- Coca-Cola Amatil’s total sales volumes slumped 33% in April 2020 as pandemic lockdowns came in.
- Alison Watkins FCA steered the business to cut costs, take stock and reprioritise.
- She is keeping a keen eye on future opportunities and goals including sustainability targets.
Story Felicity McLean
Photo Nic Walker
“It’s certainly been a unique half,” says Watkins of the first six months of 2020, speaking to Acuity just days after Coca-Cola Amatil (Amatil) reported its half-year results and ongoing net profit after tax fell 35% to A$112.1 million.
Total sales volumes across Amatil slumped 33% in April as the coronavirus pandemic prevented consumers from sharing a Coke in restaurants, bars and cafes.
As airports emptied and vending machines sat stocked but untouched at train stations and sports stadiums, Australia’s largest non-alcoholic beverage company saw a significant decline in “on-the-go” channels.
“In Australia, we had the [2019-20 Black Summer] bushfires as well so, for our Australian business, we’ve literally not had one normal month in 2020 … It’s been an extraordinary time,” Watkins observes.
Picture: Alison Watkins FCA.
How a pandemic cruelled Amatil’s results
While every fast-moving consumer good company (FMCG) in the world has felt the effect of the corona-economy, what makes Amatil’s results frustrating is that they come after revenue rose in 2019 for the first time since 2012 – and for the first time since Watkins took the helm in 2014.
“Coming off 2019 we were so much looking forward to showing what we were capable of in 2020,” says Watkins, whose decisive leadership has steered Amatil during a tumultuous time.
Still, Amatil managed to grow its market share during the nadir of the COVID-19 shutdown. How did Watkins do it?
Amatil had to reprioritise in a crisis
Cost cutting accounted for about A$60 million in savings in the first half of this year, and further action to reduce ongoing cost structures is underway.
As for job cuts, Watkins is realistic: “There are always opportunities to challenge ourselves to be more efficient and effective and leaner. It’s never easy, these sort of exercises, but the fact is we certainly have opportunities, and we have an imperative.”
Picture: Alison Watkins FCA.
“There are always opportunities to challenge ourselves to be more efficient and effective.”
She also points out that an organisation that’s fighting fit during a period of strong growth is “a different shape” to an organisation operating in a constrained economic environment.
“It’s a healthy process to take stock and reprioritise, to recognise that there are different things that matter in this [current] environment than there were previously.”
A practical leadership focus
As a senior executive, Watkins believes in practical leadership solutions. During the 2019-20 bushfire crisis, for example, her company donated 250,000-plus bottles of water and Powerade to firefighters and families on the front line.
She is taking a similarly pragmatic approach to tackling the COVID-19 pandemic, offering everything from hand sanitiser for health care workers to hands-on support for small businesses.
“In some ways the most practical thing that we can do right now is support our small business customers,” she says. “Restaurants, cafes, pubs, all [of] whom have gone through a really difficult time, particularly those customers in Melbourne.”
In March, Amatil launched a portal to help small businesses establish an online presence. It also paired businesses with food aggregators such as Uber Eats and Deliveroo – a development she believes will have “a lasting benefit” as the market shifts to ecommerce platforms.
Opportunities for the future
Indeed, Watkins is skilled at keeping one eye firmly on the future. “There can be a tendency in a crisis to throw out all of those longer-term priorities and fight the fires of today, but we really wanted to make sure that we retained that future focus and protected the core of who we are as an organisation,” she says.
“One of our values at Amatil is to deliver for today but build for tomorrow … We’re absolutely holding ourselves to account for the targets we’ve set to reduce sugar in our beverages, for example, and we’re on track for that.”
Watkins expresses ambitions to improve Amatil’s “outcomes on plastic” and to reinvent the company’s value chain, citing a recent board discussion exploring 2030 sustainability targets.
“We’re challenging ourselves on emissions reductions and how we might set more stretching targets,” she says, calling on the Australian government to adopt a similar approach.
When it comes to growing the economy, this CA believes reform areas should “definitely” include digitising the economy, investing in skills, tax incentives for business investment and industrial relations reform with a focus on flexibility.
“There’s a lot of opportunity there if we are bold enough,” she says. “I think it’s an exciting prospect for us.”
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