Commentary

Countdown To Zero

by Bob Garfield , Featured Columnist, July 22, 2013

Previously in this space, we discussed the predicament of the Coca-Cola Co. Its eponymous brand is the most famous, most ubiquitous and arguably most valuable in the history of commerce. Coke is not a health food -- fizzy sugar water is pretty much the definition of empty calories -- but when consumed responsibly is absolutely harmless.

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.

Coke Zero.

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.

beverages

12 comments about "Countdown To Zero".

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Shane Steinfeld from Editorial Projects in Education, July 22, 2013 at 11:20 a.m.
Wow -- This is scary: Coke being easy to find, easy to pour, and "tasty", is causing an epidemic of obesity?? Coke must, "save consumers from themselves??" Coke is, "killing people??" For an article published in a marketing newsletter, I sure am having a hard time buying it.

How little respect for people must the author have to say that his readers can't make good decisions for themselves? How little respect to say that he knows what's better for little o'l you and me?

"...there will obviously be pushback from consumers, bottlers and retailers."
"...[Campbell's Soup] has tried to respond to public health concerns with lower-sodium products -- all of which have flopped because people just don't like them."
"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."

Yes, but,

"In time, via legislation [and] regulation..., the decisions will be taken out of corporate hands."

So you want politicians, elected by the majority, to take away something that the public wants?? That doesn't sound likely.

Healthier options will come, but they will come as more & more people start to to look for them. Maybe I'm taking for granted how simple a concept it is, but businesses don't thrive by ignoring what the public wants.

"If Coca-Cola cleaves to the status quo...it will be harshly judged by the public."

Yes! Now you've got it right.
Well said, Mr. Garfield. Well said.
Reply

Edmund Singleton from Winstion Communications, July 22, 2013 at 11:29 a.m.

When the Mayor of the City of New York says that surgery drinks are killing us, he is attacked as being a 'job killer'. If one attacks dirty coal which has been proven to be bad for the environment, is a job killer too, as the workers march to work wearing a breathing respirator with persistent thirst because of their diabetes...they are working in and at their jobs...

Philip Moore from Philip Moore, July 22, 2013 at 11:41 a.m.

A young single NBA player walks into a nightclub. He is immediately surrounded by women eager to engage in relations with him. He sees one he likes, points at her, and they start for the door. Just as they are about to slide into his Ferrari, the good-for-you police swarm the scene. They pull the woman out of the car and send her sobbing back to her friends.

Rob Frydlewicz from DentsuAegis, July 22, 2013 at 11:50 a.m.

I've always been a fan of Coke Zero. Like you said, Bob, it tastes just like regular Coke. And since I don't drink mass quantities of it, I'm not concerned about developing a second head. Of course, my embrace of Zero may have been easier for me because I stopped drinking sugared sodas 30 years ago after reading "Sugar Blues".

Zachary Cochran from CPXi, July 22, 2013 at 12:01 p.m.

The key question here is: How does Coca-Cola Co. build a positive reputation while offering a product that is becoming increasingly taboo? This is a time for Coca-Cola Co. to exhibit leadership. If they do not, regulators may successfully force their hand (aka Mayor Bloombergs of the world). Is Coke Zero the way forward? I think not. As far as I can see, most of my friends (Millennials) prefer the non-diet versions of soda. Frankly I'd rather not drink soda than drink diet soda. Coke is an iconic brand and will not be unseated overnight or even in the coming years. But their future is not guaranteed, and upstarts like Sodastream may start to disrupt their market more and more. I believe the best way for Coca-Cola Co. to exhibit leadership is by gradually changing their core product offering to follow market demand while emphasizing social responsibility through initiatives paid for by the brand to combat the problems they are causing, and educating publics about the dangers of a diet too saturated in sugar. The worst thing anyone can say about Coca-Cola is that they make the world a worse place to live; conversely, the best thing they can do is actually make it a better place. How? Yes, building trust, being moral, and ultimately seeking their customers' good rather than simply their investor's profits.

Steven Cherry from TTI/Vanguard, July 22, 2013 at 12:37 p.m.

I suppose it's irrelevant that changing the default Coke into a zero-calorie product is unlikely to reduce obesity even a little bit.

Bob Garfield from MediaPost, July 22, 2013 at 12:57 p.m.

Steven,
Not irrelevant, but irretrievably stupid. We are talking about billions of calories being phased out of the world's diet.
Bob

Grant Bergman from SurveyConcierge.com • GrantBergman.com, July 22, 2013 at 1:24 p.m.

Let's not forget that, for many, the sugar in soda has a pleasant short term biological effect (in contrast to the longer term hazards of excess consumption) that Coke Zero cannot deliver. Coke and Coke Zero may taste nearly identical, but the combination of caffeine and fast-acting sugar delivers a different experience from caffeine alone. Careful scrutiny would, I suspect, demonstrate that the "sugar rush" is an important contributor to excess soda consumption. (As an only occasional soda drinker, and diet at that, I'd love to hear what sugar-drinkers say about this.)

Douglas Ferguson from College of Charleston, July 22, 2013 at 5:22 p.m.

Soda? That's the drink that's ruining people's lives? What about beer? Oh, no, don't go near that sacred cow of beverages.

Bob Garfield from MediaPost, July 22, 2013 at 5:49 p.m.

Douglas,
Beer? Huh?
See, the subject isn't beer. It is sugared soda. Do you not see that those are different things? One is beer. The other is soda. Why not ask me about why I'm addressing soda instead of malaria or war?
In short, your criticism is both a non-criticism and a non-sequitur.
BG

Allan Breiland from Millward Brown, July 24, 2013 at 3:07 a.m.

Bob - have you seen this?

http://www.bandt.com.au/news/advertising/coke-to-fight-obesity-with-new-campaign

Steven Herron from IssueTrak, July 25, 2013 at 11:35 a.m.

I agree with @Shane Steinfeld here. Consumers has responsibility for their own actions. Nice to see that @Allan Breiland posted the link since I do agree that brands can use their marketing expertise to help influence consumers. Merely exchanging one poison for another is hardly a redeemable action by a brand.

http://www.livestrong.com/article/459650-is-aspartame-poisonous/