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Bracing for a tough year, new Coca-Cola Amatil MD begins restructure

13-May-2014
Last updated on 13-May-2014 at 07:18 GMT2014-05-13T07:18:48Z - By RJ Whitehead
Alison Watkins, managing director of Coca-Cola Amatil
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Acknowledging that growth will be tougher to achieve than it has in the past, Australasian bottler Coca-Cola Amatil’s new managing director has announced a shake up of the company under the guise of a strategic review.

The strategic review being undertaken recognises that we are moving into a different era as market conditions across the group become more competitive and growth becomes more difficult to achieve,” said Alison Watkins, who moved from Graincorp to lead CCA in March.

“An organisation structure which provides a strong focus on the performance and strategy of each of our businesses is important.”

Portfolio changes

At an annual shareholders meeting this week, Watkins also flagged changes to CCA's brand portfolio, route to market, pricing architecture, cost base, manufacturing footprint and marketing.

"We need products that reflect consumer preferences.... we need to have a stronger portfolio outside carbonated soft drinks,” Watkins said. “We have been slow to innovate outside our core franchise.”

She is also in the process of reviewing CCA's longer-term growth plans and investment in Indonesia, and is keen to improve alignment with major shareholder The Coca-Cola Company.

On an operational level, the company’s non-alcoholic and alcoholic beverage business units will each report separately to Watkins from June 1.

Our core non-alcoholic beverages business unit will require strong leadership and close alignment with our partner, The Coca Cola Company, to execute against an agreed strategy which will leverage CCA’s strengths and drive transformational change,” said Watkins, who named Barry O’Connell, CCA New Zealand’s current managing director and industry veteran, as managing director of the unit.

The licensed and alcohol business unit will report directly to me to enable greater speed of response to market, facilitating a more entrepreneurial approach within a different industry sector, working closely with our partners to identify and capitalise on growth opportunities,” added Watkins. Shane Richardson will continue in his role as director of the unit.

No place for Murphy

As a result, John Murphy, CCA’s current managing director for Australian beverages, finds himself without a portfolio and will leave the company after a transition period that will last until the end of June.

Following O’Connell’s move to Australia, Chris Litchfield, CCA New Zealand’s current sales director, is to be appointed acting managing director of CCA New Zealand & Fiji. A decision on a permanent appointment will be made in the coming months.

While CCA 's market share in carbonated soft drinks remained solid over the last quarter, and it has grown share in energy drinks, the overall Australian soft drink market remains weak, especially in the grocery channel. At the same time, CCA had been struggling to push through price increases, leading to Watkins announcing no change to CCA's previous guidance for a 15% fall in June half earnings per share.

Related topics: Manufacturers, Coca-Cola, Soft Drinks & Water