Q&A / MUHTAR KENT: Coke chief knows lessons of hard times

Muhtar Kent stepped up to the CEO position at Atlanta-based Coca-Cola Co. in July, just as the U.S. financial crisis was widening.

Kent’s ascent to the top, though, had been in the works for more than a year. He was named president and chief operating officer, the No. 2 post, in late 2006.

Kent, 55, began his career at Coca-Cola in 1978. He spent much of his career in Coca-Cola’s international operations. From 1999 to 2005, he also was president and CEO of the Efes Beverage Group, the majority shareholder of Turkish bottler Coca-Cola Icecek, before returning to Coca-Cola.

In an interview last week with the AJC, Kent talked about the issues facing Coca-Cola and its bottlers. Here are edited excerpts from the interview:

Q: You became CEO just a few months ago, but you’ve faced economic downturns before in your career in Turkey, Russia and Latin America. What did you learn from those experiences that you’ll apply now that you’re CEO?

A: Firstly, the bad news passes with great speed. And if you’re not ready, every day taking action, you’ll be left behind on the platform. Things change with great rapidity. As this crisis came with rapidity, we’ll come out of it with great rapidity.

The second lesson is never stop communicating with the consumer. The third lesson is to do things that would have otherwise been difficult to do in a noncrisis environment. It’s an alibi to get cultural changes.

The fourth thing I’ve learned is that you can do a lot with your cash. We are a cash business. We generate with our bottler billions of dollars in cash every year. In a crisis, cash is king. We need to leverage that fantastic thing that we have called cash.

Q: How does an economic downturn affect Coca-Cola and its products?

A: We haven’t had experience, global experience, that would suggest that in downturns, when people feel worse about their future, that they will necessarily shift from one [beverage] category to another. We haven’t seen a trend.

But they will shift their behavior in how they consume, when they consume, in what container they consume. They will eat out less. They will be out spending money less. They will spend more time at home.

Therefore, they will consume more packages and beverages at home as a percent of the total beverages they consume vs. in normal times.

Q: So will Coca-Cola place a greater emphasis on take-home sales at grocery stores and supermarkets?

A: I wouldn’t call it more emphasis, but we will offer more choices to the consumer for home. More value, more choice, but also while we offer the choice that will mean that we will try also to enhance our margins as that choice gets into the mix.

Q: Are Coca-Cola and CCE [Coca-Cola Enterprises, Coke’s largest bottler] on the same page for 2009?

A: We and CCE are totally aligned in the way we are working toward our ‘09 plans. … With the addition of Steve Cahillane to the team of CCE [as head of CCE’s North American Group], I think he and his team are working very closely with Sandy Douglas [head of Coca-Cola North America] and his team on all levels of the organization.

Q: PepsiCo recently announced it would launch a new marketing campaign to reinvigorate carbonated soft-drink, or sparkling, beverages. How does that affect Coca-Cola?

A: We’ve been talking about the need for growing sparkling for three years. So I’m really happy that there’s going to be renewed interest in the category. I welcome it.