Is Coke ‘Magic’, or Just Bubbly Sugar-Water?

IMG Auteur
 
 
Published : April 21st, 2014
595 words - Reading time : 1 - 2 minutes
( 2 votes, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Crisis Watch

With U.S. consumption of soda pop falling, it would appear that Coca Cola’s unwholesome ingredients are finally catching up with it.  I swore off the stuff in 1964, when I was 15 and worried that Coke would make my zits worse. What cemented my doubts was a provocative cover story in Fact, a magazine published in the mid-1960s by impresario Ralph Ginzburg that took journalistic muckraking to new heights.  In one of Fact’s notorious broadsides, the magazineasserted that drinking Coke regularly would not only cause acne, but a host of other problems, including “tooth decay, headaches… nephritis, nausea, delirium, heart disease, emotional disturbances, constipation, insomnia, indigestion, diarrhea and mutated offspring.”   If that wasn’t warning enough, Fidel Castro weighed in around the same time with a jeremiad against sugar.  It was Americans’ addiction to sweets, not Communism, he asserted, that was causing the nation to rot from the inside.

In retrospect, the dictator appears to have been onto something. Fifty years later, Americans are finally starting to take the message to heart, switching en masse from soda pop to juices, bottled war and energy drinks. The shift has been so pronounced in recent years that an industry analyst, Tom Pirko of Bevmart, was led to comment recently that “sugar water with bubbles is not the future of the world. There’s an existential issue.”  Not that a visitor from another planet could tell. The typical Coca Cola commercial would have viewers believe that the product is the very elixir of life, and that quenching one’s thirst with a cold Coke is one of the few things we humans can do that is as enjoyable as sex.

Coming Soon in a Big Way: Taylor Swift

Whether or not you believe this, even subliminally, Coke certainly seems to. Although a growing number of analysts think the company should spend less on advertising and more on diversifying its product line, the Atlanta-based company reportedly is about to “double down” on its namesake drink.  “Coca-Cola remains magical,” CEO Muhtar Kent recently told The Wall Street Journal. “We need to work even harder to enhance the romance of the brand in every corner of the world.”  To that end, the firm plans to boost last year’s $3.3 billion advertising budget by $1 billion over the next three years. Expect to see a lot more of Taylor Swift, who will be featured prominently in the campaign.

It will be interesting to see whether all of this, most particularly the impending, massive overexposure of Ms. Swift, can turn things around.  If so, we consumers are more like Pavlov’s dog than anyone outside of Madison Avenue might have imagined.  Still, the task of reversing soda pop’s decade-long decline will be daunting, since the company is shooting for growth of 3% to 4% at a time when soda pop sales have been increasing less than 1% per year. Moreover, there is growing resistance to diet sodas in particular. Coke can point to hundreds of studies that say aspartame is perfectly safe, but it remains to be seen whether consumers’ by-now hardened suspicions about this can be allayed by the ineffable charms of Ms. Swift.  Although it might be unsettling to think that an additional billion dollars of spending to advertise “sugar water with bubbles” can make us drink more of it, we’ve learned never to count out the pro-active, solution-oriented pitch men of the advertising world.  When it comes to making us crave things that we not only don’t need but which are demonstrably bad for our health, Madison Avenue has a long history of success.

<< Previous article
Rate : Average note :5 (2 votes)
>> Next article
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Take advantage of rising gold stocks
  • Subscribe to our weekly mining market briefing.
  • Receive our research reports on junior mining companies
    with the strongest potential
  • Free service, your email is safe
  • Limited offer, register now !
Go to website.