Remarks at the King and Spalding Dinner

Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company
Atlanta, Georgia
September 24, 2009

As prepared for delivery

Thank you, Robert (Hays), for that kind introduction and good evening, everyone. It's a pleasure to be here with you for the Fall Executive Dinner, and in the company of so many good friends and colleagues from Atlanta. I know we're all moving at a million miles an hour these days, so it's great to see such a fine turnout.

And speaking of "moving at a million miles an hour," I am reminded of a colorful anecdote from the annals of our rich history with King & Spalding. As some of you may know, there was a time back in the 1930s, when Robert Woodruff moved The Coca-Cola Company headquarters to Delaware on account of an intangible tax law that was imposed by the State of Georgia.

Mr. Woodruff asked his good friend Hughes Spalding to run point on this and find a way to get the law repealed. For four long years, Mr. Spalding tirelessly worked the state legislature. He launched an extensive public relations campaign. He crisscrossed the state to drum up support. And he even hired a writer to flood Georgia's local papers with anti-tax viewpoints. Eventually, the State Government saw the light and repealed the law. But not before nearly draining an exhausted Mr. Spalding.

In a mild fit of exasperation, Mr. Spalding wrote a letter to Mr. Woodruff saying (and I quote) "as a friend, please don't give me any more jobs that can't be finished in a day or two."

Fortunately, for all of us, Robert Woodruff didn't listen to his good friend's request. In the years since, of course, thousands and thousands of hours and endless gallons of midnight oil have been consumed in the offices of King & Spalding in the interests of The Coca-Cola Company and our shareholders. And we thank you for this incredible commitment and partnership.

I mention this story because it also raises a broader point about transparency and trust -- something that has always defined -- and continues to define -- our relationship. In today's marketplace, trust is as valuable as gold, if not more so.

For the past year, The Coca-Cola Company and our great bottling partners around the world have come together to forge a system-wide vision of where our business needs to go and the actions necessary to get us there. We call it our 2020 Vision as it looks out over the next decade and beyond. It's the first time we have come together develop a truly system-wide vision since the days of Roberto Goizueta.

As you can imagine, TRUST is at the very center of our vision. Strengthening bonds with our bottling partners... creating greater value for our retail customers... introducing a new generation of consumers to our brands... and engaging our employees around the world -- are all central pillars of our 2020 Vision. And TRUST is essential to all of these relationships.

As we endure a global financial crisis brought on largely by a series of broken promises, the virtues of trust and social responsibility have never been more relevant. Consider just a few alarming statistics.

According to the most recent Edelman Trust Barometer, nearly two-thirds of informed citizens trust corporations less than they did a year ago. When respondents were asked about trust in business in general, only 38 percent said they trust business to do what is right -- a 20 percent drop over last year. According to the same survey, less than one in five people today say they trust information from a company's CEO. These, my friends, are among the lowest levels of trust ever recorded.

I must say I am deeply troubled -- not surprised, but troubled -- by these findings. The implications for our companies and our brands are profound. Protecting our brand -- our reputational shield -- is something that is near to the heart of everyone in the Coca-Cola family.

Over the course of 123 years, the men and women of the Coca-Cola system have built one of the world's most recognized and valued brands. And the men and women of King & Spalding have been right there with us -- protecting our reputation and interests.

I am pleased to say that our business is not only weathering this global economic turbulence, but we are positioning our business to come out of this tunnel in much better shape than when we entered into it. Even in North America and Europe, which have been hit hardest by the economy we're seeing strong growth across a number of important brands.

Coca-Cola Zero, for instance, continues to drive our sparkling beverage business. Here in North America, Coca-Cola Zero has experienced 12 consecutive quarters of double digit growth. We're also seeing solid performance in our Fuze, glaceau and Trademark Simply brands, which are leading to continued share gains in our juice and enhanced water platforms in North America.

In Asia, we're seeing tremendous growth in markets like China and India, which are also leading the rest of the world out of this global economic mess.

In Eurasia, Africa and Latin America, we're also feeling the positive impact of emerging economies that have been more resilient during this economic storm than most of the G-20 economies that are meeting in Pittsburgh today.

Stepping back for moment and looking at the broader picture of an economic recovery, I think what's emerging is an uneven picture.

Green shoots in some markets -- China, Brazil and India, for instance... Stagnation in places like Japan... Slower recovery and consumer resetting in North America and Western Europe... And high volatility in Eastern Europe, Russia and Ukraine.

In this environment, we at Coca-Cola are fortunate to be an affordable luxury and a brand that people know and trust.

Today, Coca-Cola is the second-most universally recognized term on the planet. Only the term "okay" is recognized by more people around the world.

The strength... the resolve... and the sustainability of our brand is directly related to the social license that we have earned from billions of consumers around the world over all these years. It's an honor and a responsibility we don't take lightly and which we will never take for granted.

In today's connected global economy and interwoven social networks, a brand with 123 years of credibility can be discredited -- and even destroyed -- in a matter of 123 seconds.

I would contend that as business leaders there is absolutely no responsibility that is more important for us to manage and uphold than our social license to operate. If a good brand is a promise, then a great brand is a promise kept. Indeed, trust is the glue that holds not only our businesses together, but our entire free-market and trading systems.

The toll of the global financial crisis this past year -- coupled with the growing rhetoric from the anti-globalization movement -- now threaten to promote economic isolationism and protectionism around the world.

Today, for example, less than 3 in 10 Europeans and Americans believe that globalization is a force for good at this very moment. Even in the developing markets of Asia -- nations that have most benefited from trade in recent years -- less than 4 in 10 people believe that globalization is a positive force.

Again, this shouldn't surprise us. But it should motivate us. Clearly, we have our work cut out for us.

Today, business, government and civil society must come together -- and partner like we've never partnered before -- to promote the social, economic and environmental benefits of a world coming together through greater trade, investment and development. We must work closer and more effectively with multi-lateral institutions that promote trade in a multi-polar world. We must collectively do a better job in promoting our position and showing how international trade and investment benefit each and every person they touch. As leaders, we can and must turn around the bad reputation of global trade and business.

I would like to very briefly suggest three specific areas where we can potentially partner in the future to rebuild trust and recapture hearts and minds.

First, we need to ensure that we are developing socially responsible and diverse leaders who can interact and inspire across cultures and across continents. Just last month, we recognized such an achievement by awarding King & Spalding with our Living The Values Diversity Award which honors the great work being performed by our legal partners across our system. Congratulations once again on this achievement.

Second, we would all do well to remember that in foreign affairs, corporate diplomacy is becoming as important as political diplomacy. As you all are very aware, anti-Americanism abroad has been a significant concern over the last several years. Over the past year, President Obama has done a great job in improving these attitudes but we still have long road ahead. The world needs a strong Brand America. And a strong Brand America needs not just strong political leadership but also strong business leadership oversees.

Third and finally, we need to better help promote climates for investment and innovation. Heavy handed government regulation and taxation do not inspire innovation and entrepreneurship. We need to make our voices heard on these issues and work with government and communities to be part of the solution.

Last week at the Atlanta Rotary, I made my voice heard -- perhaps a little too loudly for our PR guys -- on the issue of soft drink taxes and obesity. Those who want to tax us claim that soft drinks are a major contributor to obesity and as such must be taxed to discourage consumption and help offset the nation's rising health-care costs.

There's no question that obesity is rising at alarming rates – not only here but around the world. Since 1980, the global obesity rate has more than doubled. But over that same period of time, we at Coca-Cola have reduced our calories-per-ounce by more than 20 percent across our portfolio. And in the last five years, we've taken nearly 60 percent of the calories out of the beverages we make available to schools.

As most of you know, we created the "diet category" nearly 30 years ago with Diet Coke, and today, as I mentioned, our fastest-selling sparkling beverage is Coca-Cola Zero. In fact, Coca-Cola Zero is our most successful product launch since Diet Coke.

Make no mistake, we want to be part of the solution. But singling out one industry -- or one source of calories -- for a regressive-tax policy is simply not the answer to the obesity crisis. Even a recent study by George Mason University shows that taxes on sugar-sweetened soft drinks do not advance the overall public interest... are regressive in nature... and hardly ever work.

We all have to examine a much more complicated landscape of sedentary lifestyles and caloric imbalances. It's going to require a holistic approach and a collaborative approach among government, business and civil society to help change behavior and encourage active, healthy lifestyles. I have invited the Obama administration to work with us on this.

The bigger point here is whether it's a sugar tax, or another form of excise tax... or a wrong-headed protectionist regulation -- if we don't push back then we lose our voice and our relevance. Hugh Spalding and Robert Woodruff certainly understood this as does everyone here tonight.

If we do these things together -- develop outstanding global talent... practice skillful business diplomacy... and work to promote climates of innovation and entrepreneurship -- there is no doubt that we can turn back the tide of the growing anti-globalization and protectionist sentiments. There is no doubt we can rebuild trust in business.

Thank you again for your time and attention this evening. Thank you.