Building Better Lives Through Better Business

Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company
Lars Olofsson, Chief Executive Officer, Carrefour
Consumer Goods Forum (GCF) 2010 Global Summit
London, England
June 25, 2010

Muhtar Kent (left) and Lars Olofsson, CEO of Carrefour, will serve as co-chairs of The Consumer Goods Forum for the next two years. They presented their vision for the organization today in London.

Kent tests one of our new shopper marketing tools inside the CGF 'Innovation Zone' alongside Hubert Patricot (left), EVP and President, Europe Group, CCE; Simon Baldry, Managing Director, GB, CCE; and Simon Miles, head of Category Planning, CCE.

As prepared for delivery

Muhtar Kent Opening:
Thank you, and good morning, everyone. What a distinct privilege it is to share the dais today with my good friend Lars Olofsson, and to be with each of you as we chart a new future for the consumer goods industry. This morning, we're going to spend some time talking about the future, and more importantly a vision for our industry and the Consumer Goods Forum.

Before we get started, though, let me just see a show of hands among you who believe the next 10 years will be more economically challenging than the last 10 years? Okay.

How many of you believe there will be more political risk around the world? Let me see your hands. How many of you believe that our natural resources, commodities and environment will be even more stressed in 10 years? Okay.

Now, how many of you believe your companies will be financially stronger and better positioned to compete and win in 10 years than you are right now? Interesting.

I asked these questions to underscore a point. We live in paradoxical times, don't we. Most -- or at least many -- of us see enormous challenges ahead. But most of us are also inherently optimistic about our future.

I personally find comfort in this. And that's because I see an industry and a group of leaders who are "constructively discontent." You're not satisfied with the status quo. Rather you want to embrace the future and make it better.

The vision for CGF that you'll hear more about in a moment from Lars reminds me very much of a similar strategic renewal exercise that we at The Coca-Cola Company have been going through for the past two years with our bottling partners around the world.

Like so many of you, we saw -- and continue to see -- a global landscape emerging that promises to fundamentally and dramatically reshape the nature of our business over the next decade and beyond. We see changes that are going to make the last 10 years seem downright tranquil -- changes we believe will affect everyone here in this room.

First, we will see a billion people around the world entering the middle class in the next 10 years. This, ladies and gentlemen, will be the greatest economic shift in history. And 60 percent of this new wealth will come from emerging nations.

Second, we're seeing a world that is growing appreciably older in many places (like Japan and here in Europe) but also a world being shaped by surging youth populations in India and in most of Asia, Latin America and even in North America.

Third, we will continue to see massive urbanization unfold as the world moves off the farm and into the cities. Indeed, for the next 10 years, an urban population the size of London will emerge about every 40 days. Every 40 days, for the next 10 years, an urban population as big as London added to the planet.

Fourth, with more people and more wealth, we're going to see constant -- not cyclical but constant -- scarcity of energy and natural resources.

And fifth, we're seeing a fundamental consumer reset that will define the next decade. A reset of consumer priorities, values, and expectations.

The implications of this consumer reset for our industry are profound, to say the least. Consumers worldwide are focused on value. They expect to engage with brands in a dialogue as opposed to a monologue. They do not want to be told what to do. Today's consumers are dictating what they want... how they want it... when they want it... where they want it... and what price they are willing to pay.

Increasingly, and just as importantly, consumers are judging us as much on the content of our character as the content and quality of our products and services. The work we are doing to embed sustainable business practices across our value chains and operations is incredibly important to the new consumer psyche.

These five defining forces are creating that paradoxical world I mentioned earlier. One defined by simultaneous and constant headwinds and tailwinds.

For our industry, we see a world of more people... with more wealth... with more demand for choice... leading highly mobile, on-the-go, urban lifestyles that are conducive to greater demand for consumer goods.

By better understanding the important trends, addressing them and working together on critical issues, we will be able to truly shape our future.

Amid this backdrop of opportunity and turbulence, Lars and I would contend that there is no better industry to be in than consumer goods -- which already accounts for one third of the world's GDP. In fact, we've really just scratched the surface of our potential to "build better lives and businesses."

But we can't do it alone or in a silo. In this complex environment, the need for collaboration... innovation... open exchange... and inclusion have never been more important. And all of this leads to our new vision for CGF... which Lars will take us through now.

Lars Olofsson Remarks:
Thank you, Muhtar, and good morning, everyone.

Muhtar set up the context for why we as an industry must move forward in a more collaborative, open and inclusive way. All of those global trends Muhtar outlined are going to have tremendous impact on the way global commerce and value chains are orchestrated in the years ahead.

I think we can all agree that no one company or individual has all the answers. We must learn from each other... leverage our collective knowledge and experience... and create a climate of success for our entire industry.

Many of the old models and assumptions we've grown up with no longer apply. With that said, I would like to walk you through our vision and guiding principles and frameworks for working together as an industry. I think what you will see is a powerful new organization... for a new time... with a new mandate.

As I walk you through this, I want you to think about three points of differentiation that will define this forum.

First is the strength of this organization -- leaders and innovators and influencers from around the world. Second is a culture of collaborative learning -- learning that moves us away from just project thinking to broader and more strategic system thinking. And third is the bias we will create for action.

So, let me start by reminding everyone of our basic tenets. The Consumer Goods Forum is a parity industry body. We're driven by our members, and as Muhtar mentioned, that membership base is growing. We bring together retailers and manufacturers to collaborate across the value chain to enrich shopper and consumer value in all markets. We support non-competitive processes and practices that optimize the value chain as an integrated whole.

Our overarching vision you already heard Muhtar mention -- it's about creating "better lives through better business." Let me repeat that -- "better lives through better business."

Now think about that. In a world today where public trust in business is at abysmally low levels -- where many believe business is part of the problem and not the solution -- we truly have an opportunity to take a leadership position in changing perceptions and winning consumers' hearts and minds.

Earning brand love from our consumers is certainly a priority of mine at the moment at Carrefour, and I am sure everyone here aspires to a deeper level of consumer engagement. I believe we can achieve this through our mission of working together -- passionately -- to serve shoppers, consumers and communities better, faster, and with great value and in a responsible way.

Our goal with this forum is to create a culture built around collaboration and learning.

As an organization, we will address common issues collaboratively with actionable and measurable plans. We will continue to focus our work on the Strategic Pillars that are defined by you as central to the future of the business we all share.

These elements are

• emerging industry trends
• sustainability
• health and wellness
• operational excellence
• and knowledge and people development

One of the most powerful aspects of our new organization will be its diversity and inclusiveness. Indeed, CGF will be a "big tent" organization. Our membership will be open to all consumer goods companies, large and small. And we will reflect the diversity of the consumer goods industry in geography, size, sector and format.

We will embrace a lean management structure, staffed by people who are extremely professional, committed and energetic. Our management team will draw extensively on the direct involvement of member companies in the stewardship and implementation of its work product. A team working for you. An organization that is your organization. This is our commitment to you.

We're not interested in becoming just another "talk shop." Your time, resources, and energy are too valuable for something that is not creating tangible value. To this end, we will build, over time, a body of Resolutions that will become a Manifesto for Industry -- voluntary but authoritative, comprehensive but actionable.

This is significant. Our entire industry coming together to recommend better ways of doing things. Better ways to conserve energy and natural resources. Better ways to reduce waste and protect the environment. Better ways to get to market faster and more efficiently. Better ways to serve our consumers and win their trust.

All of this will be guided by the highest standards of environmental, social and economic responsibility. Central to this will be working with each of you and all of our stakeholders to make sure our collaborative work is accessible for voluntary application within your companies.

We've already seen the power of such an approach with the publication last October of the Sustainable Consumption Institute report entitled, "Consumers, Business and Climate Change." Key elements of this report were adopted by the Board of the Consumer Goods Forum in November, and have become an important blueprint for our industry around the world.

Think about the implications of changing not only our behavior but the behavior of our consumers -- for the better. Consumers are at the heart of a low-carbon world.

So far, I've talked about who we are at CGF and what we are striving to accomplish. Now, let me walk you through some of the specific actions that will guide our collaborative work with you in the coming months and years.

We see four important roles that we must collectively be responsible for if we are going to be prepared to win in that environment Muhtar outlined earlier.

First -- Anticipate and Prioritize -- The Consumer Goods Forum is committed to "New Ways of Working Together," aligning business collaboratively around consumer needs, connected business information, people development and optimal supply chains. We will innovate around our strategic priorities.

Second -- Share and Develop -- We will bring retailers and manufacturers together to exchange best practices, and we will communicate this work widely.

Third -- Commit and Implement -- The Consumer Goods Forum will look beyond the short-term reporting on projects to the long-term adoption of sustainable collaborative behaviors that have widespread application. We will measure our performance in the changes our members bring to the collaborative cultures of our Industry. We will constantly seek out collaborative best practices and make them accessible to all.

Fourth -- Learn -- The Consumer Goods Forum will be a place of collaborative learning, where people development and the pursuit of new knowledge will cap the Strategic Pillars and bind the richness of our work. We will encourage and expand our support for learning and communications vehicles that deliver that goal collaboratively. And we will extend our support to other organizations that share that goal. In doing so, we will build a Consumer Goods Forum that will lead to better lives... and better businesses.

Which brings us back full-circle to where we started this discussion with Muhtar.

Muhtar Kent Comments/Finale:
I think what you've heard from Lars is a blueprint for massive change. Positive change. Sustainable change.

No other industry has the breadth of power to bring about the kinds of changes we are seeking with our vision. And no other organization has the potency of this body. We represent not only the large and powerful, but the small and innovative. The reach of this group touches almost everyone on the planet. Our supply chains extend into virtually every eco-system. Indeed, our products and brands are in front of billions of consumers every day and often multiple times a day.

With this pervasive presence come enormous opportunities and incredible risks. As Lars mentioned, building better lives through better business is going to require behavioral changes from all of us, and from our partners across the value chain, and from our consumers.

There's no question that today's consumers truly understand the power and influence our companies can wield in bringing about positive change -- positive economic change, social change, and environmental change.

In our increasingly inter-connected and information-flooded world, consumers now have visibility into our entire value chains. And they demand accountability in how we govern and manage these relationships.

With the vision Lars laid out, there is also no question in my mind that CGF can play a huge -- and transformational -- role in winning the hearts and minds of our consumers.

But as you know -- and I know -- vision without execution is merely daydreaming. Achieving our ambitious vision is going to require hard work. It's going to require our collective engagement and commitment, and that sense of constructive discontent that I mentioned earlier. It's going to require unprecedented collaboration... and continuous learning.

But it's a journey that will be absolutely essential. Lars and I look forward to that journey with each of you and we wish all of you the best of success.

Thank you.