Will This Change Lead to a New Coke?
After decades of dominance by the old school, Coca Cola’s (NYSE:KO) board is starting to get younger. The soft-drink giant announced Wednesday that two of its oldest board members are retiring to make way for younger members. The shift marks a change the company hopes will better serve the young generation of consumers known to consume more soft drinks.
The moves represent diversification in gender and corporate focus as well as age. Helene Gayle, who heads CARE USA, is coming to the board and bringing with her expertise in humanitarian causes. The board is saying goodbye to Donald Keogh, known as “Mr. Coke” by Warren Buffett and perhaps its most powerful member, who is stepping down at the age of 86. The other notable departure is that of the 80-year-old James Williams. Both served on the board for long stretches and reflect its members’ average age of 67.
Gayle, who is 57, brings a younger, female perspective to the board, not to mention a different background. CEO Muhtar Kent suggested the move will be followed by more efforts aimed at lowering the average age of board members. After all, its consumer base is mainly the younger generations around the world. As Coke looks to the future, the company will also make changes in its focus on cola drinks. According to The Wall Street Journal, Coke sales in the U.S. are in decline.
Coke is making a move into other types of soft drinks as the American demand for cola declines and interest in sports drinks & coconut water increases. Coca Cola Company’s reach already extends into juice brands like Minute Maid, yet the company is eyeing ways of increasing its ever-growing market share as it battles Pepsi (NYSE:PEP) and upstart beverage manufacturers.
Part of the fight will involve a shift away from its classic Coke brand. Anti-obesity campaigns in the U.S. are pointing to the ill effects of sodas in hopes of improving the diets of American citizens. Information about the dangers of sugar substitutes has also affected sales of diet soft drinks domestically. Coke is right to be thinking forward, though its board shakeup will need time and more changes to radically affect the company’s course.