NEW DELHI: Coca-Cola made sweeping changes to its top India management on Friday, replacing Venkatesh Kini with T Krishnakumar at the helm as it looks to revive growth after a run of sluggish quarters. The timing of the change, in the middle of the critical peak season for cola companies, was a surprise. The summer months of the April-June quarter contribute over 40 per cent to annual soft drink sales.
Krishnakumar will take over from Kini as Coca-Cola India president. He’s currently chief executive of Hindustan Coca-Cola Beverages (HCCB), the bottling arm. Christina Ruggiero will succeed Krishnakumar at HCCB, becoming the unit’s first woman CEO. She’s currently CEO for bottlers’ sales and services at Coca-Cola System (North America). The changes are effective May 1. "This is a very important period in our company's transition globally," James Murphy, president, Asia Pacific Group, told a group of reporters on Friday. Kini has been India president for three years.
The company has seen at least six quarters of low single-digit growth in what it regards as a key market. Murphy said he expected Coca-Cola to return to double-digit growth over a threeyear period, adding that non-cola beverages would contribute "significantly" to expansion.
"We believe India is one of the few markets in the world that can materially change our systems," he said.
"Our focus is to come up with more consumer-oriented businesses and a stronger total beverages portfolio, spread in multiple categories, particularly in the developing markets."
He was accompanied by Bottling Investment Group (BIG) president Irial Finan. The two executives arrived in India on Thursday to make the surprise announcement. BIG, a global Coca-Cola entity, operates the company’s bottling operations.
"The Indian market has tremendous growth potential and we believe revitalising the system leadership structure will enable us to continue consolidating India as one of the most important growth engines for the company globally," Finan said. The company’s top priority is to "create and deliver growth," Murphy said. "As outlined by our president and COO James Quincey a few weeks ago, The Coca-Cola Company is designing a new operating model to support the next stage of transformation into a growth-oriented, consumer-centred, total beverage company," he said.
The changes at the beverage firm’s sixth-largest market by volume coincide with Quincey taking over the top job from outgoing chief Muhtar Kent starting May 1, as the company looks to shore up profitability and improve its balance sheet in critical markets such as India. Murphy described slowing consumption across markets as "short-term headwinds."
SUGAR TAX
On speculation that the Indian government could levy a sugar tax on cola makers, Muphy said: "We will wait and see how the final recommendations come through (on taxation). It's no secret that we have made representations to the government and made our point of view known to the importance of having a fair approach when it comes to taxation. We are one of the largest tax payers in India in the category. We appreciate and understand very well the overall objectives of the government. But we would like to see taxation being rolled out in a fair manner so that we are not singled out."
While India is a critical market for the Atlanta-based beverage giant, consumers here have been moving away from fizzy drinks consumption to healthier beverages and scaling back discretionary expenditure. Coca-Cola has posted negative volume sales for at least four of the past nine quarters. While the company has been expanding its portfolio to include non-fizzy drinks, each of the new brands remain small.
Kini has been associated with the beverage maker for 19 years, of which the past five have been in India. He said he was returning to the US for "personal reasons" and that he is pursuing opportunities outside the company.
Vamsi Mohan, currently BIG’s regional director for Vietnam, Myanmar and Cambodia, has been named southwest Asia regional director for HCCB.
Resource: http://retail.economictimes.indiatimes.com
Resource: http://grandiose.org.in/
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