Coca-Cola launches Global Ventures group to integrate acquisitions
The Coca-Cola Co. has created a new Global Ventures group to make sure the company can adequately connect with and globally scale its key acquisitions, investments and partnerships, President and CEO James Quincey said during an Oct. 30 earnings call, according to a transcript.
He said the new unit will be led by Jennifer Mann, currently Coca-Cola's senior vice-president and chief people officer. She has also served as the company's chief of staff and as vice-president and general manager of Coca-Cola Freestyle.
"In this newly created position, Jennifer and her team will focus on ensuring we get the maximum value from acquisitions and investments, like Costa [Coffee], our partnership with Monster Beverages, etc. This group will also partner with colleagues around the world to identify and nurture the next series of fast-growing opportunities," Quincey said.
This new unit will have plenty to do. Coca-Cola's announcement in August that it would purchase British multinational Costa Coffee for $5.1 billion was the biggest M&A deal of the quarter. Just before that, the company bought a minority stake in BodyArmor sports drinks — and may completely acquire the brand in the future.
And it sounds like more deals will be forthcoming. Quincey noted on the third-quarter earnings call this week that besides integrating existing purchases, the Global Ventures group "will also partner with colleagues around the world to identify and nurture the next series of fast-growing opportunities."
"For Coca-Cola, should you expect to see this many deal announcements in one quarter again? Or will our strategy change?" Quincey wrote in an Oct. 30 post about M&A on the company's website. "Probably not. You should expect that bolt-on M&A will continue to be an important tool — although far from the only one — for Coca-Cola to continue to accelerate its total beverage company strategy."
As that strategy unfolds, the Global Ventures group is likely to be mainly focused on leveraging the acquisitions already made this year. The huge Costa Coffee deal will take a lot of integrating since it's a foreign entity and reportedly the second-largest coffee house chain in the world. It brings a variety of facilities and products under the Coca-Cola umbrella, and a great deal of coordination will be needed to make sure everything is available to global consumers in the most visible and cost-effective way.
Quincey said in his Oct. 30 post that it's critical for the company to continually evaluate its M&A performance to figure out what works and what doesn't. No doubt other major food and beverage companies do the same thing, but perhaps not as systematically as one that is trying to shift its focus from sugary soft drinks to becoming a "total beverage company."
"We have an M&A accountability process that measures the performance of transactions against the original business case. Specific people are accountable for driving the strategic vision and performance the deal was intended to deliver. This performance is reviewed regularly," he wrote.
Coca-Cola's shareholders and market analysts are liable to be watching how this assessment process shakes out — particularly following this year's acquisitions — and how the new Global Ventures group will handle its assignments from here on out.
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