The four-day shoot did indeed cover the original Italian hillside, but fashioning commercials required more elaborate preparations than eighteen years before. “We had to wake the kids up at 4:30 a.m.,” producer Scott Seltzer recalled, “to get there in time for wardrobe, breakfast, make-up, and trundling up the hill. We had tents, food service—it was like a small army on maneuvers.” By 9:30 a.m., the hot, tired children were crying for their parents, and production assistants, makeup artists, and wardrobe specialists dropped everything to comfort them. “When I did it last time, it was only half a day. I mean, it was nothing,” Linda Neary, the blonde who lip-synched the “Hilltop” introduction, wearily observed. As in the original commercial, it was not Neary’s voice that actually sang the song, but Eve Graham, the soloist from the New Seekers. Even in the opening shot of “Reunion,” when Neary told her daughter, “You know, it happened right here, twenty years ago,” her voice was dubbed to give her an American accent.
A behind-the-scenes video revealed the laborious process behind the seemingly spontaneous final product, as the director drilled the children to enunciate properly, sounding painfully like a first-grade reading lesson: “feeee-ling . . . you . . . get . . . from . . . a . . . Co . . . Ca . . . Co . . . La.” Nevertheless, when the children scampered into their parents’ arms, the scene elicited a collective gasp, even from the hardened McCann crew. It had an even bigger impact on a forty-year-old American vacationing in Italy. Trudging up the opposite hillside to see what the commotion was, he heard the faint strains of a song from his youth: “. . . and furnish it with love, grow apple trees and honey bees. . . .” He couldn’t believe it. Was he in the Twilight Zone? Just as he crested the top, the children dashed up the hill. Caught by the magical moment, the tourist burst into tears.
THE INESCAPABLE PRODUCT
What other product could call forth such strong, spontaneous emotions? None, according to repeated worldwide polls conducted by Landor Associates. “Coca-Cola is so powerful it’s practically off the charts,” one journalist marveled. Goizueta loved to cite the soft drink’s impressive figures. The Company sold over 45 percent of all the world’s carbonated soft drinks, more than double Pepsi’s record. Coca-Cola stock had appreciated more than 735 percent during the eighties, creating some $30 billion in additional stockholder wealth and more than doubling the performance of the S&P 500 index. In 1989, Goizueta submitted a revised strategy statement, looking toward the millennium. The goal for the 1990s, he wrote, was to “expand our global business system, reaching increasing numbers of consumers who will enjoy our brands and products more and more often.”
At the turn of the decade, the Company appeared poised for ten more years of extraordinary expansion. All over the world, Coca-Cola’s devoted field force sought every possible niche. In the Amazonian swamps of Brazil, thirteen-year-old Shirley Batista da Silva peddled Coke from a battered canoe. Every day in the Philippines, Valentin Lachica, a proud seventy-three-year-old, refused to leave his stand until he sold fifty cases of Coke, one bottle at a time. In South Africa, where the Company had “disinvested,” increasing numbers of lower-class blacks earned their living by hawking the soft drink from tiny outlets called “spazas.” Around the world, Coca-Cola men—sometimes father/son teams—delivered their product to the most remote locations by burro, gondola, helicopter, and ski lift. The more remote the destination, the more consumers seemed to appreciate Coke. Residents of Ushuaia, Argentina, the world’s southernmost city, drank an average of 420 servings per year.
With world momentum going Coke’s way, it seemed only a matter of time before the drink was available in every country in the world. The Arab boycott steadily eroded, with Kuwait, Saudi Arabia, and the United Arab Emirates lifting the ban on Coke. In Latin America, rebounding economies followed the Mexican lead by opening up to free enterprise, loosening price controls, and finally permitting Coke’s profits to match its volume. A gigantic new neon Spectacular lit up Moscow, opposite the huge McDonald’s that would serve its first Russian hamburger in January.
One final 1989 event perfectly symbolized Coca-Cola’s opportunity and impact. In November, before the world’s astonished eyes, the Berlin Wall fell, and as it did Coca-Cola men filled the gap, handing out free drinks. Cars lined up for miles to receive cases as they drove through the West Berlin bottling plant. When a young East German soldier stationed on a watchtower yelled down from his lonely perch, a quick-witted Coca-Cola man tossed him a twelve-pack. Western civilization and its favorite fizzy beverage poured through crumbling walls. The East Germans had watched tantalizing Coke commercials on their TV sets for years; now they could sample the essence of capitalism.
“The Coca-Cola Company is in a stronger position today than it has ever been in its history,” Roberto Goizueta observed, and no one could gainsay him. “Frankly,” Don Keough added, “we have become the benchmark for companies with global aspirations.” If Pemberton and Candler could have seen the worldwide spread of their bubbly pick-me-up, they might have been flabbergasted. On the other hand, Goizueta’s monomaniacal vision would have seemed comfortingly familiar. “Our success,” the Cuban wrote, unconsciously echoing a statement Harrison Jones made nearly seventy years before, “will largely depend on the degree to which we make it impossible for the consumer around the globe to escape Coca-Cola.”
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* Brand Coca-Cola accounted for nearly 70 percent of the Company’s overseas volume, followed by 14 percent for Fanta Orange, making Fanta, a virtually ignored name in America, the world’s third most popular soft drink.
* The BreakMate failed to find a major market, primarily because of technical malfunctions and cost.
* In 1991, Coke pulled William Hoffman out of France and back to the corporate womb in Atlanta. He had served his purpose by shaking up the French industry but was considered too abrasive for the long haul. French per capita continued to rise, however.
* As a result, the Company launched “The Moment That Refreshes” (Sawayaka Ni Naru Hitotoki), a variant on the old “Pause That Refreshes” theme. These ads were aimed at hardworking, stressed adults rather than indolent teens. Coke used the word “moment” because Japanese presumably would resent the idea of “pausing.” Nevertheless, the Japanese market would suffer as Japan entered a prolonged period of economic decline in the 1990s.
~ 21 ~
Global Fizz
Coke may have created the closest thing we know of to a perpetual motion machine.
—Financial analyst David Goldman, 1996
If you look in your kitchen sink, there’s one spigot that has a C and another spigot that has an H. That spigot that has a C should be used for what God intended.
—Roberto C. Goizueta, CEO, The Coca-Cola Company
Entering the last decade of the twentieth century, the efficient Coca-Cola juggernaut prepared to flood the world, setting the stage for what Roberto Goizueta hoped would be a millennial celebration of unquestioned global dominance. During the penultimate decade of the 1980s, the Coke CEO had revamped and refocused the Company. Now, he saw with perfect clarity that the fall of the Berlin Wall signaled the crowning opportunity of his career. “Every day, every single one of the world’s 5.6 billion people will get thirsty,” he observed early in 1994. “Only in the last few years have world events allowed us true access to more than half of those people.”
Late in 1989, Doug Ivester, the bright accountant who had invented the 49 percent solution that created Coca-Cola Enterprises and allowed Big Coke to invest in bottlers around the world, had been handed his first operational Coke role in Europe, a kind of testing ground for the up-and-coming executive. During the evening of January 8, 1990, Ivester and Heinz Wiezorek, the head of the Company’s West German subsidiary, strolled through Alexanderplatz, the main square in East Berlin. Construction cranes towered over them, while newly energized citizens socialized. “We looked around us and said, ‘Let’s do it,’” Wiezorek recalled. “We decided to start selling Cok
e for East German marks.” When Ivester talked it over with Goizueta, he warned the CEO that he wasn’t sure how they would get paid. “I don’t care,” Goizueta said. “Just ship the product.” The gamble paid off nine months later, when East and West Germany united, and the two currencies were given equal weight.
The move into East Germany, with its seventeen million new customers, exemplified Goizueta’s new mantra that the soft drink behemoth had to be fast, focused, and flexible. “You need to shorten your reaction time by using your instincts and your experience,” Goizueta emphasized. “We are relying more on our gut feelings.” It also showed that the Company was determined to continue to strengthen its worldwide bottler system on a country-by-country basis, forming joint ventures with big, aggressive bottlers. In the early 1990s, for instance, Coca-Cola Amatil, the huge Australian bottler half owned by Big Coke, would move into Austria, Hungary, and Czechoslovakia, as well as Indonesia, Papua New Guinea, and New Zealand.
East Germans gulped Coca-Cola as though they had never had a decent soft drink before—mostly because they hadn’t. The foamy, foul-smelling Hit Cola, the socialist beverage, sometimes contained bugs and other surprises. Everyone was delighted when Coca-Cola red replaced KGB red, as in Leipzig, where a huge Coke flag hung from the side of the town’s once-dreaded secret police headquarters, while hundreds of people lined up at the city’s first Coke kiosks. “I get at least 50 letters every day asking how to get Coca-Cola,” an amazed East German Coke official told a reporter.
In February 1991, the Company upped the ante, promising to sink $450 million into East Germany alone, to upgrade outmoded government plants and transform 1,500 ex-Communists into devout Coca-Cola men and women. “Coca-Cola is a lucky break for Weimar,” one city official observed of the new bottling plant there. “We’ll get three to four hundred recession-proof jobs, a steady corporate taxpayer and a major purchaser of goods and services from area companies.” Within two years of the fall of the Berlin Wall, sales soared from zero to 1.7 billion drinks. It was, as one industry analyst noted, “the soft drink equivalent of the Marshall Plan.”
A GLOBAL BLITZKRIEG
Few marketing gurus were surprised by Coke’s swift surge in East Germany, whose citizens had watched Western advertising on their televisions for years while yearning for consumer goods they couldn’t get. Eastern Europe and Russia were another matter, however. There, Pepsi had long dominated. Determined to come from behind there, too, Goizueta and his board committed an even $1 billion, to be spent by mid-decade on what they called Project Jumpstart. Previously, Coke products were sold in small amounts for “countertrade,” barter for shoddy products. Now, the Company invested directly in Poland and Romania. “Coca-Cola,” said a senior Romanian official, “is the symbol of our new life. It brings jobs and color to our streets.” Crowds gathered to cheer the arrival of the first Coca-Cola truck in Warsaw, reminiscent of the welcome given the liberating U.S. tanks of World War II. By the end of 1993, Coca-Cola had taken the lead from Pepsi in all of the former Eastern Bloc countries. In Albania, which had no regulatory code for foreign investment, Coke lawyers obligingly helped write laws to ease entry for the soft drink.
As the Soviet Union disintegrated, Coke formed a Ukrainian joint venture, as well as a partnership in Moscow to fund a syrup plant and two thousand kiosks throughout the city. Symbolically, in a kind of modern swords-into-plowshares, the round metal kiosks were produced by the same factory that had made Soviet missiles. The Company announced that it would build another huge bottling plant in St. Petersburg. Because of desperate economic conditions, Coke could hire overeducated new employees. One former physicist, now a soft drink salesman, gratefully pledged all of his energy towards growing the Coca-Cola worldwide business.
Undeterred by the 1989 massacre in Tiananmen Square, Coke continued to expand in China, establishing joint ventures with the Chinese government as well as Hong Kong’s Swire Group and the Kerry Group, run by savvy Chinese businessman Robert Kuok. By 1993, there were thirteen bottling plants already in place near the more populous coast, and the Company had received approval to build ten new facilities in the interior, capping a $500 million investment there. “The government now sees Coca-Cola as a symbol of China’s ‘socialist market’ economy,” a Coke executive exulted.
The young revolutionaries who once faced tanks eagerly embraced Western culture, including Coca-Cola and disco dancing. They wanted to make money and spend it on consumer goods. In crowded Hong Kong, Swire built the world’s tallest bottling plant, fifty-seven stories high, indicating its faith that, when Hong Kong joined China in 1997, nothing would deter the fizzy onslaught. Despite persistent rumors that the soft drink was laced with addictive drugs and caused impotency—familiar historical problems—its market grew swiftly, up 38 percent in 1993, bringing the annual Chinese per capita consumption to two Company drinks a year, and offering an enticing vision of potential future growth in a country with a billion people.
After a sixteen-year enforced absence because it refused to divulge its formula to Indian officials in 1977, Coca-Cola returned to India in late 1993, forming a strategic alliance with Parle Exports, the nation’s largest soft drink company, and moving quickly to upgrade existing plants. Goizueta salivated over a virtually untapped market of 840 million people. As in China, the Company paid new entrepreneurs to wheel tricycle Coke carts down alleyways to bring the bubbly drink to new customers. “I used to drink Coke 20 years ago,” one fifty-year-old Indian spectator recalled as he hugged a Coke official during the opening ceremonies for the first Coke bottling plant in India. “I will drink it again.”
“Just as nature abhors a vacuum,” observed one Coke executive in 1992, “so the Coca-Cola system abhors an untapped opportunity.” Coke returned to any country where conditions looked a bit more stable. When the war in Afghanistan eased, the soft drink came back. When the repressive Marxist regime in Ethiopia was overthrown, Coca-Cola men turned up in Addis Ababa to do business with the victorious rebels, as they did with the old government. Soon afterwards, the soft drink was available in the newly created splinter nation of Eritrea. After a hiatus caused by civil wars, Coke reappeared in Angola and Sudan. As the U.S. trade embargo on Vietnam looked like it might be lifted, Coke formed a joint venture with a Saigon bottler, ready to jump back in.
Although the Arab boycott officially had ended, bottling rights in Saudi Arabia bogged down in a bitter interfamilial lawsuit, and re-entry into the market there was temporarily delayed, just as Saddam Hussein invaded Kuwait and Operation Desert Storm commenced. Frustrated by Pepsi’s Saudi Arabian inside track, Coke dispatched refrigerated semitrailers across the desert from Al-Ain in the United Arab Emirates with twenty thousand cases of free drinks, accompanied by a military escort. Coke hired photographers to snap candid pictures of soldiers enjoying the all-American drink and sponsored USO programs.
Meanwhile, with falling trade barriers and government deregulation to permit higher prices and larger package sizes, Latin America opened wide for more Coke. In 1993, the average Mexican drank 306 servings of a Coca-Cola Company soft drink—3 more per year than Americans. The same year, Chile’s consumption rate climbed 16 percent. As the Sandinista regime ended in Nicaragua, Coke moved in again. In Guatemala, there was relative peace at the troubled bottling plant whose union employees had been killed by death squads a decade before, though several Coca-Cola union workers involved in political theater were threatened, beaten, and murdered.
In South Africa, in February 1990, Nelson Mandela, seventy-one, was finally released from his twenty-seven-year incarceration, emerging a heroic symbol of freedom and justice. While on his triumphant 1990 American tour, Mandela snubbed Coke’s offers of help, raising the hopes of Tandi Gcabashe and her boycott. “They [Coke representatives] are not the kind of people we do business with,” an African National Congress member said. “They are making money off us. Apartheid is good business for Coke.” South African black activist Desmond Tutu and Coretta Scott Kin
g, widow of the slain civil rights leader, praised Coke, but to no avail. The soft drink was banned from hotels at which Mandela stayed, and he pointedly drank Pepsi during his Atlanta visit.
Soon, however, Carl Ware, Coke’s persuasive black executive, befriended Mandela, who pressured the African National Congress to call off the boycott. Behind the scenes, Coca-Cola worked feverishly to help ease what they perceived to be the inevitable end of apartheid.* Ware assured Mandela of the Company’s support in a new black-run regime. When Mandela again arrived in Atlanta three years later, in July 1993, he stepped off of a Coca-Cola corporate jet along with Carl Ware, and Coke squired Mandela about the city and hosted a luncheon for him at the Ritz-Carlton. When Mandela received an honorary degree from Clark Atlanta University, Ware—the head of the college’s board of trustees—gave a raised fist salute as the choir sang “Lord Bless Africa.” At a fund-raising dinner, Mandela explicitly acknowledged his debt to the Coke executive: “Mr. Carl Ware has shown a quiet commitment to the problems that bear on our country,” he said. “He has quietly helped the ANC stand on its feet. I want to acknowledge publicly that he has done this.”
Despite the global recession of the early 1990s, the soft drink giant grew inexorably around the globe. There were always trouble spots somewhere, of course—Japan and Europe had cold, rainy summers in 1993—but all the factors for continued expansion were in place. It had taken over a hundred years for the Company to make $1 billion in annual net income in 1988, but it took only another five years to break $2 billion a year in 1993.
For God, Country, and Coca-Cola Page 61
