After a rocky eight-year run atop the world’s biggest beverage company, Muhtar Kent will step down as chief executive of Coca-Cola Co. and hand the task of reviving sales growth to his top deputy.
James Quincey, a 20-year Coca-Cola veteran who was appointed to the No. 2 job last year, will succeed Mr. Kent in May. Mr. Kent, who recently turned 64, will remain chairman of the $180 billion company, Coke said. The transition had been expected though the timing was uncertain.
Mr. Quincey, 51, who was born in Britain and spent most of his career outside the U.S., takes over at one of the most powerful global brands as it struggles with a consumer shift away from sugary sodas. Coke’s revenue has declined in each of the past three years. Despite a diversification push into juices, bottled waters and other beverages, soda still represents about 70% of company sales.
One of Mr. Quincey’s biggest challenges will be the increasing number of governments weighing special taxes on sugary drinks amid rising obesity and diabetes. The U.K. plans to introduce a levy in 2018, and countries including South Africa and Indonesia are mulling similar steps. In November, five U.S. municipalities, including Chicago’s Cook County and San Francisco, approved sweetened-drink taxes.
“We’d like to go faster’’ in diversifying beyond core soda offerings that include Fanta, Sprite and the namesake cola, Mr. Quincey said Friday. Coke is expanding its selection of low-calorie and zero-calorie beverages, he said, and played down the prospect that it would expand beyond beverages, as rival PepsiCo Inc. has done. He said he still sees plenty of growth opportunities in soda and other nonalcoholic drinks.
Mr. Kent has tried to boost Coca-Cola’s profits by divesting manufacturing and distribution in the U.S. and elsewhere to focus on its higher-margin concentrate business. Coke has made a handful of acquisitions of juice and dairy companies; last year, it bought a 17% stake in Monster Beverage Corp., a leading energy-drink maker.
But many investors have soured on the company. Coke’s share price has gained 24% over the past five years, less than a third of the gain in the S&P 500. The stock rose 2.5% Friday to $42.
Congratulations to James Quincey, @CocaColaCo’s next CEO. There is no one more capable of leading our company into the future
— Muhtar Kent (@MuhtarKent) December 9, 2016