Coca-Cola ko president Muhtar Kent will become CEO on July 1, Chairman Neville Isdell said Thursday.
Isdell, 64, who took the helm at Coca-Cola in June 2004, got the board's approval for the appointment as part of what he calls "proper succession." He will remain chairman until July 2009.
Coke's lack of a solid succession plan left the company's top management in turmoil beforeo Isdell's arrival, when sales of the company's flagship soft drink and its stock price were spiralling downward. When Isdell took over, he was Coke's fourth CEO in seven years.
Since Isdell's arrival, he's improved relationships with the company's bottlers and helped lead what is beginning to look like a turnaround, with sales and stock price on the rise.
Coke's stock is up 19% since Isdell took over. In July, Coke purchased Glacéau, maker of Vitaminwater and one of the industry's fastest growing beverage brands.
Under Isdell Coke also developed stronger marketing and new products, including low-calorie beverage Coke Zero. Overall, volume is up six percent worldwide and sales are up 19% year-to-date for the company.
"One of the most important jobs a chairman and CEO has is to ensure proper succession," Isdell said Thursday. "It's generally something that's not well-managed and it's a goal I set for myself to manage it well. It should be at the core of how you manage a company. It should be a very orderly and very well thought out transition."
Kent, 55, joined Coca-Cola in 1978 and served in a variety of positions until 1998, when he left to become president and CEO of Efes Beverage Group, one of Europe's largest international beverage businesses.
He returned to Coca-Cola in May 2005 as president of the North Asia, Eurasia and Middle East Group. He was named president of Coca-Cola International in January 2006 and appointed president and chief operating officer of the company in December 2006. He helped spearhead the Glacéau acquisition.
"We are gaining traction in our growth agenda," Kent said. "We have a portfolio of brands that are (growing) but the most important thing that's back is the belief of winning. We've done a lot of work over the last 12 months to become faster, more nimble and more flexible."
Next on Kent's agenda is to breed the next generation of management. "We need to come up with next generation of Coca-Cola leaders."
Kent has been seen as Isdell's successor since he returned to Coke. He has worked with Isdell on and off for nearly 20 years.
"We've worked extremely well together," Isdell said. Announcing the succession plan early "means that we're doing this in a disciplined way without disruption to the business."
John Sicher, an industry expert and editor and publisher of Beverage Digest, said naming Kent as Isdell's successor is a positive move.
"He understands the company and the system literally as well as anybody in the world and better than most," Sicher said.
Sicher added, however, that business challenges lie ahead for Coca-Cola and Kent, particularly in the company's key North American market.
"I think the big challenge for Muhtar is unlocking or trying to figure out how to get North America back into a stronger growth mode," Sicher said. "That hasn't happened yet, and that needs to be the top of Muhtar's priority list."