Confirming months of industry speculation, The Coca-Cola Company today announced a restructuring of the company’s senior leadership structure that will see company president and COO James Quincey succeed Muhtar Kent as CEO, effective May 1, 2017.
In a press release issued on Friday morning, Coca-Cola confirmed the board of directors’ intention to nominate Quincey in April 2017. The longtime Coke veteran was appointed company president by Kent last August after two years at the helm of the soda giant’s Europe Group.
The announcement brings to a close Kent’s roughly seven-year run as the top boss at the world’s largest beverage company, though he will retain his role as chairman of the board of directors. The New York-born businessman served in a range of leadership roles since joining Coca-Cola in 1978, with extensive experience in international operations in Europe and Asia. Prior to his appointment as CEO in 2008, Kent served as president and COO of Coke’s North Asia, Eurasia and Middle East Group.
Industry experts have predicted a leadership change was in the works since Kent chose Quincey as the company’s new president last year during a reshuffle of Coke’s executive ranks.
“One of our Board’s key priorities is developing the next generation of leaders and James is a perfect example of our talent pipeline in action,” Kent said in the press release. “Having worked closely with James during the past 10 years of his 20-year career with our company, I know that his vast industry knowledge, expertise with our brands, values and system, coupled with an acute understanding of evolving consumer tastes, make him the ideal candidate to effectively lead our company and bottling system. James has the strategic vision and inspirational leadership to usher in the next phase of growth for our great business.”
Quincey, 51, will bring two decades’ worth of experience at Coke upon taking over the top job next year. After leaving strategy consulting firm The Kalchas Group, he joined Coca-Cola in 1996 as Director, Learning Strategy for the Latin America Group, followed by a series of administrative roles throughout the the company’s South American division, where he notably steered operations in Argentina through an acute economic crisis in the early 2000s.
After two years as president of the South Latin Division, Quincey took over as president of the Mexico Division, during which he oversaw the acquisition of billion-dollar juice brand Jugos de Valle. Following a four-year stint in charge of the Northwest Europe & Nordics Business Unit (NWEN), he was appointed president of the Europe Group in 2012 and established the division as Coke’s most profitable operating group during his three-year tenure.
“I am truly honored and humbled to lead this great company into the future,” Quincey said in the press release. “Muhtar has been a catalyst for change at The Coca-Cola Company – driving the transformation of our global bottling system, expanding our product portfolio and making sustainability a business imperative. I am committed to continuing my strong partnership with Muhtar, our talented management team and associates, and our valued bottling partners to continue this momentum and capture the enormous opportunities in front of us.”
A December 2015 article in The Wall Street Journal portrayed Quincey as a calm and straightforward leader whose style contrasted with Kent’s direct and demanding approach. Since assuming the presidency, he has begun implementing a cost-cutting initiative aimed at slashing $3 billion from the budget by 2019, as well as overseeing an acceleration of the bottler refranchising program in North America, which has been a top priority of Kent’s regime
During his time at Coca-Cola, Quincey has shown an interest in adapting to healthier beverages as carbonated soft drink sales continue to decline. He guided the purchase of a 90 percent stake in U.K.-based juice and smoothie brand Innocent in 2014, and has also been involved in a systematic portfolio reformulation aimed at reducing sugar content.
Initial reaction to the move from the business world has been positive. Though the timing was unexpected, industry experts were not surprised by Quincey’s selection as Coke’s next CEO and indicated a favorable reaction to his appointment from within the company as well as from investors. In a published memo, analysts at Morgan Stanley said Quincey would emphasize strategic changes in pricing and refranchising that would help the company.
Financial services firm Cowen and Company said it was “encouraged by the change as we have been consistently impressed by Mr. Quincey’s more transparent approach to communicating the challenges and opportunities for the company.”
Praising Quincey’s understanding and appreciation of consumer trends, Bonnie Herzog, a managing director of equity research at Wells Fargo Securities, said the incoming president’s experience in driving growth and making deals could spark a more aggressive strategy for brand acquisitions in the coming years.
Shares of Coca-Cola are up 1 percent since the announcement.