Hays' 'Coca-Cola' -- the world's greatest brand


The Real Thing: Truth and Power at the Coca-Cola Company, by Constance L. Hays. Random House. 416 pages. $25.95.

Humans evolved by instinctually responding to little signals that sometimes denoted reality. A million years later, this slavery to symbols allowed the accumulation of some very large marketing fortunes.

Coca-Cola is the world's No. 1 brand, and not just because 1 billion Cokes are sold each day.

To be outstanding, a brand must boast worldwide recognition and enormous sales. But the greatest brands display something extra, something harder to attain -- a glorious disconnect between the product's image, associations, price and other symbolic attributes and the product itself.

Can there be a wider reality gap than the one separating Coke the brand and Coke the gooey brown liquid?

Financial statements suggest that the syrup for a 75-cent can of Coke costs the Coca-Cola Co. 28 cents to render. Anybody can make it, "secret formula" notwithstanding. It's been reverse-engineered a dozen times. A little caramel, a little vanilla, a little caffeine, a LOT of sugar, a little phosphoric acid -- which stripped the floor paint from the bottling plant in which I once worked.

Anybody can make it, but nobody but Atlanta's leading corporate citizen can affix a red label with the Roman letters C-O-K-E, and therein lies the difference. The brown liquid floated an empire that my Bloomberg monitor says is worth $127 billion, which spawned an equal proportion of greed, fear, ambition, arrogance and other ingredients of drama.

This book purports to be a "definitive history," of Coke, and it probably isn't. But you wouldn't want to read the real definitive history, which would go on at great length about 19th-century patent medicines, Coke's World War II marketing campaign and so forth.

Hays' account of Coke's early and middle years is masterful. Rather than belabor Coke's global conquest decade by decade, which has been done over and over in other books, she darts around through time and space.

We begin as the ancient poets did, in the middle of the action, with Coke President Doug Ivester driving across Georgia with a film crew in tow to demonstrate that, even in 1994, even in Coke's home state, numerous retail establishments do not serve Coke. They will soon, the film implies.

Coke's early years are presented in flashback vignettes as Ivester proceeds to his unsuspected doom 300 pages later. We don't get to Coke's unpropitious invention as a cocaine-laced nostrum until almost page 100.

Hays takes a good look at the independent bottlers who are key ingredients in Coke's success and often abused by Atlanta. Much of the book focuses on Roberto Goizueta, the Cuban refugee who turned Coke into a financial dynamo and smoked himself to death by 1997. But the main character is his successor, Ivester, an apparently humorless financial type who along with Goizueta drove Coke into the excesses that characterized so much of the last decade.

Among the hallmarks of the age that emerge: obscene executive pay, secret cash pools, off-balance-sheet debt, "pipeline stuffing" to inflate sales and breathtaking over-optimism and over-expansion.

"Life is pretty much a selling job," longtime Coke Chairman Robert Woodruff liked to say. After Ivester was fired and the company eliminated 6,000 jobs, Coke recognized the limits of salesmanship, even for the world's greatest brand.

Jay Hancock is a financial columnist for The Sun. He was The Sun's diplomatic correspondent from 1999 to 2001 and its economic correspondent from 1995 to 1999. He has twice been a finalist for the Gerald Loeb Award in business and financial journalism.

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