2020 CEO Survey: Alison Watkins, Coca-Cola Amatil

It’s critical that government creates the longer-term policy settings to drive business investment, says Coca-Cola Amatil chief Alison Watkins.

What are the three enduring lessons or changes to flow from COVID-19?

One of the most enduring lessons from dealing with the pandemic has been just how much can be achieved when all stakeholders — across business, government and the wider community — work collaboratively towards a common goal. It’s vital that we maintain this climate of collaboration as we continue to manage the health risks associated with the pandemic, and as we look forward, how we respond to the critical economic challenges and opportunities that lie ahead.

We have a significant opportunity to reposition Australia for the future, to build a stronger, more productive and better nation, but to do this, we’ll need to maintain the collaboration and goal alignment that we’ve seen between all stakeholders during 2020.

Another enduring lesson has been the critical importance of effectively managing major health risks, such as COVID-19, and how this can impact economic recovery. What we’ve seen is the importance of acting early and decisively in managing the spread of the coronavirus. Having robust testing, tracking, tracing and isolating processes is critical, and as a country, being uncompromising in these areas. By doing this, we minimise the need for wide-scale, prolonged lockdowns and the more severe economic impacts that accompany these. The reality is we’ll be living with this virus for some time to come, and for the foreseeable future, it is about quickly adapting to a new normal, and operating in a COVID-safe way.

In terms of changes flowing from the pandemic, one of the most significant of these has been the acceleration in digital adoption across all aspects of society. As a business, we’ve seen first-hand how the pandemic has changed the way consumers shop with the growth of online and low-touch activities and how our customers have had to respond, while for many of our employees, the need to work remotely has seen a change in where and how work is conducted. Like many businesses, we’ve had to quickly adapt to these changes and we’ll need to continue to do so in order to be successful. As more business is conducted online and as more people work or study from home, the focus now needs to be on accelerating the digital economy and helping to fast-track digital enablement, particularly for small- and medium-sized businesses.

How would you rate the shape of the Australian economy as we head into the new year?

Australia entered the pandemic in a relatively strong economic position and we’ve been more resilient than many other countries during this period. We’ve done a good job overall in containing the virus, our public institutions have worked collaboratively, and the ability to tap into our strong public sector balance sheet has helped to lessen the economic shock. This is a good foundation for our economy as we enter 2021.

Like many, I am concerned about the impact of the fiscal cliff in March next year when government support will be wound back. Creating jobs and restoring consumer and business confidence will be critical to the recovery. Confidence, like our control of the virus, has been hard won but remains fragile. Overall though, I’m optimistic about our prospects for a robust recovery.

What three reforms are needed to sustainably grow the economy?

In considering how we come out of this stronger and how we grasp the opportunity to position ourselves for long-term, sustainable growth, I believe the focus needs to be on policy reform that supports businesses to create jobs and restores consumer and business confidence. It’s critical that government creates the longer-term policy settings to drive business investment, with my three reform areas being: boosting productivity by upskilling workers, pursuing greater flexibility in industrial relations, and overall tax reform that includes addressing the large company tax rate of 30 per cent, which is uncompetitive by international standards.

What are the three best growth opportunities for your company in 2021?

Like many businesses, we’ve had to adjust our plans in 2020 in response to COVID-19, closely watching our markets in terms of impacts on customers and our supply chain, while gaining valuable insights on changing consumer habits and working closely with our customers to add value. We’re fortunate that we’ve been able to do this from a position of strength — with a healthy balance sheet; market leadership positions and strong brands across our regions; a unique production and distribution platform; extensive route to market channel presence; and a breadth and strength of relationships with our customers.

As we head into 2021, we can expect to see further volatility across our geographies, and so it’s important that we continue to play to our strengths, while remaining agile in how we respond to further changes in order to capitalise on the opportunities.

The first area of opportunity for Amatil is reshaping our portfolio to meet changing consumer demand. This includes responding to the move to brands that people know and trust, the growth in in-home consumption and entertaining, and an increasing focus on affordability. For us, this means an exciting opportunity to look at things like our multi-serve range and pack-size options.

The second area of opportunity is driving strong performance in high-demand products, such as our core range, which includes Coca-Cola low- and no-sugar options, as well as our energy category. The third area of opportunity is amplifying our online presence and enhancing our product range across e-commerce platforms.

In realising these opportunities, the cornerstones for our success will be taking a very targeted approach by market and channel, leveraging our data driven initiatives, and maintaining a customer-centric focus across all aspects of our business.

What impact will digital transformation have on your company?

According to our own data and data from broader industry, it’s clear that COVID-19 has changed the way consumers shop. We’ve seen an acceleration in the growth of online and low touch activities, from consumers purchasing groceries online, purchasing food takeout/delivery online, buying online for in-store pick-up and using drive-thrus. And in our own business, for example, we saw a structural shift to online, particularly during the initial lockdown phase in Australia, with many of our Quick Service Restaurants experiencing substantial growth in the use of food aggregators like Deliveroo and Menulog.

We adapted quickly, recognising that many of our customers selling food would move to takeaway and delivery only. We helped customers pivot and quickly reshape their businesses, facilitating e-commerce and aggregator opportunities to help sell online. We expect to see this acceleration in digital adoption continue, and this will present further opportunities for growth in areas such as e-commerce. Important considerations for us include being well presented in our various routes to market, ensuring we create the right consumer experience across our channels, and digitising the way we work with customers.

How would you rate business, state and federal government performance this year?

2020 has presented some huge challenges to all Australians, from bushfires to COVID-19, and it’s important to also acknowledge that many existing challenges continued in parallel with these crises. It’s heartening to see that Australia, while not unscathed, has emerged in a stronger position than most countries in terms of managing the health crisis and the state of our economy.

I’d rate the performance of our government and business sectors as very good. For example, institutions like the National Cabinet brought together state and federal governments in a generally collaborative and focused way. It hasn’t all been smooth and uncontentious, but that is the nature of politics, particularly during a once in a century crisis. Federal and state governments have also invested heavily in stimulating the economy and this crisis has highlighted the value of close engagement between businesses and the public sector − when this works well, we’ve seen it can really make a difference in tackling a common challenge like COVID-19.

It has been a tough year for many businesses, for some the most challenging on record. I continue to be inspired by the resilience of Amatil’s customers, from the hospitality businesses which have begun to open up in Victoria through to the large supermarkets which have sustained us during lockdown. We’ve seen hardship and loss but also we’ve seen extraordinary ingenuity and flexibility. I think that while this crisis has exacted a terrible toll, in the longer term it may have helped to forge a new generation of business leaders and entrepreneurs.