Charlie Rose Talks to Muhtar Kent
Tell me about Project Last Mile, Coke’s effort to get medicine to remote locations while lowering costs?
This project began by a very simple question: “Why can’t we get these medicines out there and Coca-Cola can be everywhere?” Coca-Cola, I’ll give you, is one of the widest and most effective logistics and distributions systems in the world. We work tirelessly every day to make it better, to make it more efficient, to ensure that we can actually satisfy every week 20 million points of sale, retailers around the world that we call on with our fleet of delivery vehicles. So we do get to the last mile, we do get to different smaller villages.
Access to water is also a huge issue in many areas. What about this new purification technology that you’re starting to put in place?
Imagine a village where people are carrying water tens of kilometers away because they don’t have any. And imagine that it’s actually contaminated. And that village has no power, no electricity. And here you come and put one of these [Slingshot] units in that village, solar powered or powered by biomass, and it produces 1,000 liters of fresh drinking water—quality water, distilled water, vapor-compressed distilled water—per day, 300,000 liters per year. We’re one of the top three employers in Africa, but every community that we proudly serve has issues like this.
I want to talk about global markets. China, for instance, is a big developing market for Coca-Cola, but its growth in gross domestic product has dipped to about 8 percent. What does that do to your sales?
I think there’s too much hype about this notion of China slowing down. We have to put everything into perspective. China has been growing at 9 to 10 percent for the last 20 years. And there is a rule that I believe in: that when you get higher up, the oxygen gets thinner. It’s much easier to go from $1,000 per-capita income to $2,000. From $2,000 to $4,000’s a little harder. You would expect that there may be a very natural slowing down of that growth rate, which used to be 9 to 10 and now it’s going to be 7 to 8, maybe in a corridor of 6 to 8. That’s still a very noble rate of growth for an economy that size.
Are you saying that, with China having delivered more people out of poverty in the history of civilization in the shortest amount of time, that’s good for the global economy?
We all read and hear about China’s endeavors to try to transform its economy from a purely export-led economy to more of a balanced economy. And I think without a middle class you couldn’t have had a balanced economy, that it had to be an export-led economy, and the transformation of the Chinese economy, which the Chinese leadership is intent on doing, is healthy for the world because that means that they will import more.
How important have developing markets become for Coca-Cola?
Let me just put it into perspective: 3.5 percent to 4 percent of the population of the world live in the U.S., and we’re a consumer goods company. So we sell where the people are.
What’s the product mix people outside the U.S. want?
We look at ourselves as the No. 1—and premier—beverage company in the world. And we offer 3,000 products, more than 500 brands. Choice, I think, is the key. You have to offer consumers choice. For the first time in the history of our planet, there are 3 billion people who are communicating with each other every day. We launched a juice in China called Minute Maid Pulpy. Within three years it became a billion-dollar brand. And it’s now sold in more than 25 countries around the world.
Because we’re here in New York, I wanted to bring up Mayor Bloomberg and the new law limiting soft drink serving sizes.
Obesity is a societal issue. We have to come together with government, business, civil society, and NGOs to create solutions for this. Through collaboration, we’re going to create awareness for healthy, active living.
So you and the mayor might end up on the same page?
I wouldn’t like to comment on that right now, but I will say that without close collaboration … the issue is not going to be solved. Habits are hard to change.
Coca-Cola is a longtime financial supporter of the Charlie Rose show.