Coke reinstates global CMO role in bid to unify marketing, operations

Dive Brief:

The Coca-Cola Company will reinstate the global chief marketing officer role just two years after retiring it and amid broader changes to executive leadership, according to a news release. Manolo Arroyo, who assembled Coke's first global water strategy in 1998, will fill the position that, in its new incarnation, seeks to closely align marketing with operations.
When Coke initially wound down the global CMO position in May of 2017, marketing duties transferred to the then-newly formed appointment of chief growth officer, held by Francisco Crespo. Crespo, who has been with Coke for three decades, will retire next June after spearheading integrated global marketing, corporate strategy and customer and commercial operations as CGO. SVP and General Counsel Bernhard Goepelt will also retire in 2020, the release said.
In the release, Crespo was credited with helping Coke establish a more cohesive growth framework for its portfolio of brands — a foundation Arroyo will try to build off of as CMO. Arroyo will report directly to Coke CEO James Quincey, and continue to serve in his prior role as president of Coke's Asia Pacific group. Other structural changes, which go into effect on Jan. 1, include corporate strategy now reporting to CFO John Murphy and customer and commercial operations reporting to President and COO Brian Smith.

Dive Insight:

Coke resurrecting the global CMO role arrives on the tail end of a year that's seen chief marketers battered by volatility, and in some high-profile cases, the elimination of their role entirely. Coke in some ways helped lead the pack on this trend when it chose to switch focus from a CMO to a chief growth officer and streamline marketing operations in 2017. The move was seen as potentially game-changing, as the steward of the some of the world's most enduring, iconic consumer brands appeared to acknowledge that marketing was increasingly defined by a mastery of technology and performance-minded skills.

Other organizations followed suit in pursuing CGOs or tweaking CMO duties to layer in aspects of digital, data and growth strategies. Coke shifting gears back toward a CMO in the traditional sense, albeit one tasked with the steep order of integrating marketing and operations, is a potentially promising development for marketers heading into 2020, a year when many in the industry are expected to recenter their efforts on brand-building.

Companies like Gap, Adidas and Kraft Heinz have recently admitted to losing sight of brand-building at a time when delivering on short-term results is paramount and loyalty can be hard to retain with choosey consumers like millennials, as reported by CNBC.

Coke operates in a high-pressure packaged goods category that is being disrupted by shifting consumer habits, including a move away from soda in favor of lower-sugar alternatives like sparkling water. In the past several years, Coke has attempted to reposition itself as a "total beverage" company in areas beyond soft drinks. But chief executive James Quincey recently admitted that Coke was slow to capitalize on the booming seltzer trend as the company plans to introduce its own offering, Aha, in March. Localization of campaigns is also growing in importance for marketers looking to engage a global consumer base, but often difficult to achieve.

"We know consumer needs are changing faster and faster, and it is critical for the company to be agile in how it responds and adapts," Quincey said in a statement around the new executive appointments. "Manolo's dual leadership over operations and marketing is a new structure for us, and we anticipate that it will evolve in the months ahead. Manolo's focus will range from developing work that can be used around the globe to supporting local campaigns."

Coke is positioning the restatement of a global CMO as a natural next phase after creating what Crespo described as "frameworks and principles" that can help the organization sustain long-term growth. But in other ways, the reversal marks a change in tune. Speaking to Marketing Week last November, Coke's Global VP of Creative Rodolfo Echeverria said that eliminating the CMO role helped the company broaden its approach to marketing and get away from chasing creative awards at industry festivals at Cannes Lions.

Arroyo stepping up to the plate comes as key competitors experience leadership shakeups. Chief rival PepsiCo just a few weeks ago saw Roberto Rios, CMO of global beverages, depart for Schawn's Company.