Why is Coke's Isdell Visiting India?
NEW DELHI: There's got to be more than what meets the eye, going by
the way Coca-Cola India is treating the visit of its global chairman
E Neville Isdell to India.
After initial reports that Mr Isdell was coming to India appeared
in print, Coke’s PR machinery in India and its president Sanjiv Gupta
went out of their way to assert that Coke’s global chairman was never
supposed to come to India this time of the year. “Please go ahead
and meet him, I’ll meet you there too,” Mr Gupta told ET on June 19.
Now we hear that the eagle has landed. According to highly placed
sources, Mr Isdell landed in the Capital yesterday at 11.19 pm in
his private jet, Gulf Stream 5, perhaps the first chairman of any
global company of this size to visit India less than a month after
taking over as its world-wide chief. He touched down in the Capital
with three passengers in tow — one of them is Asia Pacific head Patrick
Siewert. Sources say that the Coca-Cola CEO’s jet has already filed
its flight plan with the ATC at the New Delhi airport and is scheduled
to depart tonight.
That is the story so far. However, this is not the real thing. What
is intriguing, and downright suspicious, is the way in which Coca-Cola
India has gone about vehemently denying Mr Isdell’s visit. Mr Gupta
even went to the extent of saying that Mr Isdell may come here in
July and that he would let us know well in advance about his plans.
In the meantime, Mr Isdell, along with Coke’s top brass — Mr Gupta
and Sripad Nadkarni — met members of the advisory council over cocktails
and dinner. Among those present were Ustad Amjad Ali Khan, who is
also a member of the council. ET tracked down Mr Isdell to Maurya
Sheraton and camped outside West View, where the top guns of Coke
were huddled together till late last evening. Pawan Munjal of Hero
Honda, a member of Coke’s advisory council, dropped by to say hello
to Mr Isdell and the visiting top execs.
So what’s the real story behind the real thing? Isdell’s visit assumes
significance because the outgoing CEO Doug Daft did not visit India
even once during his chairmanship between ‘00 and ‘04. In fact, those
who understand corporate protocol express surprise that the Coke chief
is visiting India at a time when the management structure in the Atlanta
headquarters is shaky. “I would imagine him reading the real story
behind the real thing in the US,” says a senior industry observer.
One executive of Coca-Cola told us that the top management is keeping
the visit under wraps for fear of a possible sabotage. For instance,
when the then chairman Doug Ivester came to India six years ago, and
visited the markets, all the Coca-Cola hoardings from the points of
sale went missing. Others, however, feel that this is too simplistic
a view and that there are other important reasons for Coke’s secretiveness.
Coke’s top management in India is not very clear about what’s in store
for them in the Isdell era.
First, Coke’s company-owned bottling operations (COBOs) in India,
numbering 27, are one of the largest in the world. So are the losses
at over Rs 2,000 crore. Mr Isdell, a Coke veteran of 35 years with
huge interest in bottling operations, may split Coca-Cola India into
two clear divisions concentrate and bottling. Whether Coca-Cola
India will have two CEOs is still speculative in nature. Isdell has
created a new post called president, bottling investments, to directly
look after bottling operations in countries where the company either
owns bottling or has equity in it.
The new structure will result in a totally new model for consolidated
bottling investments by creating what is essentially an internal bottler
that will interact with the company’s concentrate business in the
same way as independent bottlers. “In the past, I do not believe we
have managed our significant investment in bottling through the prism
of a bottler,” said a highly placed source in Coke.
In his executive office memo to India dated June 15, Mr Isdell made
it clear that “Germany, Brazil and India are strategic investments”.
So, as sources point out, India can no longer remain in tier-three
of Coke’s global system. Mr Isdell will soon be expecting growth from
India where $750m has already been sunk in, buying bottlers and establishing
Further, Coke has been faced with a series of crises situations. First
came the allegation about its plant in Plachimada near Palakkad causing
environmental pollution and depletion of water resources. Second was
the pesticide controversy which jeopardised the company’s business
propositions in India for a while.
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