James Quincey is hoping his radical surgery can turn a sleeping giant into a nimble, risk-taking goliath
James Quincey walks into the “Tomorrow Room” at Coca-Cola’s headquarters in Atlanta. He’s surrounded by prototype Coke products. There is an Arctic Coke fridge that can turn any drink into a half-frozen slushie in 30 seconds (if you really must). A Dasani water machine knows your favourite flavour as you approach it, thanks to a Bluetooth-enabled app on your smartphone, and dispenses a cup.
“This wouldn’t have happened five years ago,” the company’s first British boss says, gesturing to all the prototypes. “There was this culture of secrecy. We need to be open.”
Quincey, 52, is shaking up Coke from top to bottom, to make it less buttoned up and more creative and nimble. It’s not just the toys that are new. He has erased the previous top team, Kim Jong-un-style, and appointed new executives to reinforce and drive forward his cultural revolution. His most controversial move has been to axe the post of chief marketing officer — at the world’s most celebrated marketing firm. “Cretinous,” critics say.
Not even the smallest details have escaped his attention. He has changed the colour of the paint on the walls of the head office — crisp white, not bland, corporate cream — and the dress code. Jeans are OK, even for the chief executive. “I have a collection: Diesel, True Religion, Quiksilver and Brioni.” Part skater-boy, part Eurotrash? “Skater-boy sounds better.”
Why the sudden rush to change so much, so fast, I ask. “We were too slow and cautious. The world is moving fast. We need to go out with prototypes — a bit more like the tech world — and see if they work and, if they don’t, change them or kill them. Kill the zombies!”
He’s right. Consumers’ tastes are changing faster than Coke is coming up with new products to satisfy them. Water, coconut drinks, juices, iced teas, protein shakes, often with healthy ingredients — not fizzy pop — are where the growth lies in mature markets, such as the UK and America.
His predecessor, Muhtar Kent, spent too long trying to use fizz to put the fizz back into Coke. The feeling was “Coke was first, second and third”, Quincey says, which “constrained” the firm. Employees weren’t even allowed to say that Coke was not their favourite drink in the company’s vast portfolio.
The missteps of the business are reflected in its share price. It has risen 23% over the past five years. Arch-rival PepsiCo has gained 69% over the same period. Analysts say the gap is “woeful”.
To uncover new products and seize a bigger chunk of a soft drinks market that is growing 4% a year, and will be worth an extra $150bn (£113bn) by 2020, Quincey has set up an innovation council that meets every quarter to think very “strange” un-Coke-like thoughts. Such as? “Drinkable vinegar,” he replies. Rather him than me.
He has also established a Venturing & Emerging Brands unit which acts as a private equity-style investor and incubator to find hot new drinks and buy into them. The idea is to repeat the success he had when he was running the UK business in 2009 and decided to buy the Innocent drinks brand. It has gone on to become Europe’s leading chilled juice and smoothies business.
He is introducing other new products at a clip. Many include organic or local ingredients. In the southern US states you can get Coke flavoured with Georgia peaches. In Japan, Coke comes with coffee, for those who want even more caffeine. Also on shelves are green teas, protein shakes, Fairlife-branded milk shakes, yoghurt drinks — and Coke with added fibre. The latter sounds foul.
Quincey argues that Coke has also failed to change its advertising model to suit the new digital age. Its traditional TV spots don’t work so well at a time when fewer people watch TV. That’s why he scrapped the post of chief marketing officer in May.
“It’s not enough just to have the department that does ‘the advertising’. It’s an old, 20th-century model. In the 21st century, you have to connect all the new ways to market — TV ads, ads for the digital world, social media, ecommerce, design, story-telling, packaging. We’ve given all these to a new chief growth officer, Francisco Crespo. I got some flak. I may turn out to be a cretin, but we’ll find out.”
Coca-Cola, the world’s largest beverage maker with a market value of $196bn and 4,000 employees Britain, is also battling to find fresh ways to tempt consumers to buy new products online, as visits to supermarkets and grocery stores fall. Quincey is working with supermarkets and Amazon to create new meal kits, pairing Coke with tacos and burgers, that can be ordered online.
Being an outsider makes it easier to drive through change. Quincey was born in London in 1965. He lived in Hanover, New Hampshire, for three years after his father got a job as a lecturer in biochemistry at Dartmouth College. The family moved back to Birmingham when he was five, and he decided to support Aston Villa. “They’ve gone down ever since.”
He went to King Edward’s School, then studied electronic engineering at Liverpool University. “I thought electronics were the future. It turned out making semiconductors wasn’t my thing.”
After a summer job in the oil industry, he joined Bain & Co management consultants, where he worked on Diageo’s whisky brands and DHL. He moved to Coca-Cola in 1996 and worked in Buenos Aires and Mexico City, until he was made president of the Northwest Europe and Nordics division in 2008.
In 2013, he became head of Europe for the company, before being promoted to chief operating officer and president. He was named Coke chief executive in December last year and took up the role in May when Kent retired.
Quincey may be a denim-wearing “call me James” type, but he has a ruthless streak. He has axed 1,200 corporate jobs — 20% of the company’s corporate staff. He is selling off most of its bottling operations to focus on the more profitable concentrate business, a process that by next year will leave Coca-Cola with fewer than 40,000 global employees, down from 150,000 in 2012.
Slimming down and becoming more profitable is not only designed to boost profits. It will help to reduce the chances of a takeover bid. Kraft Heinz’s recent attempt to swallow Unilever shows that no company is too big to buy. Analysts speculate that Anheuser-Busch InBev could mount a bid.
Quincey is trying to reform Coke at a rough time. Soft-drinks makers, especially those whose classic products are laden with sugar, are being attacked by health campaigners, notably TV chef Jamie Oliver.
Next year the British government will introduce a tax on soft drinks that contain added sugar. Some US cities are doing the same.
Quincey says Coke, like many soft drinks firms, was slow to wake up to the need to change. Its initial strategy to deflect blame by telling consumers there was lots of sugar in other goods or urging them to get more exercise was “a mistake . . . consumers don’t want to be lectured.
“If there’s a problem, you have to be in favour of something that is likely to lead to a solution, not against everything.”
He overturned opposition to traffic- light warning labels on UK products. He also introduced smaller packages and more sugar-free Cokes. More than half the Cokes sold in Britain now are sugar- free, the first market in which that has happened.
With a record like that, surely he must now accept that a soda tax is the next step to tackling the obesity and diabetes crisis? Er, no.
“Does taxation reduce obesity?” Quincey reformulates the question. “When you look at the places where it has been implemented it’s not what happened.”
Independent studies show, he says, that when soda taxes are introduced, soda sales fall but consumers then choose substitutes that are often higher in calories, worsening obesity. “The total calorie consumption goes up!” Many will dismiss that as a convenient fiction.
Thirty-two years ago Coke did one of the dumbest things any big company has ever done. It changed the formula for classic Coke and rebranded it New Coke. It flopped so badly it was abandoned within weeks.
Quincey is introducing a new Coke of his own and this time it’s the entire company he’s reformulating.
“New new Coke is launching,” he chuckles, enjoying the irony. Will the outcome be the same? “I hope not.”
The life of James Quincey
Vital Statistics Born: January 8, 1965 Status: married to Jacqui, two children School: King Edward’s School, Birmingham University: Liverpool First job: shop assistant in Dungeons & Dragons store in Birmingham Pay: $8.7m (£6.5m) Homes: Atlanta and Surrey Car: Tesla Model S. “The autopilot is unnerving” Favourite book: any Nordic noir Film: The Matrix Music: UB40, The Specials Gadget: old-school Italian espresso maker Last holiday: trekking in Japan
Because he travels a lot, James Quincey has “a weird approach to mornings to minimise jet-lag”. He gets up very early — 4am-5am — when he is in America, and late — 8am-9am — when in Europe.
Quincey hates back-to-back meetings. “I need time to reflect.” He likes being in the field. “Weeks on end in the corporate tower don’t work for me.”
The Coca-Cola boss likes testing technology, not always successfully. Amazon Echo and other voice-activated gadgets cannot understand him because he sounds like a mid-Atlantic Noddy Holder. “I say something and it says: ‘Not recognised. Error. Blah, blah, blah.’ ”
Quincey loves skiing. He and his family have gone to the Colorado resorts Vail and Beaver Creek for 25 years. He watches his children play hockey and likes watching rugby. “I started as a No 8 at school and ended up winger.”
He hates going to the gym but “I try to swim. My doctor said: ‘You’ve got a greying of the spine.’ I said: ‘What’s that?’ He said: ‘You’re falling apart. Stop running. Go swimming.’ ”