Salt Sugar Fat (19 page)

So, for instance, meat eaters will give out on a plate of highly seasoned turkey tetrazzini much faster than they will on a serving of plain hamburger of the same size, even though the first bites of the turkey will be more exciting. Even more problematic for food manufacturers, those same meat eaters are likely to remember this the next time they go shopping and buy the plain hamburger more often. Food scientists speculate that this behavior stems from our instinctual need for varied nutrients, which are more easily attained by eating a variety of foods. Get too much of one thing, and the brain starts sending out signals of satiety, or fullness, to compel us to move on to different foods.

This was the phenomenon known as “sensory-specific satiety,” or the power of one overwhelming flavor to trigger the feeling of fullness, which would complicate the efforts of food scientists like Howard Moskowitz to hit the perfect bliss point for sugary foods and drinks. In creating products
that will sell consistently, they learned to walk a line between the extremes of an exciting first bite or sip and the utterly familiar. More than any other product, Coke had mastered this balancing act, Givaudan told the company’s marketing officer.
“They said what’s fascinating about Coke versus the other soft drinks is that it really, truly is the most balanced,” said Dunn, who was looped into the project. “When you drink it, there is no edge to it. Their analogy was a fine wine that’s balanced so you drink it and you’re not left with any kind of lingering edginess. I think, intuitively, the technical guys at Coke knew that all along. But from a marketing standpoint, this was the moment of ‘A-ha.’ ”

Givaudan’s findings remained locked up at Coke, since they weren’t exactly the makings for a flashy ad campaign. The flavor experts from Switzerland were basically saying that Coke was so dominant because of a recipe that made it
forgettable
—at least in the way the balance of flavors caused the brain to flash a continuous green light for more. To parse this out a bit, I reached out to John Hayes, a food scientist who directs the Sensory Evaluation Center at Penn State University. In evaluating the seductive powers of Coke, he drew on more than scientific expertise. In his younger days, he had been a true soda junkie, drinking
six
12-ounce cans a day until, realizing that “that was not good for me in a whole host of ways,” he cut back. Reformed as he was, I could still hear excitement in Hayes’s voice as he spoke about Coke. “From an anatomical sense, we always mention smell and taste,” he said. “But in terms of flavor, there is that third leg of the stool that everyone forgets about, and that is the somatosensory, or the touch component, and this includes things like the tingle from carbon dioxide bubbles, or the bite from chili peppers, or the creaminess. In the case of Coca-Cola, what’s so interesting about it is you’re really activating
all
those modalities. You have those nice aromas from the vanilla and the citrus and the whole family of brown spices, like cinnamon and nutmeg. Then you have that sweetness. And there’s the bite of phosphoric acid, the tingle of the carbon dioxide. You really end up stimulating all the different parts of the flavor construct that we experience.”

Still, as good as Coke is—with a world-class formula of incredible
power—it became clear to Dunn in his years at Coca-Cola that there was more than sensory power behind the soaring sales. Coke’s allure, he realized, is derived as much from what goes onto the can or bottle as from what goes into it. This is the logo, the brand known as Coke. “Everybody asks, why couldn’t you just match Coke by finding out what’s in it,” Dunn said, holding up an imaginary can as he spoke. “But once you take the trademark off, it’s a different brand.”
Studies have found that people like Coke much better when they know what they are drinking is in fact Coke and not one of the knockoff colas sold by grocery chains.

Coke’s efforts in marketing its brand were restrained through much of the 1970s, when Dunn was watching his father establish the sports endorsement business at Coke. But 1980 was a watershed for Coke, just as it was for America’s obesity rate, which had started to surge. That year, Coke switched from using table sugar to high-fructose corn syrup, which was less expensive and blended more readily with the flavoring concentrate. The revered but aging chairman, Robert Woodruff, chose an unsmiling taskmaster, the Cuba-born Roberto Goizueta, to be the new CEO. This was also the year that Coke intensified its marketing, more than doubling the money it spent on advertising, reaching $181 million by 1984.

The executive who commanded the company’s marketing at the time, Sergio Zyman, was known as a merciless pursuer of the consumer. With Zyman leading the charge, Coke hired Bill Cosby to tout Coke as “the real thing,” which implied Pepsi was not. It designed 12-packs to look like cheerfully wrapped gifts during the Christmas season, and then, being an equal-opportunity marketer, targeted Muslims by shifting its advertising to run at night during the Ramadan holiday, when they abstain from food and drink until sundown. “The job of marketing is to sell lots of stuff and make lots of money,” Zyman wrote in
The End of Marketing as We Know It
, his account of the battles with Pepsi. “It is to get people to buy more of your products, more often, at higher prices. In fact, though some marketers will tell you it’s impossible, the real job of a marketer is to sell everything that a company could profitably make, to be the ultimate stewards of return on investment and assets employed.”

To illustrate the global scope of Coke’s take-no-prisoners approach to marketing, Zyman tells the story of the crisis Mexico found itself in when the government devalued the peso in 1994. He was skiing, he writes, when he heard the grim news, and he got to a phone as fast as he could to call Douglas Ivester, Coke’s president. He urged Ivester to make sure that Coke’s operators in Mexico did not cut their marketing campaigns. Overnight, the rich became poorer and the poor got hungry, struggling with the soaring prices. But Zyman saw that as more reason to work harder at getting them both—rich and poor—to drink Coke.
“We were no longer in a battle for share of market or share of mind,” Zyman explained. “We were in a battle for disposable income. We were going to have to compete with every other product and service in the Mexican marketplace; the idea was to get in and make sure that consumers remembered to buy Coke.” The strategy worked perfectly. Coke sales didn’t slump with Mexico’s economy; in fact, they grew—three times as fast as the competition, as Mexicans from all walks of life responded to Coke’s advertising.
^*

The targeting that Coke performed in the United States was no less ruthless or importunate. “Why does Coke market?” Dunn asked me. “Why does McDonald’s market? The answer is because you’re either going forward or you’re going backwards. You do big conceptual maps, and you look at the different attributes of what you are selling, and the communication strategies. The communication is very much about, ‘How do I want to be seen as relevant to my target consumer, relative to my primary competitors.’ Relevance, salience, and competitive position all go into what Coke is today.”

The intensified targeting by Coca-Cola focused on two metrics. The first was per capita consumption, or how much Coke people drank, on average, each year. This told Coke how it was doing relative to the growing population. It wasn’t enough just to be selling more Coke. The “per caps,”
as the average person’s consumption was known, had to be going up. The second metric was market share, or how much of the world’s total soda consumption Coke owned. “Everything else flowed out of those two things,” said Dunn. “If you were growing per caps, and you were capturing market share, you’d make money.” For Coca-Cola stockholders, the years from 1980 to 1997 were especially sweet. Sales more than quadrupled from $4 billion to $18 billion. The per caps were equally impressive. By 1997, Americans were drinking 54 gallons of soda a year, on average, and Coke controlled almost half of the soda sales, with a 45 percent share. The rising consumption, which had more than doubled from 1970, also had staggering implications for the nation’s health.
With diet sodas accounting for only 25 percent of the sales, the sugary soda that people drank each year—more than 40 gallons—delivered 60,000 calories and 3,700 teaspoons of sugar, per person.

By 1994, Coke’s marketing efforts became even more intense, driven by competition from new sources: sweetened teas and sports drinks. Even bottled water was making it hard to push the per caps for soda any higher. More and more, Dunn found himself participating in efforts that directed Coke’s marketing muscle toward particularly poor and vulnerable parts of the country where consumption seemed to know no bounds. Places like New Orleans, where people were drinking twice as much Coke as the national average. Or Rome, Georgia, where the per cap hit 1,000—nearly three Cokes a day. Coca-Cola executives never used the word
addiction
to describe this behavior, of course. The food industry prefers not to speak of addiction. Instead, when describing their most valued customers, they chose a term that evokes an image of junkies pursuing their fix.

In the war room atmosphere of Coke’s headquarters in Atlanta, these consumers were not called “loyal customers.” They were called “heavy users,” and their importance to Coca-Cola was rooted in a principle named for an Italian economist, Vilfredo Pareto. He created a mathematical formula to describe the unequal distribution of wealth in his country, having observed that 80 percent of the land in Italy was owned by 20 percent of the people, and like many other things, the consumption of Coke worked
the same way. Eighty percent of the world’s soda was consumed by 20 percent of the people.
“Your heavy-user base is, by definition, very important to the business,” Dunn said.

“The other model we use was called ‘drinks and drinkers.’ How many drinkers do I have, and how many drinks do they drink. If you lost one of those heavy users, if somebody just decided to stop drinking Coke, how many drinkers would you have to get, at low velocity, to make up for that heavy user. The answer is a lot. It’s more efficient to get my existing users to drink more.”

One of Dunn’s lieutenants, Todd Putman, who worked at Coca-Cola from 1997 to 2000,
said he was astonished by the ferociousness with which the company pursued consumers. The goal became much larger than merely beating the rival brands; Coca-Cola strove to outsell every other thing people drank, including milk and water.
“It was a mind-bending paradigm shift for me,” Putman said. “We weren’t trying to get share of market. We weren’t trying to beat Pepsi or Mountain Dew. We were about trying to beat everything.”

And when it came to per caps for Coke, Putman said, the marketing division’s efforts boiled down to one question: “How can we drive more ounces into more bodies more often?”

One aspect of this pursuit involved playing with the price to jack up demand. The country, as Dunn put it, became a “battlefield grid.” On the same Memorial Day weekend, for instance, a liter of Coke might sell for $1.59 in San Francisco but only ninety-nine cents in Los Angeles, based on the company’s reading of consumer demand and habits during that holiday. In pursuing heavy users, however, Coke went beyond mere pricing. It began going after the group of people who had not yet decided if they were Coke or Pepsi lovers. These were the future heavy users, whose habits and brand loyalty were still unformed and pliable, and Coke pursued them like it had pursued nothing before.

“Teenagers became the battleground for early brand adoption,” Dunn said.

T
here was one caveat in Coca-Cola’s pursuit of kids in which Dunn, at first, could find a measure of comfort. The company was an early adopter of self-imposed curbs on its advertising, and it drew a bright line at marketing to kids under twelve. Coke abstained from placing its advertising on any programs—television, radio, mobile phones, or the Internet—where more than half of the viewers were eleven years old or younger. In 2010, they made this policy even stricter by lowering the threshold: Coke will now walk away from programs where only a third of the viewers are under twelve.

The company touts this policy as part of a sweeping agenda in social responsibility that includes everything from the efficient use of energy to preserving water supplies in regions of water scarcity to a program it calls “active healthy living,” which ranges from offering kids low-calorie drinks including bottled water to running an ad campaign called Move to the Beat that promotes dancing as a means of exercise. “There are more than 680 million teens on the planet,” Coca-Cola says on its website. “An investment in their future is one of the most critical investments we can make.”

The advertising policy was a point of pride to Coca-Cola employees, Dunn said, and he credits the company for taking this stance. But the self-imposed restraint on children, he pointed out, had its limits. In reality, it applied only to media advertising, not the invaluable marketing that Robert Woodruff had first identified: kids in their special moments.
“If you think in terms of Coke’s presence in ballparks and every place kids go, there was certainly marketing to kids going on,” Dunn said. Moreover, once those kids turned twelve, even before they could be officially called teenagers, they were lumped with the 680 million teenagers on the planet who were fair game for every last ounce of marketing firepower Coke could muster.