Coca-Cola: The surreal thing is actually its brand appeal
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The Coca-Cola Company, based in the US, saw its stock shrug off the cost impact of a revised sweetener plan revealed this week. Earlier too, its share price had been flat after President Donald Trump posted that he'd been 'speaking to Coca-Cola about using REAL cane sugar in Coke" in America; it had agreed, he said, and was thankful. As the company told investors a few days later, it plans to launch a cane variant of its fizzy drink this autumn as an extra choice.
The Coca-Cola Company, based in the US, saw its stock shrug off the cost impact of a revised sweetener plan revealed this week. Earlier too, its share price had been flat after President Donald Trump posted that he'd been 'speaking to Coca-Cola about using REAL cane sugar in Coke" in America; it had agreed, he said, and was thankful. As the company told investors a few days later, it plans to launch a cane variant of its fizzy drink this autumn as an extra choice.
This leaves space for business as usual; specifically, for cheaper corn syrup to remain its US bulge-bracket sweetener. It also tips this legendary brand into a swirl of political intrigue. Just recently, Trump's health secretary talked about the risks of corn syrup, all but calling it toxic.
Also Read: Bring back The Zing Thing, Coca-Cola
In the land famed for its free market, we thus have the spectacle of a nudge that has stunned corn farmers, left folks puzzled over how cane sugar is any better, and prompted critics of the White House to link it with the alleged sway held by a rich sugarcane lobby, one that's happy with sugar prices kept high by an import-tariff shield, but may have spied a sweeter pile of profit in a public sales prod.
America is no stranger to dirigiste detours, especially in its farm sector. This intervention, however, is directed at America Inc. Stakeholders include Warren Buffett and perhaps also his fan base of value investors. In symbolic terms, cola market distortion is a blow to the myth of US capitalism being too deeply dug in to display Soviet characteristics. Admittedly, it's not command-and-control.
To Coca-Cola's credit, its words betray no hint of giving up its focus on sugar reduction across its beverage portfolio, as shelf offtake dictates and healthy intake demands. So its steady stock can be explained by an impact that's expected to be too soft to disturb a business boasting of a 3% dividend yield.
Arguably, though, what keeps Coca-Cola cool under pressure is also the real secret of its success: brand power. That this cola's effect on taste buds was only a minor factor hit home in 1985, thanks to its New Coke fiasco. This was a sweeter version formulated to take on its zesty rival Pepsi, a move it had to reverse in response to a rebellion among Coke loyalists, as Mark Pendergrast tells the tale in For God, Country and Coca-Cola (1993).
The company's taste research with blindfold tests was promptly binned for a return to its classic formula—marketed as 'The Real Thing."
Also Read: Mint Explainer: Campa Cola and the power of nostalgia
Many suspect Coca-Cola's flip-flop was a marketing stunt, which the business denies. If it was a lesson, it's a valuable one. Think of dreams. Even if they engage all five of our senses, we usually recall them as audio-visual. All dream-sellers know this, but Coca-Cola has a special edge in its mass outreach.
As a brand, the aural and cursive appeal of its label has no parallel. It rolls easily off the tongue, thanks to four easy syllables—with the curvy letters of each appearing to blend into a flowing sea of red. So familiar is it, that it breezily passes the mirror test: One can 'read' its lateral inversion in a flash. Such brand appeal is an enviable asset, for it frees the cola formula for strategic tweaks in the larger quest to serve an evolving market. Sugar is all but irrelevant.
So long as the brand's marketers can creatively keep its target audience engaged by putting a dream—rather than just a soda can—within an 'arm's reach of desire,' to echo an internal slogan, The Coca-Cola Company could surf the frothy waves of a sugar shake-up. It's a real asset. Topics You May Be Interested In
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