Focus: Can they still sell the world a Coke?

Forget about Belgium. Coca-Cola is in trouble right across the globe

When the Berlin Wall came down in 1989, one group of people reacted with lightning speed. Sensing an opportunity, they were soon out in force at the border crossing points, and within days they had forged through into previously forbidden territory. This was not the Central Intelligence Agency or MI6: it was Coca-Cola.

The company handed out thousands of bottles to East Germans crossing to the West, and within months was buying up the old state-owned bottling plants. Coca-Cola even helped pay for the unification ceremony in 1990 in its pursuit of the new market. For this had been Pepsi territory, unconquered land that, with the end of communism, became open to the red and white machine from Atlanta.

Coca-Cola is not an ordinary company: it is a brand, a marketing idea that combines a crusade, a credo and a machine for printing money. It is essentially an organisation that sells brown sugared water. But if you think about it that way you will never understand how it came to be the world's single best-known product, how it was woven into global history after the Second World War, or how it came to grief when a few dozen Belgian and French children suffered bad stomachs after drinking a can each last week.

Those few dodgy tummies are a minuscule proportion of the global market for Coke, perhaps 200 cans out of nearly 400 billion sold every year. It is not even certain that Coke was responsible for their illness. The company has said it may have been the result of a problem with a chemical sprayed on a pallet.

But the problem for Coke is much bigger. It is probably the world's most global corporation, the symbol of the vast explosion of transnational capitalism in the 1980s and 1990s, and it is sick to the stomach.

The European hitch is only one of many problems that the company faces. Its hyper-rapid expansion into new markets in the last decade has hit trouble as economic crisis has struck Asia, Russia and Latin America, halting sales growth there and raising questions about its massive capital investments. Its attempts to buy the overseas drinks business of Cadbury Schweppes has been diverted by several competition authorities, including that of the EU. It has been hit by a racial discrimination case at home. And it faces growing competition from the old enemy, the organisation referred to in Atlanta HQ only as the "P-Company" - Pepsi.

Coca-Cola was only one of many such sodas sold in America 100 years ago. But the marketing genius of Robert Woodruff, who presided over the company from 1923 until 1955, took it around the world. The US army shipped the bottles and the bottling plants abroad during the war, cementing its image as the all-American drink. The bottles, the posters, the music that accompanies the ads, the graphics and the colours created a classic. It was a central part of the creation of the New South, generating huge prosperity for Atlanta and helping to turn the city into a modern megalopolis from the sleepy southern city of a century ago.

Coke is no stranger to the perils of the global market place. It has been criticised and boycotted for ruining the environment, for allegedly turning a blind eye to the killing of union activists in Guatemala, for trading with Israel (it has been banned in much of the Arab world, and you will never find it on the table at the Iranian embassy), and for spreading the supposed evils of American imperialism. Its famous 1971 ad featuring the New Seekers ("I'd like to buy the World a Coke") and hordes of young people joining hands was in part a response to the Vietnam War: it had become risky being the all-American drink when America was itself dropping napalm on children.

Coke has stumbled in the market place before. Its most famous detour on the road to globalism came in 1985, when - weeks after Mr Woodruff had died - the company chose to alter the secret formula. It had been tampered with before, but this was a revolution, inspired - though no one would dare mention this at the time - by the Pepsi Challenge. Coke was slipping behind and it saw the answer in a new blend. "The best," announced its then chief executive officer, "has been made even better!" But the announcement triggered a furore. Within days it was re-thinking the re-think. At an emotional ceremony on 11 July 1985, it reintroduced the old formula as "Classic Coke". Television networks broke into their programming to announce it; 18,000 calls flooded the company's telephone hotline. Within months, old Coke had overtaken Pepsi again and the event served as a classic example of how to pull victory from the jaws of defeat.

It will not be so easy this time. The company has been slow to react, and seemed insensitive. The first interview given by Doug Ivester, the chief executive, on the subject was, significantly, to the Wall Street Journal, not in Belgium. This sent the signal that the company was more concerned about its shareholders than consumers, and did not help the company's case.

Coke is hardly on the ropes. It is still, by far, the number one soft drinks company in the world, selling 16 billion cases last year, or 64 cans to every man, woman and child in the world. Coca-Cola is the top brand. But its profits were down 14 per cent last year, and its stock price languishes at about 64, down from 88 last July, when the rest of the market has been exploding.

The context for global companies has been changed out of recognition in the last few years. The criticism comes faster and harder, and hits home more accurately. Bigger markets mean bigger risks. Organisations become unmanageable. Not for nothing are issues of food safety, corporate ethics, equity in the workplace and cultural sensitivity high on the agenda around the world: global capitalism has expanded at a furious rate for two decades, and the results are starting to be felt.

And Coca-Cola, more than anyone else, should know what this is all about. "It's a bit disturbing, that a big firm with worldwide fame ... did not take far-reaching measures more spontaneously and more promptly," said Belgian health minister, Luc Van den Bossche. Coca-Cola stands for more than just a soft drink, something that it reminds the rest of the world every day, but which it may have forgotten in its race for market share.

Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Arts and Entertainment
James Hewitt has firmly denied being Harry’s father
arts + ents
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Life and Style
tech
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
News
news
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Catherine (Sarah Lancashire) in Happy Valley ((C) Red Productions/Ben Blackall)
TV
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Recruitment Genius: Maintenance Assistant

    £25000 - £30000 per annum: Recruitment Genius: A Maintenance Assistant is requ...

    Recruitment Genius: Business Manager

    £32000 - £40000 per annum: Recruitment Genius: A Business Manager is required ...

    Recruitment Genius: Operations Manager

    £45000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Panel & Cabinet Wireman

    £20000 per annum: Recruitment Genius: Panel Wireman required for small electro...

    Day In a Page

    A timely reminder of the bloody anniversary we all forgot

    A timely reminder of the bloody anniversary we all forgot

    Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
    Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

    Homeless Veterans appeal

    Former soldiers pay their respects to a friend who also served
    Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

    Scarred by the bell

    The downfall of the TV star charged with bar stabbing
    Why 2014 was a year of technological let-downs

    Why 2014 was a year of technological let-downs

    Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
    Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

    Will revolutionary Cuba take 'bourgeois' golf to its heart?

    Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
    The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

    The Locked Room Mysteries

    As a new collection of the genre’s best is published, its editor explains the rules of engagement
    Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

    How I made myself Keane

    Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
    Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

    Parting view of Ofcom chief... we hate jokes on the disabled

    Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
    A look back at fashion in 2014: Wear in review

    Wear in review

    A look back at fashion in 2014
    Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

    Ian Herbert: My 10 hopes for sport in 2015

    Might just one of them happen?
    War with Isis: The West needs more than a White Knight

    The West needs more than a White Knight

    Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
    Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

    'The day I was shot by the Taliban'

    Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
    Revealed: the best and worst airlines for delays

    Revealed: the best and worst airlines for delays

    Many flyers are failing to claim compensation to which they are entitled, a new survey has found
    The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

    The stories that defined 2014

    From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
    Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

    Disaster looming? Now you know where to head...

    Which British city has become the first to be awarded special 'resilience' status by the UN?