Alison Watkins was always going to quit as boss of GrainCorp this month regardless of Treasurer Joe Hockey's decision to block a takeover bid for the grains group by US food group Archer Daniels Midland.
For the past few months Watkins has been in negotiations with Coca-Cola Amatil to take over as chief executive since its boss Terry Davis said earlier this year he was leaving. This column speculated on November 5 that Watkins was a candidate and that it would tie in with the Treasurer's decision in December on the future of GrainCorp and her job.
The GrainCorp bid was derailed on Friday on national interest grounds, leaving Watkins with little option but to quit GrainCorp to take up her dream job at CCA, which she will start in March next year.
The choice of Watkins is a big tick for CCA chairman David Gonski, who has a strong track record of promoting high-calibre women. Gonski was chairman of the Australian Securities Exchange when it introduced requirements for listed companies to disclose certain diversity practices and arrangements on boards. The decision has had a profound impact on the promotion of women. To put it into perspective, since the ASX Corporate Governance Council diversity requirements were announced, the number of women on ASX 200 boards has more than doubled from 8.2 per cent.
Watkins is an inspired choice for CCA as she is independent from the bottler's largest shareholder, The Coca-Cola Company, and she has a depth of experience in retailing and marketing that few other executives in the country could match. This includes a role as chair of Mrs Crocket's Kitchen, giving her experience as a small supplier to the two big supermarket chains. She has also seen the other side of the fence, with a stint as non-executive director at Woolworths, boss of Berri, which CCA tried to buy a few years ago but was stopped by the competition regulator, and boss of GrainCorp, which undoubtedly honed her skills in politics.
She will join CCA in March, not long after a non-compete clause expires that prevents CCA producing and selling beer in Australia. CCA's outgoing boss Terry Davis has long talked up alcohol as a key growth lever for the bottler. Indeed in April 2007 he believed the bottler would become the third-largest beer operator by the end of 2012. This was never tested as it sold its 50 per cent interest in a premium beer joint venture with SABMiller to the South African brewer. Part of the deal included signing a non-compete clause not to sell beer in Australia until the end of 2013.
Davis didn't give up the dream and to this end set in place a $50 million joint venture brewery that will allow CCA to re-enter the beer market. It will be interesting to see whether Watkins embraces a return to beer in Australia with the same gusto as Davis has.
However, the dynamics in the beer industry have changed in the past few years and a few investors are concerned that an aggressive beer strategy may cost too much. CCA recently announced a distribution deal with US brewer Samuel Adams to join a few other brands. But it will take a big effort given most of the big beer brands are sewn up by the Lion and Carlton & United Breweries heavyweights.
Some investors hope Watkins will pull back on beer and look at growth opportunities in areas such as flavoured milk or ice-cream.
Davis did a good job at CCA, including creating a more performance-oriented approach, in place of the previous culture of promoting volume growth. Indeed in eight out of 11 years he has delivered double-digit profit growth.
But times are getting tougher, particularly as consumers turn to healthier drinks rather than sugary soft drinks. At the same time competitor Pepsi has been dumping product on the market at big discounts, in some cases at price differentials of 50 per cent, which has hit CCA's soft drink volumes.