But even Coke’s corporate diplomat found the French situation hard going. The French government, he reported back to Atlanta, has a “personal grudge against us,” and his fears only deepened in late 1949 when the French authorities charged Coca-Cola with breaking the country’s health laws by adding phosphoric acid to the drink. The charge, Makinsky noted, was one that may well be upheld in court.
Europe’s concerns about phosphoric acid as an additive had been needling Coke since the end of the war. The health laws of many European countries appeared to outlaw its use, and Coca-Cola spent much of the postwar years smoothing over the issue in Belgium, Switzerland, and Britain. But the intransigent attitudes encountered by Makinsky in Paris suggested that France would not bend so easily.
In December 1949, as Coca-Cola mulled over how to deal with this latest attack, the Communists and winemakers turned up the heat by introducing two separate bills in the National Assembly that were designed to banish Coca-Cola from France for good. The Communist party’s proposal was the cruder of the two—a simple demand for a ban to protect French businesses. The winemakers’ man in the assembly—Paul Boulet, the mayor of Montpellier—offered a more politically astute proposal that would empower the French health minister to ban soft drinks made from vegetable extracts to protect public health. Boulet’s proposal never mentioned Coke by name, but there was no mistaking the target.
The following February the assembly rejected the Communist proposal but passed Boulet’s alternative. The prospect of a complete ban from France and its territories, which still included Algeria at this time, seemed uncomfortably close to actually happening. With time running out and the French unwilling to listen, Coke called in the big guns from Washington. Makinsky pressed the State Department to act and it sent David Bruce, the US ambassador to France, to meet with French premier Georges Bidault. Bruce warned the French leader that America would respond to unwarranted discrimination against its products. Coca-Cola also alerted the American public to the situation, with James Farley, the former postmaster general turned Coca-Cola Export Corporation chairman, using a press conference to make the matter a question of national pride. “Coca-Cola was not injurious to the health of American soldiers who liberated France from the Nazis so that the Communist deputies could be in session today,” he told the assembled reporters who dutiful recounted the line to their readers the next day. Farley’s dig rallied America to the cause of Coca-Cola and unleashed an anti-French backlash.
Politicians and media commentators called France’s proposed ban an affront to America and talked of banning French perfume in retaliation. Others demanded an end to Marshall Plan aid for France and labeled the French as snobs. Eugene Cox, the Democratic representative for Georgia, announced he would no longer eat French dressing—clearly unaware that no one in France would recognize the American condiment as having anything to do with their cuisine. Soon French wine sales were falling, and the French ambassador was complaining about anti-French attitudes. With a tit-for-tat trade war looming, the fire behind the campaign to rid France of Coca-Cola went out. The French Senate unanimously rejected Boulet’s bill, and when the National Assembly forced it into law regardless, the country’s Ministry of Agriculture refused to use its new powers against the drink. When the phosphoric acid case finally reached the courts in 1953 the judge ruled in Coke’s favor, and the last ember of French political resistance was extinguished.
Not that the French converted to drinking Coca-Cola as enthusiastically as the Japanese. The French still preferred wine, and Coca-Cola also faced an unexpected challenge from an upstart soda called Orangina, which was making rapid inroads with the nation’s youth. Created in 1933, Orangina was the brainchild of Dr. Agustin Trigo Mirallès, a Spanish pharmacist who lived in Valencia and had briefly served as mayor of the coastal city a couple of years earlier. It was an unusual soda, a lightly carbonated combination of orange, grapefruit, lemon, and mandarin flavors that came complete with the pulp from the squeezed oranges used to create it. The soda’s bulging bottle also departed from the norm thanks to its stopper, which was a vial of essential oils that drinkers were supposed to pour into the liquid to complete the taste. Mirallès named his beverage Orangina Soda Naranjina, and in the fall of 1935 he made the fateful decision to attend a trade fair in the French city of Marseille to tout his unusual sparkling drink.
Léon Béton, a French Algerian essential oils merchant from the town of Boufarik, was among those who sampled the Spaniard’s drink at the fair. Béton was so impressed by the drink that two years later he bought the rights to the beverage, by which time the Spanish Civil War had ended Mirallès’s own hopes of building its sales in Spain. Béton shortened the name to Orangina, ditched the vial stopper, and set to work trying to establish it in Algeria, only for his plans to be upended by the outbreak of World War II. Orangina vanished from stores during the war, but Béton’s dreams of soda success endured and in 1947 his son Jean-Claude relaunched the business. After establishing the drink in Algeria, Morocco, and Tunisia, Jean-Claude turned his attentions to taking Orangina out of the French colonies and into France itself.
To stand out in the French market, Jean-Claude created a unique pear-shaped bottle with a pebbly surface designed to mimic the bumps of orange peel. He then began hiring students to conspicuously drink Orangina at the outdoor tables of French cafés so that others would notice the eye-catching bottle and think about trying it themselves. In 1953, two years after its arrival in France, the final piece of Orangina’s marketing jigsaw fell into place when he met Bernard Villemot, a painter who would do for Orangina what Archie Lee had done for Coca-Cola. Villemot created poster artwork that used a stylized swirl of orange peel, the pear-shaped bottle design, and bright summery colors to carve out a distinctive and attention-grabbing image for the soda. The vivid posters, unique bottle, and fake customers turned Orangina into a hit. By 1957 the company was moving fifty million bottles a year and the drink had become the number-two soda brand in France after Coca-Cola. By the mid-1970s Orangina was an international success that was chalking up sales of five hundred million bottles every year, even though it never replicated its European success on the other side of the Atlantic.
But if Orangina and the governments of France and Japan couldn’t stop the global march of Coca-Cola, maybe Pepsi could. Pepsi had entered the postwar years on the back foot; the US military had built Coca-Cola the basis for a global empire, but all Pepsi got from the Pentagon was a lone bottling plant on the remote Pacific island of Guam. If Pepsi hoped to rival Coca-Cola on the world stage, it needed to catch up fast. To make up for lost time, Pepsi began striking deals with large local companies that could launch Pepsi in their home nations with a bang. In Britain it teamed up with Schweppes, agreeing to sell the British company’s quinine water in the United States in exchange for access to its extensive distribution network in the United Kingdom. In France Pepsi found an ally in the bottled water firm Perrier. In the Netherlands Pepsi joined forces with the beer giant Heineken, and in Venezuela it forged a relationship with the powerful D. Cisneros & Cia conglomerate, which had interests in everything from car manufacturing to television stations. Between 1945 and 1950 Pepsi established operations in thirty-seven new countries, and soon the two American cola superpowers were engaged in a sprawling corporate war for market share across the world.
The battle was fierce. In the Philippines, one of the world’s biggest consumers of carbonated drinks, Pepsi and Coke fought a war of attrition across the archipelago’s seven thousand islands. They plastered the country in advertising and jostled for the business of even the smallest stores in the hope of gaining the edge over their rival. Dirty tactics followed too, with both companies hoarding each other’s returnable bottles, filling fields with their enemy’s glassware in the hope of forcing them to invest in new containers rather than more advertising. Coca-Cola even donated $35,000 to a nutrition center founded by Imelda Marcos, the wife of Philippines dictator Ferdinand Marcos, to improve it
s links with the authorities. But the donation was in vain. By the start of the 1980s Coca-Cola was on the retreat in the Philippines. Its local bottler was more interested in the profits he was making from San Miguel beer than in distributing Coca-Cola, and by 1981 Pepsi was outselling Coke two to one.
Coca-Cola responded with a fight led by Neville Isdell, a Northern Irish Coke executive who would go on to become the company’s president. Isdell treated the contest as a war. He christened his sales team the “Tiger Force” after the song “Eye of the Tiger” from the movie Rocky and began holding company sales meetings that involved antics more befitting of banana republic dictators than a soft drink company boss. To fire up his sales force, Isdell would smash Pepsi bottles and dress up as a Filipino general—and on one occasion he arrived at a sales conference on a tank. The theatrics did the trick, instilling the message that this was not just about selling soda but a war against a deadly rival. Within two years Isdell’s Filipino sales army had turned the tables, spreading Coca-Cola signs in every corner of the country and winning the business of thousands of tiny local stores until Coke was selling twice as much as Pepsi. The discovery that Pepsi’s local bottler had been cooking the books to inflate its profits, a scandal that forced the company to write down millions, helped too.
The Philippines was no isolated case. Across the world Coca-Cola and Pepsi piled into countries to slug it out for fizzy drink dominance. No market seemed too small or too poor. From Tristan da Cunha, the most remote inhabited archipelago in the world, to poverty-stricken Cambodia, the cola giants raced to claim cola-free nations as part of their global empire. But while the Communists of France saw such expansion as a program of Coca-colonization that would turn the world American, for many poor, small, or unstable countries the arrival of Coke or Pepsi marked the first time a major foreign consumer company had bothered to invest in them. And when the cola superpowers arrived in these virgin territories they not only changed national drinking habits but altered the economic reality for millions.
In Morocco one study estimated that in 1999 Coca-Cola’s activities were directly and indirectly responsible for generating more than 65,000 jobs and 0.7 percent of the country’s gross domestic product. In China an estimated 414,000 people had work due to Coca-Cola and the businesses that were part of its networks. But the cola giants didn’t just bring jobs and tax revenues; they also introduced new business practices that accelerated the development of domestic businesses.
In post-Soviet Russia, Coke’s legal team helped the authorities write the laws recognizing private ownership of land, paving the way not only for the Moscow bottling plant the beverage company wanted to open but also for the operations of countless other Russian businesses. When Coca-Cola entered Romania shortly after the Communist dictator Nicolae Ceauşescu was overthrown, Romanian companies quickly grasped how to become more successful by learning from Coke’s advertising and quality control practices. The company’s free and regular deliveries to retailers—a practice unheard-of in Communist times—also helped countless small stores to grow. “In Romania they set the standard,” says Douglas Woodward, an economics professor at the University of South Carolina, who studied the impact of Coca-Cola’s investment in several countries around the world. “Coca-Cola is impatient. They didn’t want to wait for these companies to learn about on-time deliveries and quality control, so they set out to make these companies more competitive and help them grow. Early on, they help these economies get on their feet and really have a strong demonstrative effect for how capitalism works and how it’s done. You can’t quantify that, but it’s certainly part of their impact.”
A similar effect can be seen in Africa too, he adds: “In South Africa there are millions of little businesses and no one is more in touch with them than Coca-Cola. They are in contact with these small-scale shops every day. The company has a huge influence in terms of making these businesses more competitive. When you work with Coca-Cola if you’re an African business you tend to do better.”
This was no philanthropic mission, of course. Pepsi and Coke were locked in a global war for profit where the prize was billions of dollars of revenue, but their intense rivalry meant they were often the first consumer products to enter developing countries. So intense was this desire to get nations drinking their cola rather than their rival’s that Pepsi and Coca-Cola even smashed through the trade firewalls of the Communist world.
In 1959 the Cold War looked dangerously close to turning hot. Fidel Castro’s revolution in Cuba had installed a Communist regime on the doorstep of the United States. The USSR had the upper hand in the space race thanks to the 1957 launch of the Sputnik 1 satellite, and in Berlin tensions between east and west were rising over the number of East Germans fleeing to West Berlin. The idea that the Soviets, rather than the Americans, would emerge victorious from the Cold War seemed a distinct possibility. Keen to ease the tension and reach out to the Soviet people, the US government organized an exhibition in Moscow to showcase life in America. The exhibition’s organizers felt Coca-Cola should be there, but when they asked the Atlanta company to get involved it refused, possibly wary of the reception it might face in Moscow given how the Kremlin had sought to demonize its product around the world.
So the organizers invited Pepsi instead. Donald Kendall, the head of Pepsi’s international operations, leapt at the chance, but his cost-conscious bosses were less than keen. Handing out free Pepsi to hundreds of thousands of Muscovites would cost a fortune, and since the USSR wouldn’t let Pepsi enter the country, what was the point? When the former US Navy airman insisted on going ahead, his superiors said fine, just don’t expect to have a job if you come back with nothing to show for this massive waste of time and money. By the time Kendall got to Moscow, he knew he needed to pull a rabbit out of the hat if he was going to save his neck, so when he was introduced to Vice President Richard Nixon at a US embassy reception ahead of the exhibition’s July 24 opening day, he asked Nixon if he would do him a favor.
Kendall explained that he had risked his job to bring Pepsi to Moscow, and asked Nixon whether he could get Soviet leader Nikita Khrushchev to visit the Pepsi kiosk. Nixon agreed to help. The next day, as the vice president wandered the exhibition hall with Khrushchev, he steered the Soviet premier to the Pepsi-Cola stand. Kendall handed the Soviet leader two Pepsis. The first was a Pepsi made in the United States, he told the Communist leader; the second was one made in the USSR for this exhibition. Khrushchev tried both and inevitably declared the Soviet-made Pepsi to be superior before ordering a second Communist cola as they were bathed in camera flashes. Nixon and Khrushchev went on to have their famous Kitchen Debate, where they argued over the merits of the American and Soviet economic systems, but Kendall had his career-rescuing big win. The next day newspapers across the world carried photos of the Communist leader sipping Pepsi. It was the start of an alliance between Nixon and Pepsi that would take the vice president into the Oval Office and Pepsi into the USSR.
Toward the end of 1959, Coca-Cola boss Robert Woodruff invited Nixon to stay with him at his twenty-eight-thousand-acre Ichauway Plantation in Baker County, Georgia. Nixon already looked like a shoo-in for the Republican presidential nomination for the 1960 election, and the visit was the chance for the wealthy corporate leader and the potential president to forge a closer relationship. The meeting went badly. Woodruff loved hunting and was unimpressed by Nixon’s lack of shooting prowess. He later confided in colleagues that he didn’t like Nixon because he lacked a sense of humor. And when the vice president wrote to thank the Coke boss for his hospitality and “the generous supply of home-grown sorghum,” he received a grumpy rebuke from the cola king: “That is home-grown Georgia cane syrup, not sorghum. There is a very great difference between our syrup and sorghum, which is generally a heavy bitter-sweet substance.” Nixon went on to lose his bid for the Oval Office, and in 1962 he also lost his campaign to become governor of California. With his political career seemingly over, he returned to practici
ng law, and he asked Coca-Cola for a job in their legal department. Given his unsuccessful December 1959 stay with Woodruff, he shouldn’t have been too surprised when the answer was a firm no.
But while the political world and Coca-Cola had written Nixon off, Kendall hadn’t. After becoming the chief executive of Pepsi in 1963, Kendall arranged for Nixon to join the law firm Mudge, Stern, Baldwin & Todd to oversee Pepsi’s legal affairs around the world. The $250,000-a-year job came with few strings attached. Nixon could decide his own schedule within reason and his role as a legal ambassador for Pepsi offered plenty of scope for touring the world, meeting foreign leaders, and looking presidential. Nixon used the freedom and international globetrotting his Pepsi job gave him to rebuild his political career, and in 1968 he staged the most remarkable comeback in American political history by becoming the thirty-seventh president of the United States. Soon after Nixon entered the Oval Office, the Coca-Cola vending machines in the White House were removed and replaced with Pepsi machines. The White House pass that President Lyndon Johnson had given Woodruff was also revoked. After years of Coca-Cola-drinking presidents, Pepsi finally had its own man in office.
Fizz Page 17