There was one quote that impacted me more than any other in the profile of Coke CEO Muhtar Kent that The Wall Street Journal ran on March 18th. It occurred during a section about a planned meeting Coke was supposed to have in Silicon Valley with the likes of Google, Facebook and other high-tech companies.
Of course, it piqued my interest when I read that sentence to begin with. Such meetings, after all, don’t happen very frequently in the beverage industry. While this industry is—slowly—changing, I think most observers would agree that it won’t win many awards for being on the cutting edge of technology. Sure, there are examples here and there of beverage companies that are embracing the latest technology—whether it comes to production, marketing, packaging what have you—but rarely these days are we being blown away by a technological breakthrough that we watched first emerge from the beverage industry. Usually, it tends to be the other way around. We in beverage borrow a lot from other industries.
Anyway, back to the quote. During the section on the meeting we learn that it ended up being canceled because Kent thought it more important that his people focus “on quarterly results instead.” The article then continues, “In an interview, Mr. Kent explained his logic. Coke needs to equip itself with the “right technology,” he said. “But we can’t, you know, go and dream in La-La land.”
If Coke fails to turn itself around, I think such, what I’ll label, short-term thinking, may have a lot to do with it.
I read the Journal article having recently come back from what I guess could also be considered La-La Land—Los Angeles, after having attended the Natural Products Expo West. Yes, I will admit, some of the things I saw at the Expo were a bit ‘out there,’ but the immensity and excitement of this trade show is simply without compare in the beverage industry today. Heck, it even had mega-movie-stars pitching beverages!
There is just no doubt that the beverages at Expo West, and there were plenty of them, are trendsetting and positioned where many of the younger, up-and-coming consumers are today: natural, transparent, healthy—and young. In fact many of the beverages at Expo West were either founded by young entrepreneurs or are brand new inventions of industry veterans who can see which way the wind is blowing.
Does Muhtar Kent see which way the wind is blowing? Well, he scores points for in 2011 going ahead and finishing the purchase of all of Honest Tea, a company I consider one of the most forward thinking in the beverage business today. But the “La-La Land” comment is reason to be concerned, especially when placed into context about focusing on next quarter’s sales possibly at the risk of losing sight of the bigger picture, as the Journal article so correctly suggests.