Countdown To Zero
On the contrary, it is a quite wonderful confection. It’s delicious, refreshing, good with food, good on its own and readily available in a variety of convenient, easy-to-pour packages. People the world over have cherished Coke for a century and a quarter. Needless to say, it is the very foundation of the $50 billion company that peddles it.
Oh -- and it is killing people.
The tragic fact is that Coke is increasingly not consumed responsibly. It has become a dietary staple for countless millions and is consumed so immoderately that the incidence of obesity and Type II diabetes is off the epidemiological charts. The Coca-Cola Co. is surely not the sole contributor to sugar overdosing, but it is by far the most visible -- and has plenty to answer for. Because no matter what corporate mumbo jumbo the executives promulgate, in a global marketplace of virtual ubiquity, the business has depended on the single-minded focus on greater per-capita consumption. Period.
And some of those capitas die.
While issuing empathetic statements about joining hands with all stakeholders to solve the obesity problem and talking up the vast array of sugar-free options in its portfolio, the corporation has continued to measure itself and compensate managers according to the standard metrics of brand growth. In the current environment that creates three inexorable conditions the company must finally come to grips with.
1) Moral imperative. As a matter of pure right and wrong, the brand must do what it must do to save hyper consumers from themselves.
2) Pragmatism. This is the Relationship Era. Brands are judged not merely on the intrinsic qualities of their goods, but on the behavior, values and comportment. If Coca-Cola cleaves to the status quo -- never mind its moral responsibility or legal liability -- it will be harshly judged by the public. By the same token, the corporate entity that acts first (against its superficially obvious self-interest) will be richly rewarded in admiration, trust, gratitude, loyalty and the other priceless assets of the total-transparency world we now inhabit.
3) Government. In time, via legislation, regulation and litigation, the decisions will be taken out of corporate hands. Just ask Big Tobacco. The penalties for inaction loom just over the horizon.
So then what? People love Coca-Cola. The situation demands less Coca-Cola. The marketer is the Coca-Cola Co.
Just look at the Campbell’s Soup Co. Their core product line is a salt lick in a can. Under societal pressure for decades, the company has tried to respond to public health concerns with a series of lower-sodium products -- all of which have flopped because people just don’t like them. The difference between salty processed foods and less salty processed foods, to paraphrase Mark Twain, is the difference between lightning and a lightning bug.
Likewise, McDonald’s and saturated fat. You can offer all the side salads you want; a Big Mac is not only de-freaking-licious, it fills you up. Which is why people want to eat them.
But within those two examples -- and by the way, also within the Coca-Cola Co.’s thus-far empty rhetoric -- resides the answer. There is an obvious, existing and eminently palatable alternative to brand Coke.
Marketed till now as the Diet Coke for men, it can -- and must -- be transformed into the new New Coke. Not necessarily all at once -- the way the first New Coke was infamously launched back in 1985 -- but gradually, with the cooperation of bottlers worldwide. This is no low-sodium Campbell’s situation; the Coke and Coke Zero taste profiles are nearly identical. The Coca-Cola Co. has it within its distribution and marketing power to push Zero and minimize sugared Coke. Soon, as the folks at the old Miller Brewing Co. could testify, the low-calorie cart will be pushing the horse.
Look -- there will obviously be pushback from consumers, bottlers and retailers (like McDonald’s, as a matter of fact) and corresponding erosion. On the other hand, gross margins should improve. The sweetener in Zero costs significantly less than high-fructose corn syrup or any other sugar, for that matter.
Meanwhile, the first-mover advantage is incalculable. To be a corporate hero once upon a time was nice for everybody’s ego but useless at the cash register and Wall Street. As Google, Amazon, Zappos, Apple and Whole Foods can tell you, not anymore. Accounting rules remain beholden to an outdated world view when it comes to booking goodwill as an asset, but a priceless asset goodwill most certainly is. If I had the choice of which global swill juggernaut I wished to be, I’d prefer to be the one that risked its own business to save lives.
Even though the real risk is to be the global swill juggernaut that does not.
Can we revisit the New Coke episode for a moment? Everybody recalls it as a business blunder of historic proportions. The Coca-Cola Co. asked which flavor consumers preferred, and when the blind-taste tests ruled overwhelmingly for the sweeter new formula, Atlanta pulled the trigger.
Alas, they had asked the wrong question. Instead of “Which cup do you prefer, A or B?” they should have asked, “Do you want us fucking with your Coca-Cola?” The answer, history tells us, would have been a resounding “no.”
But that episode confers two pieces of guidance. First is the ultimate truth that neither the Coca-Cola Co. or its shareholders own the Coke brand. That ownership is shared among all stakeholders, chiefly consumers…who are damn near everyone on earth. The needs of those many must trump the short-term interests of the executive few.
Secondly, through their notorious blunder the Coca-Cola Co. blundered into a fortune. The New Coke fiasco was about as tragic as Jed Clampett missing the possum. The brand-extension mania it spawned helped Coca-Cola Co. change the grocery marketplace by squeezing marginal competitors right out of the aisle. Corporate market share soared.
In other words, the obvious is not always obvious. In the current circumstances, the way to not only preserve but boost the Coca-Cola Co.’s fortunes is to diminish Coca-Cola. Or, put yet another way: the future is a zero sum game.