Coca-Cola Co. has shaken up its management Tuesday, replacing the heads of its Asia and Africa businesses, in the first major move by President and Chief Operating Officer James Quincey to put his stamp on the beverage giant.
Quincey, who now looks more likely than ever to succeed Coke Chief Executive Muhtar Kent, also is realigning the international structure. The company is creating a consolidated Europe, Middle East and Africa group in the latest attempt to boost profits and revenue amid sluggish soda sales.
As part of the change, Brian Smith, the company’s 60-year-old Latin America president, will be transferred to head the expanded operating group in August. Nathan Kalumbu, 52 and current president of Eurasia and Africa, will focus on projects in Africa before retiring from the company at the end of December.
John Murphy, the 54-year-old head of the South Latin division, will become president of Asia Pacific, replacing Atul Singh. Singh, 56, will transition to chairman of Asia Pacific before retiring from the company in March.
Quincey was named to his current position last August, making him Kent’s top deputy. That move had already created speculation that Quincey, 51, was in line to succeed Kent, though neither Coke nor Kent would say.
The latest personnel moves are likely to further fan speculation that had been building internally that Kent, who is 63, will officially designate Quincey his successor later this year or in early 2017.
Coke again declined Tuesday to comment on any potential succession plans and Kent, who is also chairman, hasn’t said he plans to step down any time soon. The company said Quincey recommended the structural and leadership changes with Kent’s full support.
Tuesday’s changes “will continue to lay the foundation for strong leadership and management continuity,” said Kent in a statement.
In a Q&A posted on the company’s website, Quincey said the new structure should be more efficient and that the leadership changes will bring “freshness” to markets.
“A fresh pair of eyes is a good thing; stability is also a good thing. It’s important to strike a balance between the two,” he added.
Coke reported last month its growth slowed in the first quarter, dragged down by its namesake cola, renewing questions of whether it can return to promised revenue increases in the mid-single digits. Soda volumes were flat after five straight quarters of increases, hurt by a weakening global economy and rising health concerns over sugary drinks.
Kent, who became CEO in 2008, has been delegating more decision-making to Quincey, who took a prominent role at an annual meeting with Coke bottlers in Greece earlier this month.
Quincey is elevating lieutenants from Latin America. That is where he made his initial mark at the company, becoming Argentina head in 2000 and Mexico chief in 2005 before overseeing Europe.
Smith, a 19-year company veteran, ran Brazil from 2002 to 2008 and headed Mexico until 2012 before being promoted to Latin America president in 2013.
Murphy currently heads operations in Argentina and five smaller South American countries and oversaw the company’s businesses in Central America and the Caribbean from 2008 to 2012. But the 28-year company veteran also has experience in Asia, having held earlier posts in Japan and Indonesia.
Coke is promoting Alfredo Rivera to Latin America president, succeeding Smith. Rivera has held several posts in the region since joining Coke in 1997, most recently overseeing operations in Central America, the Caribbean and Venezuela, Ecuador and Colombia.
The moves also come as Coke divests manufacturing and distribution assets in North America to focus on its more profitable concentrate business while deepening a consolidation drive among overseas bottling partners.
Coca-Cola Enterprises Inc. shareholders voted Tuesday to approve a European bottling merger, which would create the largest independent Coke bottler by sales world-wide. The merger is expected to close by this weekend and combines Coca-Cola Enterprises, which distributes Coke in the U.K. and France, with Spain’s Coca-Cola Iberian Partners and Coke’s German bottling unit. The deal was announced last summer.
The newly created Europe, Middle East and Africa operating group combines two groups, Europe and Eurasia & Africa. Coke also is combining several business units in central and Eastern Europe, in addition to tweaking its operating structure in Africa. Coke says the changes better align its business more closely with bottlers’ geographic footprints.
Source: MarketWatch
