Coke veteran Quincey to replace Kent as CEO in widely expected move

But Kent will continue as chairman of Coca-Cola's board

Coca-Cola Co said Muhtar Kent would step aside as chief executive officer (CEO) in May, after nine years at the helm, and be replaced by company veteran James Quincey, a widely anticipated move that comes as it tries to reduce dependence on its mainstay sugary carbonated drinks.

Kent, 64, will continue as chairman of Coca-Cola's board, the company said.

Quincey, 51, joined Coke in 1996 and became chief operating officer in August 2015. His appointment as CEO was given a vote of confidence by Warren Buffett, CEO of Berkshire Hathaway Inc, which is Coke's largest shareholder.

"I know James and like him, and believe the company has made a smart investment in its future with his selection," Buffett said in a statement.

 

Quincey is credited with several recent changes at Coke, including introducing smaller-sized beverage bottles to boost profits and driving the reduction of sugar levels in its drinks.

"This succession was widely expected, and has been ever since James Quincey was appointed COO. Quincey is well regarded and, at 51, has many years ahead of him," Societe Generale analyst Andrew Holland said.

The company's shares were up 2 per cent at $41.83 in morning trading.

"A move in the right direction as Quincey is a realist with a sense of urgency about diversifying the beverage portfolio and improving local execution via refranchising," CLSA analyst Caroline Levy said.

Since Kent took over as CEO in July 2008, Coke's sales have increased by about 39 per cent, while the company's shares have surged 61 per cent.

However, Coke's sales have fallen in the last three years as the company battled falling demand for sugary carbonated drinks and pressure from health experts and governments blaming sugary drinks for rising obesity levels.

To counter the sales drop, the company is building its non-carbonated drinks portfolio, cutting costs by selling its bottling operations and stepping up efforts to reduce sugar in its beverages.

Coke still gets about 70 per cent of its volume sales from sodas.