Coca-Cola won’t rule out future bolt-on acquisitions or expansion into alcohol, though the latter “doesn’t make sense” at this moment in time, according to CEO James Quincey.
Quincey was talking to broadcaster CNBC at Coca-Cola’s first investor day for eight years, in which the soft drinks giant reaffirmed its full-year guidance.
As well as saying that Coca-Cola would continue to chase bolt-on acquisitions, Quincey addressed speculation that Coca-Cola might expand into alcohol mixers or even alcoholic drinks in an effort to drive further growth.
“Philosophically, I never say never about most things, but the way I look at it there’s just so much more we already have strength and capability in [that] it just doesn’t make sense to do that next,” he told CNBC. “It makes more sense to do things that are more synergistic with your consumers and your capabilities as a company and a system.”
Quincey wouldn’t be drawn on whether Coca-Cola might increase its stake in Monster Beverage – currently 16.7% – or even buy the energy drink maker outright.
But he outlined three areas of focus that would continue to drive Coca-Cola’s growth strategy, including mergers and acquisitions, in the coming years.
He continued: “Whether it’s a bolt-on or it’s anything transformational, it’s always got to obey three criteria: there’s a strategic fit, there’s a logic strategically, and the numbers financially add up, and there’s opportunity. It takes two to tango.”
Coke last made a move for Anheuser-Busch’s stake in its Coca-Cola Beverages Africa joint venture as part of AB’s sell-off of assets related to its merger with SABMiller.
At the time, the company said it would look to refranchise the territory – worth more than $3 billion – among its existing bottlers.
That was preceded in September by a €10 million move Coca-Cola HBC’s stake in Lithuanian water company Neptuno Vandenys.
As critical of sugar taxes as ever, Quincey also told CNBC: “When we can take action, we absolutely have the responsibility to do so, but we believe that solving the obesity crisis, which does need to be solved, will require a much broader response from private companies and the government rather than thinking a narrow tax is going to solve it.”
Quincey took over from Muhtar Kent as CEO of Coca-Cola in May and quickly set about transforming the company with a view to more resilient growth, including shaking up his management team earlier in the year.
In October, Coca-Cola North America president Sandy Douglas announced he would retire as the company neared completion on a decade-long refranchising effort for its North American business.
Cargill will appoint Brian Sikes as its president and chief executive officer on 1 January 2023. The soon-to-be CEO, currently holding the chief operating officer title, has worked at Cargill for 31 years. Dave MacLennan, who has served as Cargill’s CEO since 2013, will assume the role of executive chair of the company’s board of directors.
Comforting colors, feel-good flavors, and unique food and beverage experiences will resonate most with consumers in the new year, according to ADM’s latest Flavor and Color Outlook. ADM anticipates that 2023 will be the year of self-expression, and the company identified four trends that are sure to stand out.
Nestlé’s Nespresso brand will pilot home-compostable coffee capsules on the Nespresso Original system in France and Switzerland from spring 2023 before further launches in several other European countries within a year. The paper-based capsules are touted as a breakthrough in packaging technology after three years of R&D.