To get a sense of the direction in which Coca-Cola is heading, consider these two drinks that the company introduced last year in Japan: There was Body Style Water, classified as a "near water" that is marketed to women and contains grapefruit flavor, caffeine and seaweed extract. And then there were two new varieties of Coke's enormously popular canned coffee: supercaffeinated and bitter.
The division of Coke that produced these nonsoda products was overseen by Mary Minnick, 45, who was just named to run marketing, product development and growth strategies at Coke's headquarters in Atlanta.
With worldwide sales of Coke's flagship cola declining, analysts say that an integral part of Coke's growth over the next decade will need to come from drinks other than traditional sodas.
PHOTO: THE NEW YORK TIMES
The analysts say it is no coincidence that someone who spent the last seven years in Asia overseeing Coke's most innovative market is now in the de facto No. 2 spot. In Japan, Coke regularly replaces 20 percent of its products each year, introducing roughly 200 new products or varieties. Coke investors are hoping Minnick will apply companywide the product development lessons she learned in Japan, Coke's most profitable market.
"Mary's coming in from Coke's most innovative marketplace in the world," said Tom Pirko, president of Bevmark, an industry consulting firm in Santa Barbara, California. "Will she be a force for change? I think yes."
Minnick's new position merges two areas crucial to Coke's future: marketing and product development. She is also the first woman to ascend to such a central role at Coke.
"Coke is a classic old-boys' network," Marc Greenberg, an analyst at Deutsche Bank, said. "It hasn't been an easy culture for women."
Coke has been run since last June by Neville Isdell, 61, who came out of retirement to take the chief executive job. Many analysts and investors have questioned how long he will remain at Coke.
"I can never get a straight answer to that question," Greenberg said. "But I think if Mary does her job right, the board will have an easy decision."
Sergio Zyman, a former Coke marketing executive who worked with Minnick in the mid-1990s and now runs his own consulting firm, described Minnick as "a hell of an executive," adding, "I think she could go and run the company today."
But some analysts say such talk is premature. "It's still too early in Neville's tenure to know whether someone is being groomed as his successor," said John Faucher, an analyst at J.P. Morgan.
Mediocre advertising
Minnick's appointment highlights the marketing woes that have plagued Coke for years. She is Coke's fifth head of marketing in seven years.
Daniel Palumbo, an executive from Eastman Kodak, lasted a year before being succeeded last June by Chuck Fruit, a 14-year veteran of Coke. Fruit will continue as chief marketing officer, but will report to Minnick. Danny Strickland, chief innovation officer, will also report to Minnick.
Once the company's strong suit, marketing at Coke is now panned by analysts as erratic and mediocre. Manny Goldman, a beverage consultant in Hillsboro, California, who has been following the company for 30 years, gave Coke a score of 2 out of a possible 10 for its marketing and advertising in recent years.
Goldman and other analysts point to last year's expensive introduction of Coke's new "mid-calorie" C2 as an example of poor marketing.
Faucher of J.P. Morgan said he thought Coke was trying to do the impossible -- position the new soda as a premium product with higher prices, while driving high-volume sales with a US$50 million marketing campaign.
Greenberg of Deutsche Bank said C2 was not positioned so that it would be perceived by consumers as being worth the extra money. "Consumers thought, why do I want something with less calories when I have a drink over here called Diet Coke that has no calories?" Greenberg said.
According to Beverage Digest, C2 sold 25 million cases, which analysts say is below what the company was anticipating.
Minnick's many supporters both inside and outside the company say they are confident she will be able to prevent further marketing mishaps.
"Mary combines great creative insight with disciplined execution," said Jay Gould, a former global-marketing executive at Coke who is now president of Pepperidge Farms.
Those who know Minnick say she has an assertive, take-charge style, which may be just what Coke needs.
"Mary is smart and tough and puts pressure on people," said John Sicher, editor of Beverage Digest "She will shake things up and get things moving."
Minnick's exacting standards have earned her a reputation for being overly demanding and impatient at times. Her defenders, however, suggest these impolitic attributes have helped her achieve the solid operating results that have propelled her up the corporate ladder.
"Mary is difficult to get along with, but it's not an easy culture for women at Coke," Greenberg said.
In her 21-year career at Coke, she has lived all over the world -- in Sydney, Tokyo, and most recently, Hong Kong. She will relocate to Atlanta by early May.
Track record
In Japan, Minnick is credited with consolidating a fragmented manufacturing and bottling system, shortening production times and cutting costs. Although the Japanese market was Coke's most profitable before Minnick took over, sales were flat. She helped lift sales by 3 to 4 percent a year, something not easily accomplished in such a mature market.
Japan accounts for roughly 20 percent of the company's profit. Last year revenue from Japan was US$2.9 billion, or 13 percent of total sales. Minnick also oversaw China, which is Coke's fifth-largest market in terms of volume.
The Japanese division is the subject of an investigation by the Securities and Exchange Commission and the US attorney's office in Atlanta, which are looking at allegations that Coke shipped excessive amounts of beverage concentrate to bottlers to inflate financial results. In the past, Coke has denied the allegations, and a company spokesman said that the years in question were 1997-'99, which predate Minnick's arrival in Japan in 2000.
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