positions us to invest in our portfolio and expand our global beverage leadership. We have made dividend payments to shareowners each year since 1920, and have increased our dividend payments annually for the past 47 years.

Our financial position enables us to maximize tremendous opportunities for our business. We are fortunate and privileged to be stewards of some of the world’s greatest brands, led by Coca-Cola and 12 other billion-dollar brands. In a world searching for optimism and good news, we are seeing people everywhere place greater value on brands and businesses that share their aspirations and make a positive difference in the world.

What do you do to keep the entrepreneurial focus sharp in a large organization like Coca-Cola?

For us as a business, an entrepreneurial focus means understanding our consumers’ needs and creating new and innovative ways to satisfy those needs. As a system, we have always been, and always will be, seeking new niche opportunities in the non-alcoholic ready-to-drink beverage category. This is our heritage. This is where we excel. This is what we do best.

Most importantly, we’ve just begun to scratch the surface of our potential. This year, people around the world will consume 1.6 billion servings of our products every day, but will also consume 50 billion servings of other beverages; that provides us with an incredible opportunity for growth.

As it relates to entrepreneurship in its truest sense, we believe that there is an opportunity for us to support small business development in the communities where we do business. For example, our Manual Distribution Center (MDC) model in Africa has created jobs, promoted entrepreneurship, and strengthened local economies. To date, the Coca-Cola system has created more than 2,600 small distribution businesses there, creating direct employment for more than 12,000 people.

Enhancing entrepreneurship and economic opportunities for developing markets will result in increased wealth, enhanced skills in business, accounting and marketing, increased profile and stature within the community, and increased economic opportunity to be applied to future jobs.

Can a company of the size and scale of Coca-Cola innovate internally or do you need to acquire or partner for the innovation?

For our company, innovation is one of the most important strategic priorities for our entire system. We believe that innovation is the commercialization of our creative pipeline: it is about aggressive investments in products, ingredients, sweeteners, packaging, and equipment.

Internally, our Research and Innovation team works to provide consumers around the world with new products, formulations, designs, and packaging. The team utilizes rigorous processes and testing to find innovative ways to provide consumers around the world with moments of refreshment and happiness.

We also introduced the Coca-Cola Freestyle™ dispenser. Freestyle uses proprietary PurePour Technology™ and has the capacity to dispense more than 100 beverages in the same amount of space as a standard eight-valve machine. In development for more than four years, the sleek, stylish units offer consumers an unprecedented assortment of branded waters, juices, and sparkling beverages, including many drinks that have never before been sold in the U.S.

In addition, we are always open to strategic partnerships and acquisitions to complement the work of our internal team. For example, in collaboration with Cargill, our company recently announced Truvia™, a unique sweetener we believe has the potential to revolutionize the beverage industry. Developed in collaboration between The Coca-Cola Company and Cargill, Truvia is a response to strong consumer demand for a great-tasting, natural, zero-calorie way to sweeten foods and beverages. This year alone, we have announced three brands with products sweetened with Truvia natural sweetener: Sprite Green™, Odwalla® Mojito Mambo™, Odwalla® Pomegranate Strawberry, and four varieties of glacéau vitaminwater10™ nutrient-enhanced water beverages. We will continue to evaluate Truvia for use in other new, naturally sweetened, reduced, low- and zero-calorie beverages in the future.

We also look at bolt-on acquisitions around the world to complement our broad and ever-expanding portfolio of over 300 products. For example, we recently announced an investment in Innocent, a company in Great Britain that produces smoothies and other dairy/juice products.

Coca-Cola has placed a major focus on sustainability and the environment. How critical is this work to the culture of Coca-Cola, and how do you engage your employees in these efforts?

Sustainability is about business continuity and opportunity. It’s about managing risks to your business – political risks, environmental risks, social risks, economic risks – while maximizing opportunity.

In terms of the environment, we know that water scarcity is a risk; that commodity scarcity is a risk; that energy scarcity is a risk. We know that we have to earn a social license to operate with the communities we serve and the consumers who reach for our brands nearly 1.6 billion times a day. We absolutely have to manage these issues every day, financial crisis or not.

In fact, we see even greater opportunities to focus on advancing our sustainability initiatives during a financial crisis, because the initiatives where we focus – water, packaging, energy, well-being – aren’t window-dressings; they are tied to our business growth and our bottom line.

Internally, our employees are guided by our 2020 Vision that is our roadmap to being a global leader in sustainable water use and an industry leader in packaging, energy, and climate protection. We encourage our employees to participate in initiatives and activities that support this vision. For example, our company annually partners with the Ocean Conservancy and its International Coastal Cleanup. Our employees around the globe participate in the activity that collects, removes, and tracks millions of pounds of litter and debris from more than 33,000 miles of shoreline in 76 countries.

The Coca-Cola Company and World Wildlife Fund (WWF) have partnered to help conserve and protect freshwater resources throughout the world. Would you highlight this partnership and the progress of these efforts?

We are delighted by the progress we’re making in our global conservation partnership with WWF. We launched our partnership in 2007 with a shared belief that solutions to today’s global challenges, like water stress and climate change, require collective action.

Today, over one billion people lack adequate access to safe drinking water and some 40 percent of the world’s population lives in an area of the world with a watershed that is under stress. By working together with partners like WWF, we believe we can truly make a difference in addressing global water challenges.

We start by focusing on managing water responsibly in our operations. With WWF, we’ve set a global goal to improve the efficiency of our water use by 20 percent be 2012.

We’re also working with WWF to encourage sustainable agriculture practices in our supply chain, with an initial focus on sugarcane.

And we’re working together to help conserve seven of the world’s most important watersheds including the Yangtze, Mekong, Danube, Rio Grande/Rio Bravo, Lake Niassa, the Mesoamerican Reef catchments and the rivers and streams of the Southeastern United States. In each of these watersheds, we’re working together to promote good management of the basins while protecting natural resources, maintaining biodiversity, and balancing conservation with development.

How important is it to have clear metrics in place to evaluate the impact of your corporate responsibility efforts?

Our company is guided by our 2020 Vision, a roadmap that brings new clarity and focus to our global business and ensures that our system is ideally positioned to make the most of the abundant opportunities before us. As part of that Vision, we have defined a clear list of metrics to track our reputation, environmental performance, and safety record.

The reporting of our corporate responsibility strategies and programs continues to be a work in progress. While we discuss initiatives and programs, as well as progress from year to year, we recognize the need to report quantifiable metrics and targets, in particular as they relate to our social performance and economic impact. Using external standards, such as the Global Reporting Initiative, helps us ask questions within our organization that are important to improving our performance.

We continue to better understand areas in which we collect and analyze data well and areas in which we continue to be challenged, and we have made significant progress in our corporate responsibility reporting since we started such reporting in 2001.

You joined Coca-Cola in 1978. Could you have imagined in the early days that you would have spent over 30 years at Coca-Cola?

I joined The Coca-Cola Company as a salesman in response to a newspaper ad and have served in roles including distribution, marketing, and logistical systems. It has been a privilege to have served all over the world for this great company for so many years.

I am most proud of the brand itself. Coca-Cola is an affordable luxury; we deliver simple moments of pleasure, for cents at a time, to consumers from all nations, from all walks of life, of all ages, and all income levels. In the course of our 120-plus year history, we’ve built some of the world’s most recognized brands, which have become synonymous with both optimism and inspiration.

I also enjoy the time I get to spend in the market interacting with our consumers. Consumers have come to love and trust our brands and turn to Coke to provide simple moments of refreshment in their daily lives.