ICR(2010) 9:22–28 – DOI 10.

1007/s12146-010-0057-5 – © ICR 2010

22
INTERVIEW Published online: 7 September 2010

Questions by Alan Mitchell,

Managing Editor, International Commerce Review
asmitchell@aol.com
London, United Kingdom

Working
to the
Same
Agenda

Muhtar Kent
Chief Executive Officer,
The Coca-Cola Company

Lars Olofsson
Chief Executive,
Carrefour I N T E R N AT I O N A L C O M M E R C E R E V I E W

The consumer goods
industry touches the daily
lives of 7 billion consumers
and accounts for one
third of global GDP. The
new Consumer Goods
Forum joins together the
organizations involved in
this vast industry into
one single body, working
to the same agenda. Its
potential to change the
industry – indeed, the
world – is huge.
So what’s it going to do?
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23
ICR: What is the Consumer Goods a macro-economic point of view.
Forum (CGF) going to do that the So we have a very high degree of
other industry bodies didn’t do? participation, commitment and
engagement.
Lars Olofsson: Before, we had
manufacturing organizations In a nutshell, there is one thing we
and retailing organizations, and are about: Better Lives through
we built bridges. Today, we have Better Business. That says it all. The
a collaborative platform, which picture of success for the CGF is to
means that everybody is sitting become the most credible body in
around the same table with the the world, helping us all to meet
same agenda. That changes the needs and expectations of
profoundly the opportunity to consumers in the best possible
make things happen. It is not way. Credibility from a global
about exchanging information; it voice. That is what’s new about
is about having the same agenda the CGF.
and driving that agenda to
concrete action. It’s a fundamental Is it unique in the way it brings
change. together different parts of an
industry’s supply chain on a
But wasn’t ECR Europe doing global basis?
that?
MK: It’s too new
LO: Yes, but not on such a global to tell. It’s just Muhtar Kent
level. This new organization the beginning is Chief Executive
represents a $2.5 trillion industry of a journey. We Officer and
and all the manufacturers and have fantastic Chairman of
retailers in the world. ECR is a opportunities The Coca-Cola
partner in Europe and Asia. We will and substantial Company and
develop links with other partners challenges. Co-Chair of
in the areas where ECR is not the Consumer
present. LO: We have already Goods Forum,
identified five major Manufacturer
Muhtar Kent: Building on what pillars that we can College.
Lars has just said, I think it is work on together to _____
important to say what the CGF is make the industry
not going to do. It’s not going to go faster and be Lars Olofsson
duplicate – before, many processes better. It is incredibly is Chief Executive
were very duplicated. It’s not encouraging that of Carrefour and
going to be slow. It’s going to be we have been Co-Chair of the
fast, action-oriented and focused. able to come to Consumer Goods
You can see that from our vision this conclusion so Forum, Retailer
and mission statement. You can rapidly. College.
also see that from the number of
participants who attended the CGF Those five pillars –
meeting in London. If you compare Sustainability;
that number to the number of Health, Wellness and Food
people attending meetings from Safety; Operational Excellence;
all the different industry bodies Emerging Trends and
over the last ten years, it’s an Knowledge Sharing/People
all-time high. And that’s in a year Development – each one of
which has been very difficult from them is a pretty big challenge.
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It’s very difficult to focus on
them all to the same high
degree. So which ones are you
going to focus on particularly
over the next one to two years?
LO: In each pillar, you have to focus
on what’s actionable. So, for example,
in sustainability we are focusing
on packaging and a common
vocabulary for sustainability and
ways of measuring CO2 , in particular.
That’s basically two things. Of
course sustainability is much bigger
than that. But if we want to see
real changes, it’s important that
we concentrate on things that our
members can do something
about.
MK: If you look at the CGF member
companies and their leaders – if you
look at their own strategies, their own
visions – all of them embrace parts
of the five pillars. You can see this
in their annual reports. So we have
found a major common platform
that we are all working on. It’s not
something we have dreamed up. It all
fits together. It is fully in line with the
philosophies we have developed. It is
about meaningfully helping to create
sustainable communities, leading to
sustainable business.
The CGF represents $2.5 trillion of
consumer spending and has the
credibility of a global voice.
This is a fantastic opportunity.
What was your reaction to
Prince Charles’ speech? (see
inset)
LO: He is a very engaging and
passionate man. He’s had an interest
in these areas for many years. He
has a certain vision for the future.
We have to take steps today to
make sure that future generations
can eat the same species as we
eat today. It was enlightening in
that we have to focus on the core,
taking sustainability to the heart
of our actions. Sustainability is not
something that we add on, it is ‘part
of’. We are a good portion of the
world economy. We are the ones
who have the responsibility and the
opportunity to change it ourselves,
but also, more importantly, we
have the opportunity to help the
consumer to drive the change.
But there was a degree to which
he was being critical of the
industry, saying it hasn’t gone
far enough.
MK: He has passion. We cannot
hope for more high profile,
passionate leaders than people
like the Prince of Wales or Al Gore
or Bill Clinton. We can’t hope for
better spokesmen for the cause of
sustainability. Seeing him up on
stage in front of all those people
was ratification that sustainability
is right at the top of our priorities.
It is what we are trying to achieve.
This is our organization. Never
forget that. We are coming at it
from a point of strength: on the
board, and its members. It is a
collaborative platform. There will
be a bias to action in the new CGF.
Talk, yes. But also, ‘what are we
going to do when we get back?
What’s going to be different?’
Looking forward. Will
consumers actually notice
anything different from what
the CGF does?
LO: In the end, we will serve
consumers better. Before, we
had different associations and
were building bridges. We had
certain understandings and
a few concrete actions. But
being involved around the
same table, having the same
agenda, identifying what needs
to be done, these are the forces
compelling the CGF to really take
concrete actions. How can we
improve operational efficiency?
How are we interacting together
in the supply chain? Do we have
common learnings that we can
turn into best practices? These are
all big areas in which we can make
a real difference.
In sustainability, for example, it is
really important that we inform
consumers, enabling them to
make informed choices. If one
company does this, it achieves so
much. But if the whole industry
gets behind it, it is a completely
different opportunity. This
is a really big challenge and
opportunity: to drive actions to
the benefit of the future.
I N T E R N AT I O N A L C O M M E R C E R E V I E W

So what three actions would
you like to see over the next one
to two years?
MK: We want all companies
to have progressed in the
sustainability area. We want
there to be some learnings,
some best practices that they
took from their involvement
with the CGF. We don’t want
people hiding things in this
area for competitive advantage.
It is about all of us making a
contribution to a sustainable
planet and to sustainable
businesses and entire supply
chains. If agriculture can learn
from our actions, for example,
that is a big benefit. So furthering
that agenda means better, earlier
and more consistent goals for
all companies, whether they are
about water, carbon emissions,
refrigeration, distribution
and so on.
LO: So Sustainability is at the
heart of our agenda. That’s
one. We are also talking about
safety and health. And thirdly,
it’s about changing the way we
interact together to get higher
efficiencies. Here we have the New
Ways of Working Together that is
becoming a part of the DNA of
our interactions so that we can
get costs out of the supply chain,
innovations onto the shelf faster
and so on. If we can prevent the
rate of deforestation, for example,
if we can slow it down, that would
be a significant achievement.
But at least now, finally, we have
an organization that can make
a difference on this scale and
become a credible voice in the
world.
We will help support research
and develop knowledge and
insight along the way. We will
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work hard to improve alliances
with NGOs like the World Wildlife
Fund and Greenpeace because
success in this area belongs to
an improvement in the triangle
between business, government
and civil society. If we can help to
make that triangle stronger, we
will have won.
Ten years ago, it was very much
a ‘seller’ and ‘buyer’ relationship.
It came down to price. But in the
end, the retailer is also a seller.
Remember, this is an association
that represents one third of the
world’s GDP. But that is made up
of the daily decisions of seven
billion people: one third of global
GDP is made up of small decisions
that are taken every day by the
consumer. That is what we are
representing.
When we talk about New Ways of
Working Together, what’s really
new here? Wasn’t ECR talking
about this 10, 15 years ago?
25
LO: Ten years ago the vision
was the same, but the means of
getting there was very different. If
you look at New Ways of Working
Together, ten years ago it was a
concept. Today it is a reality. A
tool. We have identified a certain
number of tools, such as JAG
(Jointly Agreed Growth): how to
innovate better, how to do joint
business planning. Today, every
company can see the best practice
of doing it. Ten years ago, there
was no best practice because
no one had done it. Today, we
have best practice about how to
identify joint business benefits.
Secondly, we are talking about
changing the culture of the
people. Ten years ago, it was still
very much a ‘seller’ and ‘buyer’
relationship. Just by saying
that – seller and buyer – it became
a matter of ‘what is the price?’
Today, we are talking about a
producer, a marketer and a seller,
because a retailer is in the end a
seller. So we are identifying how
to drive growth. We are putting
the consumer and the client in the
center. That was not the case ten
years ago. What was at the center
ten years ago was the interaction
between manufacturer and
retailer.
But the industry has been
saying it was putting the
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consumer at the center for

decades!

MK: The tools were not there.

And there were many different
organizations, swarming in
different directions with different
agendas. Now we have one
organization, one agenda and a
group of members who are really
willing to engage to be a part of it,
to understand how best practice
can help their own businesses.

And let’s not forget that over the

next ten years, you are going to
have a billion new middle-class
consumers. What an opportunity
for us to leapfrog! We have the
opportunity to be right at the
forefront of giving concepts,
goods, knowledge and insight
to these consumers so that they
can be better informed, choosing
products on the basis of not only
the value of the product but also
the character of the company; the
character of the joint companies –
the producers, the marketers and
the sellers.
LO: ECR had the same ideas but
couldn’t really change when it
came to involving the consumer.
So it went back to the supply
chain. If you look at all the main
ECR initiatives over the past ten
years, they have been supply
chain oriented. Today, what we are
doing is much more consumer/
client oriented.
What about regulatory issues
relating to information
sharing – regulator concerns
about cartels and so on?
MK: You always have to be
watchful and careful. We have very
good advice on how we approach
those things to make sure we are
abiding by all regulations. But
Consumers are choosing on the
basis of not only the product but
also the character of the company:
the character of the joint companies:
producers, marketers, sellers.
there is so much more that we can oriented – Health and Wellness,
collaborate on to have a business Sustainability and Operational
model that is sustainable, where Excellence. Another pillar floating
we can help others learn. We have above these is Emerging Trends,
to be aware of the perils of not which ensures that we are
being able to change some of our capturing what’s going on and not
methods, means and habits. missing out by just focusing on
what is immediately actionable.
We talked about research and
knowledge and sharing. What is LO: Being proactive.
the CGF going to do on this front?
MK: Yes, being proactive. That’s
LO: There is a lot of work going not so much researching as it is
on in each workstream and with developing antennae to capture
external institutions. When the what’s going on and constantly
results are ready for distribution, evaluate what we should put
we will use all available methods on our agenda. Then we have
to ensure that all members have the knowledge sharing and
access. educational part – how can we
diffuse what we are doing in those
MK: We have three pillars for three pillars so that everybody can
which we have to be action- profit from them? So the strategy

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is to concentrate on those pillars,

make them actionable and use
tools, information and education
to make it happen.
LO: Don’t forget that there is also
an incredible amount of work
going on inside the member
companies of the CGF. Research
is theoretical. This is all about
being practical in day-to-day
manufacturing, retailing, supply
chain, packaging, lightweighting –
so that we can share best practice,
bearing in mind all those cautions
about information sharing.
There has been a lot of talk at
this conference about consumer
empowerment and informed
choices and so on – how do you
see these trends affecting the
industry?
We will be action-oriented.
We will concentrate on our five
pillars, make them actionable
and use tools, information and
education to make them happen.
consumers better and with more
clarity so that they can make more
informed choices?
But remember, we also need
to constantly find new ways of
delighting customers. And we can
achieve that by ‘wowing’ them.
[Picks up a new Coca-Cola product]
the CGF, there is going to be a lot
of accountability so that we can
track our progress. Of course we
will make mistakes. One year has
passed since the decision was
taken to form the CGF. I think
it is fair to say that everyone is
excited about the potential for
this organization. But it has a lot

MK: Consumers no longer want a

monologue, they want a dialogue.
In the past, you could get by
with a monologue. Telling them
about products. That’s no longer
good enough. Consumers want
to be involved in the creation,
discussion and values, as well as
how the product is sold, at what
price, etc. That is what I mean by
empowerment.

But what about consumers’

ability to make informed choices,
say about the environmental
impacts of their consumption?
These are very complex issues.

LO: We are constantly working
on that: better labelling, front-
of-pack labelling. There is not
a lack of information. There is a
clutter of information. There is
a big difference between lack
and clutter. We need to make it
simple and stay ahead of their
needs. We need to address this
question: how do you engage
I don’t need information on that. I of work to do, and remember
would buy it anyway. That is called we all have businesses to run.
innovation and delighting the However, if we succeed here, all
consumer. Evidently, it’s all been our businesses will do better.
done in a responsible way, but I
don’t need to be informed if I am
wowed.
MK: One more thing. We haven’t
talked about accountability. In

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Edited extracts of a speech
by HRH The Prince of Wales
to the Consumer Goods
Forum, London
““““““““““““““““““““““““““““““
You have created an organization made
up of 650 companies from 70 countries
with combined annual sales of over $2.5
trillion. There are 6.8 billion people in
the world, and you represent an industry
that touches each and every one of them
every, single day. They are your customers
and, crucially, your suppliers. By my
reckoning, there can be few organizations
better placed to address some of the
most pressing problems in the world
today.
Consumer patterns play a central role
in the many environmental challenges
facing our planet. Please make no mistake
about this, the health and stability of the
global economy ultimately depends upon
the resilience of the world’s ecosystems
and the durability of the Earth’s limited
natural resources. Whether it be climate
change, the growing scarcity of fresh
water, the loss of fertility of the soil or
the destruction of so many of the world’s
vital ecosystems, the behaviour of the
consumer is fundamental.
Patterns of consumption, the global
economy, political stability and
environmental sustainability are all
integrally linked. And this is why, in my
view, if we are to tackle these problems,
then the food retail and manufacturing
sector has to be a central element in the
solution. You, ladies and gentlemen, are
absolutely essential to the future well-
being of the planet and its ever-growing
population. What you do and how you
behave are pivotal.
...
[For example, I would like to] raise the
subject of the perilous state of our
marine ecosystems. The facts, Ladies and
Gentlemen, as they stand are alarming.
The latest figures from the U.N.’s Food and
Agriculture Organization are that over
seventy-five per cent of commercially
valuable fish stocks are either fully or
over-exploited. Worldwide, in just fifty
years, we have consumed more than
ninety per cent of the large predatory
fish in the oceans. The numbers of fish
like tuna and cod are now desperately
low. They are only ten per cent of what
they were forty or fifty years ago. … On
current trends, virtually all commercial
fisheries will have collapsed by 2050.
We have to take urgent action to put in
place a more precautionary approach to
the way we manage commercial fishing.
The prospects if we don’t do that are truly
terrifying. Fish is the primary source of
animal protein for about one sixth of the
world’s population. I ask you to consider
what the world will be like when the fish
stocks have all but disappeared; when the
ecosystems of which they are a crucial
part break down with consequences that
we have barely begun to understand, and
when the full social ramifications around
the world start to make themselves
known.
It is not just marine life that is suffering.
Many coastal towns and villages around
the world that once thrived on the riches
of the sea have already become hollow
shells of the vibrant communities they
once were, and still ought to be. If fish
stocks decline further, this situation will
only become more common. In many
cases, their livelihoods are already at
stake. And then what? Many will have
no choice but to turn to piracy; others
will have to move, with all the risks of
conflict over scarce resources and mass
migration. Make no mistake – we are
talking about increasing threats to global
security on a grand scale.
… that profit is not important. Of course it
I have used fishing and the health of
the world’s marine ecosystems as my
example, but even if you do not deal
with fish, I hope you can see that this
problem follows the same pattern of so
many other sectors within your business.
Cutting down the world’s rainforests,
for instance, to feed livestock that are
thousands of miles away or to produce
palm oil, not only destroys the vital
biodiversity of the forests and pumps
more carbon dioxide into the atmosphere
than the world’s entire transport sector,
it also reduces the amount of rainfall
that falls on important farmland in many
regions of the world. Once again, it
erodes an element of Nature’s capital at
an alarming rate, even though Nature’s
capital is the very bedrock of the kind of
economic capitalism we have come to
take for granted. It weakens the chain
that actually binds our welfare with that
of the Earth’s. I do sometimes wonder
why we are so dogged by a form of
collective hubris that blinds so many of us
as to why the chain is becoming so weak.
In each of these examples, the line runs
directly from far-away farms and fishing
zones to the consumers of the world
and, therefore, ultimately, to you. You
are the gatekeepers. And, as such, you
have a vital role to play, not just as the
purveyors of fine food, but as advocates
and as educators. Whether we like it or
not, the situation facing us has changed
dramatically. If we are to protect the
future, you will, I am afraid, have to shift
your way of working to look at the next
ten or twenty years rather than just
the dividend paid to your shareholders
next month. You will have to recognize
that you are as much an access point
for information as newspapers and
television. In fact, possibly bigger. Not
everybody reads newspapers or watches
television, but everyone shops, and how
else will people really know what they are
buying if you do not tell them?
The retail and food producing sectors can
no longer act with any complacency. You
do not simply manage a neutral conveyor
belt that moves food and consumer
goods from the field and factory to the
shop floor and then to the home, and
your target surely cannot just be the
maximization of profit. That is not to say
is. But it has to be achieved in a way that
embraces the wider cost to the Earth.
And that means a much more inclusive
bottom line. The cost to the Earth and the
cost to future generations must become
a part of the calculation of the cost of
production.
As I close, I hope my point has become
gradually clearer. You really do stand
at the bridging point between the
maintenance of natural ecosystems, the
products dependent upon their healthy
functioning and the food security of
future generations. Things have changed
radically since we were all younger and
everything was taken for granted. You can
now make all the difference.
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