The Real Thing - Truth and Power at the Coca-Cola Company

Abstract: In the book The Real Thing, Constance L. Hays describes the growth of Coca-Cola, its establishment as a national (and international) icon, and the many ups and downs the company faced in its growth, both within the US and overseas. The story of how a company that makes what is essentially sweetened, carbonated water, came to represent the face of American business for common people all over the world is a fascinating one.

 

About the Author: Constance L Hays has worked as a reporter for The News and Observer in Raleigh, North Carolina, and, since 1986, for The New York Times, where she covered the food and beverage industry for three years. She lives in New York City with her husband, John A Hays, and their children.

Even before globalization became a buzzword, Coca-Cola was a global company. It saw thirst as a universal need, and moved into countries and markets to fulfill the need. As a consequence, for decades, Coca-Cola has consistently been one of the most recognizable brands in the world. For many people, Coca-Cola is much more than a just a brand or a symbol of American business - it is also a symbol of American culture. It represents what people in many poor countries still aspire to - prosperity, happiness and the American way of life. However, this near iconic status is not without its costs. All too often, Coca-Cola finds itself the lightning rod for popular disaffection with the US Government's policies towards other countries. In the book The Real Thing, Constance L. Hays describes the growth of Coca-Cola, its establishment as a national (and international) icon, and the many ups and downs the company faced in its growth, both within the US and overseas. The story of how a company that makes what is essentially sweetened, carbonated water, came to represent the face of American business for common people all over the world is a fascinating one.

The book does not narrate the events right up to the present day; instead, it ends with the somewhat ignominious exit of Douglas Ivestor as the Chairman and CEO of the company in February 2000, and the surprise appointment of Doug Daft as the new Chairman and CEO. Much cola has been drunk since then, and Coca- Cola has gone through several more crises. Although it still remains one of the strongest brands on the planet, in the last decade, the Coca-Cola name seems to have some of its luster.

The formula for Coke was devised in the 1880s by John Pemberton, a pharmacist in Atlanta. It was purchased by Asa Candler in 1888, who then proceeded to sell the drink at soda fountains in drug stores, as a "brain tonic" and a "nerve tonic" that could cure headaches and exhaustion. The drink began to be bottled and sold only in 1894, initially by Joseph Biedenharn, a candy company owner in Vicksburg. This proved to be a good move, and within a short period, the sales of Coke in bottles surpassed its sales through soda fountains. Although several competitors and imitators appeared in the market, none of them were able to supplant Coca-Cola as the number one cola in the United States. Eventually though, Pepsi emerged as the toughest competitor to Coca-Cola. It went from being one of many Coke imitators, to being a strong competitor, by pricing its cola aggressively - offering double the quantity of its cola, for the same price as Coke.

Pepsi's growth too was almost accidental. In the 1930s, on the brink of bankruptcy, the company was looking for ways to save money. A used-bottle s dealer suggested that the company use old beer bottles (which were twice of the size of conventional soft drink bottle s) to sell its drink. After Pepsi began selling this bottle at the same price as Coke, giving customers double the drink for the same money, its sales took off, allowing it to grow to be a serious threat to Coke's dominance.

The Second World War proved to be a time of major expansion for Coca-Cola. After war was declared, Bob Woodruff, the then CEO of the company declared that he would ensure that "every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs." As American troops fanned out all over the world during and after the war, Coca Cola followed, setting up bottling plants to quench the thirst of the GIs.

Next >>