In 1894, free sample coupons were again issued. Over $7,000 in tickets was redeemed that year and the next, amounting to over 140,000 free drinks each year. Promising to bring in new business, a salesman would ask a dispenser for the names and addresses of a hundred regular customers. Then free tickets were mailed, along with a cover letter, timed to reach the potential consumer just as the fountain received its Coca-Cola order and a supply of point-of-purchase advertising. This system was an ingenious, effective way to build new outlets. It made it easy on the fountain owner, who could dispense free drinks and mount attractive posters to brighten his store. In addition, “premiums”—serving urns, scales, cabinets, cases, and clocks—were offered to encourage sales. All prominently displayed the Coca-Cola logo.
CANDLER AND SONS
As Candler started to make money from Coca-Cola, it was not reflected in his largess to his children. Like his father, he did not believe in spoiling his children, repeatedly stressing economy in letters to them at Emory College, then located in Oxford, Georgia. Ever the careful businessman, Candler kept a running account of every cent his son Howard spent. In 1894, apparently in response to his son’s request for money, Candler wrote out a balance sheet showing Howard’s expenses, including ten cents for bananas and twenty-five cents for a toothbrush. Underlining the balance of $15.40 in red, the strict father told his son that he should have that much money left.
At the same time, Candler exerted enormous pressure on his children to excel. “My boy, you cannot know how anxious I am about you,” he wrote to Howard in 1894. “I do so greatly desire your Success. I hope you will fully appreciate . . . my efforts to aid and care for you . . . [so] as to improve your chances. I expect you to be first in your class.” Candler made it clear that he expected Godliness to accompany Success; many of his letters resembled sermons: “Don’t be religious in word only, but in your life. . . . Let your life constantly exhibit Christ. We live for Him.”
Asa Candler was capable, however, of jumping from the most sentimental platitudes to hard-nosed business matters, in the next sentence asking Howard to help with the local Coca-Cola business: “I am sending by Express today . . . some advertising matter for your careful distribution to the fountains in Oxford.” He also asked Howard to look into “empty bottle troubles” and to spy on a druggist he suspected of offering Wine Coca in place of Coca-Cola.
GOING NATIONWIDE
Although not the best child-rearing traits, Candler’s obsessions with detail, frugality, and achievement worked well for Coca-Cola. So did its location in Atlanta, the center of a web of rails carrying the recycled whiskey barrels full of sweet syrup across the country. By the end of 1895, Candler could proudly report to his stockholders that “Coca-Cola is now sold and drunk in every state and territory in the United States.” In the four years since incorporation, the company had achieved nationwide distribution, even though the vast majority of sales were still concentrated in the South. “The great American Eagle—that discriminating bird of freedom—is passionately fond of Coca-Cola,” the Coca-Cola News proclaimed, “because Coca-Cola has become a National drink.”
A close look at 1895 company finances reveals how money was spent and made. Candler paid $44,247 for the ingredients of the 76,244 gallons of syrup he sold—58 cents per gallon, or less than half a cent per drink. At the same time, he spent $17,744 on advertising (23.3 cents per gallon) and $12,054 on “expense, discount & interest.” That last figure included salaries, which were, as Howard Candler later admitted, “moderate and in some instances inadequate.”
If Candler could have effectively retailed his drink directly to consumers, his profits would have been incredible, because his total disbursements came to just under $1 for a gallon of syrup selling for $6.40 (128 drinks at a nickel apiece). Rather than expand his work and sales force, however, he chose to spread the profit among distributors and fountain owners, who would sell for him. In each territory, he sought out jobbers (usually candy or drug wholesalers) with whom he could set up a long-term, trusting relationship. He sold the syrup to them at an average cost of $1.29 per gallon in 1895, leaving himself a profit of thirty cents a gallon and allowing a whopping markup for both jobber and retailers. That smaller profit margin translated into huge influxes of cash as the total gallonage sales rose steadily. By the beginning of 1896, the Company had a surplus cash war chest of almost $50,000.
By the end of that year, the Company needed new quarters, and there was plenty of money to build them. In 1893, to the relief of the pawnshop and saloon, Coca-Cola moved to larger rented space at Ivy and Auburn Avenue, where a 100-gallon copper kettle replaced the old 40-gallon affair, and a 1,500-gallon holding tank was installed. But this space was also soon inadequate. Thus, at the December 9, 1896, annual meeting, $10,000 was allocated to buy a lot and begin construction.
The pulse of Coca-Cola beat faster with every year, as an 1896 jingle asserted: “Stronger! stronger! grow they all, / Who for Coca-Cola call. / Brighter! brighter! thinkers think, / When they Coca-Cola drink.” Although others might grow stronger from the beverage, however, Asa Candler was on the verge of a complete mental and physical collapse. He had overworked himself to the point of exhaustion, and even repeated glasses of Coca-Cola were not having the desired effect. Consequently, the annual report recorded that “the President was requested to take an extended vacation during the year 1897.”
“AS LONG AS SIN ABOUNDS”
Another sign of the company’s coming-of-age that year was the need for lawyers. Candler had complained of “bogus substitutes” in his 1894 annual report. As Coca-Cola’s success grew, so did its hangers-on. As a prelude to a century of court battles, in 1896 “the President was requested to consult an Attorney in reference to the advisability of bringing a suit, or suits, against parties who are selling substitutes for . . . COCA-COLA.” It is, of course, ironic that the makers of Coca-Cola should have been so self-righteous about ersatz colas when their drink was derived from a Vin Mariani clone.
The host of imitators was led by J. C. Mayfield, who had reincorporated the Pemberton Medicine Company as the Wine Coca Company in 1894. After trying Yum Yum and Koke, he now reverted to Pemberton’s well-known Wine Coca, but he modified it to copy Coca-Cola, so that Howard Candler identified it as the “deceitful” product that “cut most seriously into our business.” Through the years, Mayfield would continue to be a thorn in the Company’s side and would later play a crucial role in its history.
Mayfield’s wife, now divorced and remarried, also made a career out of selling Coca-Cola substitutes, calling herself Diva Brown and marketing My-Coca. She too claimed to have Pemberton’s recipe, though her ex-husband disputed it. In fact, he complained that she had tried to steal his formula. Diva Brown was “demented,” according to Mayfield, although she had “rational intervals” during which she was “very grasping,” demanding his copy of the Coca-Cola formula. When he refused, she threatened to kill him, unsuccessfully trying to carry out her threat on several occasions. Demented or not, Diva Brown, “the Original Coca-Cola Woman,” was shrewd and determined, portraying herself on her bottle labels as a pleasant-looking woman with short, dark hair. She sniffed righteously at the numerous frauds on the market: “I have seen dozens of formulas purporting to be mine, which were not even similar.”
Candler had to contend not only with these fake Coca-Cola products, but with the dilution of his own syrup. Because one universal characteristic of the imitation syrups was their lower price, it was tempting for drugstore owners to add the cheaper syrup to the real thing, hoping no one would know the difference. At the turn of the century, Candler commented on diluters and frauds: “We have them all over the country, and will have them, as long as sin abounds—where they adulterate good things.” He must have been pleased when a prominent trade journal editor responded to an 1899 request for the Coca-Cola formula by protesting, “I do not know the formula, or anything near it. It has defied all attempts at imitation. Even if it could be done
you could not get the result.”
THE TRANSITION FROM MEDICINE TO BEVERAGE
In 1895, Frank Robinson told Asa Candler that women and other consumers frequently wrote to object to the medicinal image of Coca-Cola. They didn’t want to feel guilty for taking doses of a medicine when all they wanted was a bracing soft drink. Prompted by these complaints, Robinson made a brilliant tactical move with Coca-Cola advertising. He realized that there was more future in Coca-Cola as refreshment than medicine. After all, everyone got thirsty. As Robinson put it, “We found that we were advertising to the few when we ought to advertise to the masses.” By promoting Coca-Cola as a beverage, they reached thousands rather than “one man in a hundred.”
Consequently, he published more ads that simply said, “Drink Coca-Cola. Delicious and Refreshing.” Instinctively, Robinson understood that the older ads were too long and too negative. With a larger budget, he flooded the market with his succinct message, not only in newspaper ads, but with posters, streetcar signs, calendars, serving trays, thermometers, clocks, pencils, bookmarks for schoolchildren, and glass plates for fountains. By 1898, Robinson was distributing over a million items per year.
Since 1891, the annual Coca-Cola calendar had featured attractive young women. Appealing but suitably modest, the “Coca-Cola girls” would stir male fantasies for years to come. The Company’s Philadelphia lithographer made an annual pilgrimage to Atlanta with posters displaying a new crop of young beauties. With a salacious twinkle in his eyes, Robinson would select a likely candidate, saying, “I think Mr. Asa will like this one.” By the turn of the century, the Company pioneered celebrity endorsements from actress Hilda Clark, a soft-featured blonde singer, and the more imposing opera star Lillian Nordica.
The advent of the Spanish-American War indirectly gave the Company more reason to shy away from medicinal claims. In 1898, Congress passed a special war tax on proprietary medicines, but not on beverages. The commissioner of Internal Revenue ruled that Coca-Cola was a drug, not a drink, and ordered the Company to pay the tax. Furious, Candler sued the government. The case dragged on until 1902, when it was finally decided in Coca-Cola’s favor, but it marked the beginning of Candler’s disaffection with the U.S. government.
The Company did not abandon medicinal claims altogether, however. The 1899 Hilda Clark calendar stressed the “delicious and refreshing” qualities of the drink, but it also maintained that Coca-Cola “relieves mental and physical exhaustion” and “cures headache.” About 10 percent of the ads in 1899 still talked about headache relief and benefits for brain workers, while others emphasized the use of the coca leaf by Andeans and the kola nut by Africans. But an important corner had been turned, and the future of the entire enterprise hung in the balance. If Robinson had not promoted Coca-Cola as a socially acceptable drink imbibed by the best people, it is likely that the patent medicine would not have survived the early part of the twentieth century, which saw a dramatic backlash against such nostrums.
GROWING AND BRANCHING OUT
As a new century loomed, the well-honed young company fizzed with profits and enthusiasm for the future. Despite the pending government suit and the omnipresent imitators, Candler’s annual reports sounded as self-satisfied as the dour little man ever became. “Prosperity has been with the Company during the year just closed,” he wrote in January of 1899. “At this rate of increase,” reported the Coca-Cola News, “how long will it be before enough Coca-Cola will be sold in one year to make a river as large as the Mississippi?”
Candler had opened branch offices and syrup factories in Dallas (1894), Chicago (1895), Los Angeles (1895), Philadelphia (1897), and plans were under way for an office in New York (1899). Whenever possible, Candler sent nephews to assume command of these branches. Dan Candler ruled in Dallas, Sam Candler in Los Angeles, Sam Willard in Philadelphia. Yet another nephew, Sam Dobbs, had worked as a salesman since 1888 and now served as a clerk and bookkeeper in the main office. As his sons reached maturity, Candler sent them to branches as well—Asa Jr. took over in California, and Howard went to New York. At the same time, he was looking beyond U.S. borders. In his 1897 annual report, he noted that the drink was being sold in Canada and Hawaii, with an eye toward Mexico. “We are firmly convinced,” he wrote, “that wherever there are people and soda fountains, Coca-Cola will, by its now universally acknowledged merit, win its way quickly to the front of popularity.”
To encourage his jobbers, Candler had instituted a rebate plan in 1897, so that the more Coca-Cola a dealer sold during the year, the more he would get back as a bonus. Although the list price was $1.50 per gallon, there was a nickel rebate for every hundred gallons sold, up to a maximum of twenty-five cents for two thousand or more gallons. “At the close of his business year,” Candler said, “when actual results are still somewhat in doubt, it greatly enthuses a dealer when we hand him a [rebate] check,” causing him to increase his sales efforts the following year.
COCA-COLA MEN
By 1899, fifteen Coca-Cola drummers rode the country’s rails, pushing the drink as early as February. Most salesmen handled cotton during the winter, because selling soft drinks was still a seasonal occupation. Nonetheless, they thought of themselves as Coca-Cola men, a distinctive breed. Before they were sent out on the road, Asa Candler fully indoctrinated them into the religion of Coca-Cola, often having them work in the manufacturing department briefly and stressing the purity of the ingredients, the sanctity of the secret formula, the extraordinary qualities of the product.
When Asa Candler believed in something, he often reacted with extreme emotion. A fundamentalist Methodist, he would get so worked up at revival meetings that, according to his son, he would become physically ill. “His eyes would shine, his body become tense, and his whole being pulse with . . . exhilaration.” Candler communicated this kind of fervor for his product to his impressionable salesmen.* Howard commented that his father had “an almost mystical faith” in Coca-Cola. A small man, Candler also had a bit of a Napoleon complex. He delighted in wearing his elaborate uniform for the Georgia Horse Guard, and he continually exhorted his children and salesmen to be men. Although Candler was “in no way . . . an imposing person physically,” his son wrote, “his anger and impatience could, on occasions, be monumental.” None of his employees cared to cross him.
There were many temptations for young drummers on the road, spawning the innumerable jokes about traveling salesmen, farmers’ daughters, and the like. Asa Candler was determined that his salesmen would be enthusiastic, morally upright representatives for Coca-Cola, and he kept tabs on them as much as possible. He wrote to reprimand one salesman, for instance, because “you have been on sprees to the detriment of The Coca-Cola Company’s good name.” By 1898, Candler reported with satisfaction that “our salesmen have become known every where in this Union as gentlemen in every respect, and have not only maintained the good name of the Corporation, but have succeeded in making Coca-Cola a familiar and gracious name in all the land.”
Candler convinced Coca-Cola men that “theirs was the greatest product and the greatest company on the face of the earth,” as his son recalled. Because of their deep belief, these proselytes were motivated to overcome every obstacle. Like the early Christians, Candler’s salesmen often faced hostility, rumor, and indifference—and, like those early martyrs, they maintained their faith against all odds.
HOWARD HITS THE ROAD
One of Candler’s drummers in 1899 was his twenty-year-old son Howard, on summer vacation from medical school and armed with a letter of introduction from his Uncle Warren, by then a Methodist bishop and president of Emory University, to the governor of Missouri, the cleric’s close personal friend. Asa wrote frequently to his son on the road; the letters paint a revealing portrait of the business as a new century loomed. Many are concerned with petty details, worrying over “substitutes and frauds,” emphasizing thrift and caution, and advising how to handle local businessmen. The overall impression, however, is that the Coca-
Cola boom nearly overwhelmed a frantic Asa Candler, who struggled to coordinate his increasingly national enterprise.
April 13, 1899: I am just as busy as it is possible for me to be. . . . God bless my “Wandering Boy.”
April 19, 1899: We are very busy here. It takes every moment of our time looking after traveling men. We now have 12 working from this office. Bradley leaves tomorrow. We will go into Ohio & Indiana. . . . I hope you remained in Wichita long enough to do business that ought to be done there and to let us catch up with you.
May 6, 1899: You are making a fine record in business. . . . We are 5000 gallons behind with orders, notwithstanding we are turning out above 3000 gallons [of] goods daily.
May 8, 1899: Demand for goods has been in excess of our ability to supply since about the 20th of April.
May 9, 1899: There is so much territory and so few of you men to work it that it seems imperative that we do a little work in a great many places.
May 12, 1899: Sales averaging 2000 gallons daily of which Atlanta does about 1000.
May 19, 1899: We are now throwing men into various large Western cities where there seems to be fine opportunity for work.
June 13, 1899: Our business this week is simply immense.
June 19, 1899: We have so much territory that must be looked after within the next 60 days that we can’t give to any territory as much time even of one man as that territory seems to deserve. . . . We are inclined to furnish you with all the material, both of Coca-Cola and advertising matter that you need . . . and would prefer that you have a surplus than that you should have none.
For God, Country, and Coca-Cola Page 10