The Real Thing

Title: The Real Thing – Truth and Power at the Coca-Cola Company

Author: Constance L Hays

Publisher: Random House, 2005 (First)

ISBN: 978-0-8129-7364-8

Pages: 358

Nothing is more familiar to the world’s younger generation than the fizzy, brown liquid touted as the ubiquitous symbol of energy and vitality – Coca-Cola. Founded in 1886, the company has served many generations of people and has become a legend in business administration. Constance L Hays describes the growth of the company over the years, with special reference to the period after 1980 when changes of a heretofore unseen nature happened and it witnessed its biggest growth dynamics. The book narrates in detail how Roberto Goizueta transformed the company when its sales had plateaued, how Donald Keough and Douglas Ivester steered it through uncharted waters and provided astronomical value for the shareholders. The work ends on a sober note after the grave setbacks faced by the company after 1999 and the silverlining has still not appeared when the book closes at the end of 2004.

Asa Candler purchased the secret formula of Coke from its inventor John Pemberton in 1888. At first, the syrup was mixed with soda water at the point of sale and drank by customers on the spot. Benjamin Franklin Thomas and Joseph Brown Whitehead hit upon the idea of bottling the carbonated syrup so that the product could reach the doorsteps of a larger clientele. At first the company was restricted in its operation to the sale of concentrate to independent bottlers who had the sole responsibility to package and market it. Subcontracting to numerous associates, the bottling industry’s growth was exponential. In 1919, the bottle’s dimensions and look were standardized. The clout of the bottlers was felt too heavy by Coke management soon after. Stuck with a system in which the parent company couldn’t rise the price of syrup, confrontations and legal battles were imperative. However, by the 1980s, more and more bottlers wound up their facilities which were bought or taken over by Coke and its associate, the Coca-Cola Enterprises which was formed to handle bottling business. Though it was technically another company, entrusted with bottling and sales, Coke exerted critical influence in its day-to-day operations as the major stake holder.

The recipe of Coca-Cola is a jealously guarded secret even now. Only a few people even inside the company know the ingredients, a list of which is kept in a bank locker. Analysts have however identified the components from its chemical signatures. When it began in 1886, Pemberton used trace amounts of Coca leaves (from which cocaine is extracted), the flavour of cola nut from Africa, lime juice, vanilla and several other substances in the make up. Cocaine was not regarded as a harmful narcotic at that time, with physicians freely prescribing it for aches and relief. Coke was quick to withdraw the coca content when it was legally untenable to go along with the existing practice. The formula was again changed drastically in 1985 to address the rising market share of Pepsi, Coke’s biggest rival. The initiative was a very bold one to face Pepsi’s challenge which offered a better taste. However, the move backfired when it was rejected outright by the customers. New Coke, as it was known as a replacement of the old one flopped in the market and the company was forced to bring back the old recipe after just 78 days.

Coke always strived to be one step ahead of its rivals, often resorting to dubious marketing strategies. It sought to obtain monopoly rights to get its products displayed in supermarkets and convenience stores. Coke’s tactics of strangling the competitors often went afoul of anti-trust legislations and judgments were issued against the company. In 1996, in a major coup, it stole Pepsi’s bottler in Venezuela to solely do the bottling for them. The latter half of 1990s was however destined to witness the sagging growth of Coke. First the company was sued against by some of its own black employees alleging racial discrimination. It became apparent that the number of blacks in senior management positions was abysmally low when they constituted 15% of the overall workforce. Compounded with it was the recall of product from Belgium, France and some other European countries when it was detected that the carbon dioxide gas used in the bottles was contaminated. It eroded a huge chunk of credibility from the company. In 2000, Coke was forced to fire about 20% of the labour in a vain attempt to cut costs. When the narrative ends in 2004, we get the impression that not all is well at Coke.

The book is a disappointing one. It recounts the history of Coca-Cola mainly from 1980 onwards. Lacking an effective organising structure, the narrative which lacks any interesting feature shuttles back and forth between decades and centuries landing the readers in sheer confusion. Except for occasional flashes of witty comments, the description is drab. The layout is very bad, printed in very small letters and an unappealing font. Altogether, the book is a very unremarkable one.

The book is not recommended for the general reader.

Rating: 2 Star