Don Keough and Carl Ware, an impressive black Coke executive who had once headed the Atlanta City Council, were negotiating with Jackson when he abruptly escalated publicity. Declaring an impasse, he called for a boycott and told the press that Atlanta’s black ministers would denounce Coca-Cola from the pulpit that Sunday. Though nothing of the sort occurred, Keough and Ware didn’t want to tangle with PUSH, and on August 11, with a triumphant Jesse Jackson standing at his side, Keough held a press conference heralding Coca-Cola’s new “moral covenant,” promising African Americans a package worth $34 million. In the audience were Atlanta mayor Maynard Jackson, Coretta Scott King, Andrew Young, and other prominent black leaders. Coca-Cola gave Jackson everything he had asked for, promising to spend more on minority advertising, increase the number of black managers, and find suitable ethnic owners for a bottling franchise. Fooling no one, Keough insisted that the new program had nothing to do with the PUSH boycott, but rather represented Coca-Cola’s sincere effort to obey President Ronald Reagan’s recent summons for private industry to intervene as government affirmative-action programs were trimmed.
Neither Keough nor Goizueta anticipated the reaction to their well-intended plans, though the election of the archconservative Reagan should have given them a hint. Many white Americans were sick of civil rights agitation. Even the name of Jackson’s organization was offensive—they were tired of being pushed around by loud-mouthed blacks. A severe white backlash whipped the soft drink firm. Lewis Grizzard, the Atlanta Constitution’s syndicated professional redneck, complained of Coca-Cola’s “show of spinelessness,” comparing PUSH activists to Chicago mobsters and suggesting that Jesse Jackson be granted the bottling franchise on the moon. Even Barron’s, the well-respected financial weekly, chided Coca-Cola for agreeing to find black entrepreneurs to bottle or wholesale the drink, since it would “injure meritorious whites.” Similar letters of protest deluged the Company, such as one Tennessee businessman who wrote to protest “blackmail pressures of one minority organization.” Keough painstakingly responded to these concerned white Southerners, tactfully refuting the presumed “cave-in.” Finally, the Coca-Cola president was forced to admit publicly that he had made a mistake—he should never have called a press conference with Jackson at his side.
COKE IS IT
Soon, however, Goizueta and Keough forgot all about the uproar over Jackson, when a new advertising campaign, “Coke Is It,” was unveiled in February of 1982, after over a year of unprecedented research and consumer testing. The man behind the commercials was John Bergin, who had created the Pepsi Generation and “You’ve Got a Lot to Live, and Pepsi’s Got a Lot to Give” at BBDO. Now at McCann-Erickson, the advertiser inherited “Have a Coke and a Smile,” with its pretty tune and feel-good approach, which he considered “limp-wristed,” without real punch. Bergin yearned for a feistier battle cry to reassert the leading cola’s confidence. He discovered it in a Canadian campaign that Ken Schulman, another McCann man, had cobbled together with New York songwriter Ginny Redington. Bergin was immediately taken by the compelling music: after a gradual buildup, it punched a brassy climax with three quick blasts in succession: “Coke is it!”
Bergin modified the lyrics to eliminate references to Canada, and Goizueta and Keough loved it. Just before the launch, however, Ginny Redington made a startling admission. She had originally written the music for a network news show promotion. The three beats were initially intended for “N-B-C!” The studio heads had rejected the music, however, judging that it was too flashy for a simple station identification theme. Bergin, aware of the touchy Coca-Cola pride, was outraged. “We had egg all over us, not just our faces,” he recalled. Fortunately, Coke executives were understanding, since they sensed a winner.
On February 4, Coca-Cola unveiled the commercials on all three TV networks at 9:15 p.m. in a “roadblock.” Simultaneously, two thousand bottlers gathered at the Atlanta Civic Center to watch the ads. By midnight, more than 150 million Americans had heard “Coke Is It,” which Don Keough dubbed the Company’s new marching song. On-screen, as the song’s momentum developed, students, parents, and toddlers threw crates and scrap wood onto a large pile. “The most refreshing way / To make the most of every day,” sang eager voices. “And wherever you go and whatever you do, / There’s something big waiting for me and you.” Then, just as the pile was torched into a huge bonfire, the message slammed through: “Coke is it! / The biggest taste you’ve ever found. / Coke is it! / The one that never lets you down.” The fire turned out to be the centerpiece for an all-American pep rally before a football game. Of course, it wasn’t altogether clear whether the cheerleaders, appropriately garbed in Coca-Cola red, were leading the crowd in joyous celebration of the home team or Coca-Cola, which was displayed in fifteen separate scenes of the sixty-second commercial. In all the “Coke Is It!” spots—whether a farmer’s surprise birthday party or a break for energetic young dancers—consumers pulled glistening Coke bottles from ice chests. After gulping, they conveyed their overwhelming joy, holding the bottle up to admire and sighing with relief.
Roberto Goizueta hailed the new campaign as a fitting introduction to his reign. “This strong, assertive message,” he told his bottlers, “mirrors the nature of Americans today. We say what we mean and we tell it like it is.” Actually, the lyrics intentionally didn’t say exactly what “it” was. As Brian Dyson admonished, “We should not be too precise, too descriptive or too literal.” That way, each consumer could fantasize appropriately. “Whatever the feeling, whatever the need,” Dyson concluded, “Coke is it. Period.”
At the same time, Coke unveiled its secret weapon against the Pepsi Challenge: Bill Cosby. The black comic’s love affair with Coke dated to his childhood, when he sometimes drank fifteen Cokes by 2 p.m. during his “periods of addiction,” as he put it. “It helped me to burp very good and clear the area.” In the late sixties, the Company had sponsored Cosby’s radio show. More recently, he had made commercials for the “Coke and a Smile” campaign, appearing in person at the Great Get-Together in 1979. John Bergin now directed Cosby in “Coke Is It” commercials that mocked the Pepsi Challenge. Directly addressing the audience, mugging with his well-rehearsed charm, Cosby simply drank a Coke and talked. “This is real refreshment, real big taste,” he said. “Now see, if you were another cola, number 2 or number 29, you’d do taste tests and challenges and stuff and try to compare yourself to this, wouldn’t you? Sure, don’t shake your head, you would too, you sneaky devil.” Other Cosby commercials did the previously unthinkable, showing a Pepsi vending machine, but only in order to knock it. “If you’re number two,” he said, “you know what you want to be when you grow up. Yes, Coke is it. You’re nodding, yes?” In one ad, Cosby spied on a Pepsi taste test with binoculars, pointing out that the Challenge commercials never depicted anyone choosing Coke, which was misleading.
Bergin credited Cosby with killing the Challenge, which was halted in 1983. “He was brilliantly entertaining in his ridicule.” As the comedian immodestly informed bottlers at the Great Get-Together, “I don’t think there is anyone who, when they believe in the product, can sell it as well as I, as a projectionist.” Bergin found Cosby “inconceivably arrogant,” but he had to admit that “magic happens when the camera starts. That man is the greatest thing I’ve seen in terms of making his face work.” Despite blow-ups on the set, the ad man acknowledged that “our greatest weapon has been Bill Cosby when we have used him.” In 1983, Cosby invested more personally in Coke’s future when he bought part ownership of the Philadelphia bottling plant along with black entrepreneur James Bruce Llewellyn. The sale fulfilled Coke’s promise to PUSH to give African Americans management of a bottling plant, though Cosby was hardly an underprivileged minority member.
THE IMAGE MASTERS DIVERSIFY
Although pleased with the universal acclaim given “Coke Is It,” Goizueta was smarting from the adverse reaction to his acquisition of Columbia Pictures only two weeks earlier. The field o
f entertainment was alluring, particularly to Goizueta, who had been seduced by Hollywood in his schoolboy days. Coca-Cola commercials were, after all, mini-movies. Furthermore, the eighties were transforming into a decade of glitz, image, and instant replay. The “Gimme Generation,” as some journalists dubbed eighties consumers, was obsessed with video, so Columbia’s library of 1,800 classic films promised to be a gold mine. Consequently, Coca-Cola surprised even Columbia’s management team of Herb Allen and Fay Vincent by paying $750 million for the studio, the equivalent of nearly twice its stock market value at the time.
Financial analysts dumped on the deal. Coke had paid too much, they said, and besides, what did a soft drink company know about making movies? Coca-Cola stock lost 10 percent of its value within a few days. Goizueta was angry and puzzled, since he had served notice that he wanted to diversify and to increase the Company’s U.S. profits until they contributed half of the revenue, and, with domestic soft drink growth slowing, Columbia offered a solution. “We’re doing absolutely the only thing we could have done to maintain our growth into the future,” Goizueta told reporters.
During the rest of the year, the critics had to admit that Coke hadn’t been so stupid after all. Columbia churned out three smash hits in a row with Tootsie, Gandhi, and The Toy. More important, the Company signed a sweet deal with Home Box Office, Time Inc.’s pay-cable movie channel. HBO agreed to pay for a quarter of the production cost for all Columbia movies, as well as forking over whopping rental fees. At the same time, Columbia, HBO, and CBS formed a new studio called Tri-Star. Goizueta and Keough had no direct hand in the deals, but they soon befriended Allen and Vincent, who had pulled off a real coup. Soon thereafter, Allen joined the Coca-Cola board.
Although Goizueta and Keough repeatedly denied meddling with Columbia’s creative output, they did install Peter Sealey, one of Coke’s top marketers, as the studio’s new researcher. Sealey started asking questions never before addressed, using the jargon of the soft drink industry. Who were the movies’ “heavy users,” and what did they really want? How effective was Columbia’s advertising campaign? How badly did home video “cannibalize” movie attendance? Sealey even discussed “pretesting” script concepts. By combining ad budgets with its new owner, Columbia immediately benefited from the Coke tie-in, getting discounts on bulk advertising.
While Goizueta and Keough did not overtly fiddle with the creative content at Columbia, they made sure that certain products never appeared in their films, sending a memo to studio executives forbidding the use of any PepsiCo or Philip Morris (owner of 7-Up) items. As expected, under its new ownership Columbia’s celluloid featured a goodly amount of Coca-Cola, particularly in feel-good, happy-ending efforts such as Murphy’s Romance, a James Garner/Sally Field film that premiered three years later. Pepsi appeared, too, but only in a negative context, as Field’s son was denied a job in an inhuman supermarket where, as film critic Mark Crispin Miller wrote, “two blue Pepsi signs loom[ed] coldly on the wall like a couple of swastikas.”
Of course, it wasn’t necessary for Coke to buy a studio to ensure product placement. In 1982 the movie E.T. galvanized marketers’ attention when Reese’s Pieces experienced a 70 percent sales jump the month after the cute alien munched them on-screen. The message was not lost on Coke, also plugged in E.T. Soon, all manner of consumer goods prominently paraded on movie screens. Ken Manson, Coke’s full-time film agent, suddenly found his job more difficult and competitive. While other firms paid thousands of dollars for product placement, Manson offered vintage Coca-Cola soda fountains or trucks as “authentic” period props. Almost unbelievably, he continued to place Coke in films without paying for the privilege.
DIET COKE ROCKETTES AWAY
In July of 1982, when Brian Dyson held a press conference to trumpet the pending debut of Diet Coke, Goizueta discovered that the Columbia deal wasn’t the only thing he could do to boost domestic growth. News of the project hadn’t leaked, despite a widening circle of people aware of it. The can alone had gone through 150 possible designs. Over ten thousand consumers had participated in extended home-use and purchase-simulation tests. It was, in Dyson’s words, “the most carefully developed and researched product in the history of The Coca-Cola Company.” As a show of the Company’s confidence, Diet Coke would roll out in the tough New York territory, which accounted for 10 percent of the country’s volume. In August, Charles Millard of the New York Coca-Cola Bottling Company, with support from Big Coke, rented Radio City Music Hall, complete with the dancing Rockettes, to launch the drink. Then SSC&B/Lintas (hereafter called Lintas), McCann’s sister organization responsible for the Diet Coke account, rented an auditorium in Los Angeles for a day, filled the theater with extras, and hired scores of stars to appear as if they had been at the New York premiere. Altogether, the resulting sixty-second commercial cost some $2.5 million, making it the most expensive spot ever.
The gamble was worth it, though. An instant phenomenon, Diet Coke surpassed all Company expectations. Much of the drink’s impact undoubtedly stemmed from its clever positioning as the drink for the eighties’ lifestyle. In contrast to TaB, using “perfumy and lacy imagery” to appeal exclusively to women, Diet Coke’s theme song proclaimed that “you’re gonna drink it just for the taste of it.” Men, increasingly worried about their weight, health, and appearance, already bought 30 percent of diet beverages. Coca-Cola research indicated that Diet Coke could grab the majority of the newly named Yuppies—those young urban professionals who did aerobics and worked out on their Nautilus machines. As Roy Stout’s research had shown, however, many of the new consumers were attracted simply because of the magical brand name—Coke. In labeled taste tests, consumers preferred TaB to Pepsi by a slim margin, but when Stout dispensed TaB from a can marked “Diet Coke,” the name alone swung the results twelve more points in Coca-Cola’s favor. In essence, the consumers were tasting the world’s best-known trademark, with goodwill built over a ninety-six-year history. Whatever the reason, Diet Coke took off. By the end of 1983, it had captured 17 percent of the diet soda market, making it the fourth-best-selling American soft drink, and it was already available in twenty-eight overseas markets.
Not all Coke men delighted in Diet Coke’s unprecedented surge, however, since the Company charged more for the new syrup than it did for Coca-Cola, even though the saccharin-sweetened drink cost considerably less to produce. Big Coke’s proposed bottling contract for Diet Coke awarded the parent company total control of pricing, in addition to numerous other restrictions. When many bottlers balked, the Company dragged out negotiations while the rollout and national advertising sparked an intense public clamor for Diet Coke, forcing reluctant franchisees to sign a temporary contract. At that point, renegade bottler Bill Schmidt and thirty cohorts, already suing the Company over the HFCS issue, instructed lawyer Emmet Bondurant to file suit over Diet Coke for the non-amended bottlers. A few weeks later, Bondurant also filed a separate case for selected amended bottlers.
Though legally complex, the basic Diet Coke Case issues boiled down to an existential question: What was Coca-Cola? Bondurant and the disaffected bottlers argued that Diet Coke constituted an alternatively sweetened form of the old soft drink. After all, the Company called it Coke, and the advertising claimed similarity to the “real thing.” If so, the Company had to abide by its original contract with the non-amended bottlers, rendering Diet Coke technically illegal, because it didn’t contain 5.32 pounds of sugar. For amended bottlers, the case seemed clear cut, since their 1978 contract called for the Company to pass through any savings on alternative sweeteners.
All of the cases—E-Town, the nickname for the argument over corn syrup, and the Diet Coke suits—would be decided by Murray Schwartz, a district court judge in Wilmington, Delaware. Over the course of the decade, Schwartz, an unusually meticulous and attentive jurist, would develop an unwanted expertise in the history and nuances of the soft drink industry. Publicly, Big Coke pooh-poohed the lawsuits, dismissing the ang
ry bottlers as a disgruntled minority with little effect on the Company’s bottom line. Coke’s lawyers regarded the cases as simple contract disputes over incremental profits. Nonetheless, the outcomes remained crucial, since they tested the Company’s right to bend bottlers to its will. For Schmidt and Bondurant, the battle assumed the dimensions of a moral crusade. With neither side interested in an out-of-court settlement, a bitter legal war commenced.
GLORY DAYS
By the end of 1983, Goizueta felt vindicated in the eyes of the world. Columbia, a money machine, earned $91 million in its first full year as a Coca-Cola subsidiary. In 1983, following hard on the heels of Diet Coke’s unparalleled achievement, the company introduced caffeine-free versions of Coca-Cola, Diet Coke, and TaB. As usual, Big Coke lagged behind the rest of the market in terms of innovation. Philip Morris was already trumpeting that 7-Up “never had it, never will,” while Royal Crown had pioneered the previous year with the first cola to lack a stimulant. The day before the Diet Coke announcement, Pepsi unveiled Pepsi Free. At first, Coca-Cola resisted any movement that implied that caffeine constituted a health hazard, since the ingredient provided the drink’s famous “lift.” Goizueta proved that Coke could adapt, however, and once the giant finally stirred, it usually dominated a market segment.*
Later in the year, Brian Dyson revealed that Diet Coke’s taste would be improved with NutraSweet, the brand name for aspartame, a revolutionary new alternative sweetener just approved by the FDA. The only drawback to aspartame—aside from serious unanswered questions about its effects on the human body—was its instability, which would limit shelf life. Consequently, Diet Coke initially derived its sweetness from a half-and-half blend of saccharin and NutraSweet. Soon afterward, the Company opted for 100 percent of the better-tasting sweetener, despite its limits and exorbitant expense. The diet drink market share, 24 percent and still climbing, convinced Coke to guarantee that its new drink measured up to the boasts about taste.
For God, Country, and Coca-Cola Page 53