Coca-Cola

• The central Coca Cola factory produces concentrate. This is a thick syrup which is diluted a zillion times to produce the drink.
• The syrup is shipped all over the world in barrels.
• Coca Cola plants add the syrup to water (cheap), add carbonation (just CO2), and bottle or can the stuff.
• The finished product can be stored for years, and it is stable (because after all it is sterile water with sugar and gas).
• It can be sold at a profit at nearly any price.

In 1993, Mark Pendergrast published what he believed to be Coke's original formula in For God, Country and Coca-Cola. He'd come across the following among John Pemberton's papers:

• Citrate Caffein, 1 oz.
• Ext. Vanilla, 1 oz.
• Flavoring, 2.5 oz.
• F.E. Coco, 4 oz.
• Citric Acid, 3 oz.
• Lime Juice, 1 Qt.
• Sugar, 30 lbs.
• Water, 2.5 Gal.
• Caramel sufficient

Mix Caffeine Acid and Lime Juice in 1 Qt Boiling water add vanilla and flavoring when cool.

Flavoring
• Oil Orange, 80
• Oil Lemon, 120
• Oil Nutmeg, 40
• Oil Cinnamon, 40
• Oil Coriander, 40
• Oil Neroli, 40
• Alcohol, 1 Qt.

let stand 24 hours.

Although it's obviously quite easy to "explain" Coke's success in hindsight, this lecture shows the power of brand names and a strategy that attempts to maximise all possible factors in selling a product. (In reality, Coke did not always adhere to the following guidelines, and routinely suffered as a result.)

You will never get very big selling a generic beverage. Therefore Coke must be a strong and legally protected brand: in effect, generating a conditioned reflex in consumers. (Even the "Cola" part of the name should have been vigourously defended.)

You need to go for the biggest market: therefore have universal, global, appeal.

Your product must maximise reward: food value (water and energy); flavour (hard to copy, no aftertaste), texture (carbonated, like champagne) and aroma; stimulus (sugar and caffeine); cooling.

Advertise the product as being luxurious.

The profit per serving can be small: over time, consumer spending and quality of life will, overall, increase, and production costs will fall.

Ensure high product quality and reasonable price, limiting possibility of competitors benefitting by finding fault.

Never change the flavour!

Note that Bill Gates is a personal friend of Charlie Munger. It's a shame (for the consumer) that he doesn't appear to listen to a word he says, apart from investing advice.

My opinion only, YMMV.

• 1901 - Coca-Cola's advertising budget is $100,000.
• 1905 - Coca-Cola has already produced calendars, stationary, booklets, logo decorated ceramic syrup urns, post cards, coupons, bookmarks, trays, a plethora of signs, advertising clocks, fans, napkins, banners, posters, novelties, and the once familiar Coca-Cola flare glass. They were the first company to spread out their marketing strategy to include common household items that sported the brand proudly.
• 1928 - Amsterdam The Coca-Cola Company's support for the Olympics begins when a freighter carrying the U.S. Team also delivers 1,000 cases of Coca-Cola.
• 1929 - Coca-Cola produces the bell shaped fountain glass is introduced and quickly becomes the standard for fountain drinks.
• 27 Dec 1930 - Santa Claus made an appearance in Coca-Cola's advertising. Artist Fred Mizen painted a department store Santa in a crowd drinking a bottle of Coke®. The ad featured the world's largest soda fountain, which was located in the department store of Famous Barr Co. in St. Louis, Missouri. Mizen's painting was used in print ads that Christmas season, appearing in The Saturday Evening Post. This is the very first image that resembles the modern day idea of American Santa Claus.
• 1931 - The Coca-Cola Company commissioned Michigan-born illustrator Haddon Sundblom to develop advertising images using Santa Claus. For inspiration, Sundblom turned to Clement Clark Moore's 1822 poem "A Visit From St. Nicholas." Moore's description of the man as "chubby and plump, a right jolly old elf" led to an image of Santa that was warm, friendly and human. For the next 35 years, Sundblom painted portraits of Santa that helped to create the modern image of Santa -- an interpretation that today lives on in the minds of children of all ages all over the world. Sundblom gets the credit, though Mizen had created the original red white-fur outlined outfit with a black belt (for Coca-Cola, mind you) that Sundblom used.
• 1937 - in Kansas City, Missouri, The Vendo Company creates the first succesful upright coin-op vending machine for the Coca-Cola Company, nicknamed "The Red Top". The Red Top moved the delivery opening to the next bottle in the chest, rather than moving bottles through the ice. This innovation eliminated the jamming problem and made the machine simple and practical. It virtually created a major market and changed the world of beverage retailing.
• Dec 1941 - after the attack on Pearl Harbor, Vendo was authorized to produce 5,000 "Red Tops" for military training camps and war plants.
• 29 June 1943 - General Dwight D. Eisenhower sends a telegram requesting 10 "Coca-Cola" bottling plants for the troops overseas.
  • At the beginning of the war, Robert W. Woodruff, president of The Coca-Cola Company, issued an order to "see to it that every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs the Company."
  • At the outbreak of World War II, "Coca-Cola" was bottled in 44 countries. At the close of the war, 64 additional bottling plants had been shipped abroad to be as close as possible to combat areas in Europe and the Pacific.
  • The presence of "Coca-Cola" did more than lift the morale of the troops. In many areas, it gave local people in those countries their first taste of "Coke" and paved the way for unprecedented worldwide growth for "Coca-Cola" after the war.
  • More than five billion bottles of "Coca-Cola" were consumed by military personnel during World War II.
  • When WWII began, The Coca-Cola Company's use of sugar in the manufacturing of syrup for civilian consumption was restricted to 50% of its prewar average due to rationing. The rationing ended in August, 1947.
  
  
  
• May 15, 1950 - The cover page of the issue of Time Magazine features a "Coca-Cola" advertisement. It was the first time that a consumer product was featured on the cover of Time Magazine.
• 1984 - Los Angeles, California, During the year, Coca-Cola implements a series of programs, including a national Olympic Youth Soccer Competition, an Olympic educational program for schools and Olympic Youth Jamborees, which provided underprivileged children a chance to experience the Olympic Spirit.
• 23 April 1985 - New Coke was introduced. Before they'd tasted a sip of it, millions of Americans had decided they hated New Coke. In blind taste tests people had consistently said they liked the new formula better. However, Coke had spent more than a hundred years convincing America that its product was an integral part of their lives, their very identities. Taste be damned: to do away with Coca-Cola was to rip something vital from the American soul. Americans (never ones to peaceably go along with anything perceived as violating their identity) weren't going to stand for it, and they weren't shy about saying so.
• 11 July 1985 - two Coca-Cola executives announced the return of the original formula. "We have heard you," said Roberto Goizueta, then Chairman of Coca-Cola. Donald Keough (then the company's President and Chief Operating Officer) said:
  
  "There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years. The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people . . .
  
  The passion for original Coca-Cola -- and that is the word for it, passion -- was something that caught us by surprise . . . It is a wonderful American mystery, a lovely American enigma, and you cannot measure it any more than you can measure love, pride, or patriotism."
  
  
• 31 July 1985, - "Coca-Cola" became the first soft drink to be enjoyed in outer space on the Space Shuttle Challenger. A special Company-developed space can was used. One wonders if it might have been Pepsi instead had New Coke remained the only choice.
• Olympics 1992 - Albertville For the first time, radio disc jockeys from major U.S. markets use the Coca-Cola Radio Network's state-of-the-art technology to deliver live reports from the Pin Trading Center.
• Olympics 1992 - Barcelona - The International Olympic Torchbearers Program, presented by Coca-Cola, brings together 150 runners from 50 nations to participate in the Olympic Torch Relay in Spain. The torchbearers are selected through unique local and national promotions staged by the Coca-Cola System. It is the first time people from other countries participate in the host country's Torch Relay.
• 2001 - in China, Coca-Cola's marketers staged the largest Webcast in that nation's history, attracting some 10,000 people for live chat, a poll and an opportunity to "pose" for an online photo with pop star Cecilia Cheung. The photo op alone attracted 58,000 hits.

As might be expected, the introduction of Vanilla Coke in 2002 brought great joy to the vanilla factors of Antananarivo, especially as prices were already rising in response to a recent hurricane destroying part of the vanilla harvest.

The Many Uses of Coca-Cola

1. In many states the highway patrol carries two gallons of Coke in the truck to remove blood from the highway after a car accident.


2. To clean a toilet: Pour a can of Coca-Cola into the toilet bowl. Let it sit for one hour, then flush. Coke removes stains from the vitreous china.


3. To remove rust spots from chrome car bumpers: Rub the bumper with a crumpled-up piece of aluminum foil dipped in Coca-Cola.


4. You can put a T-bone steak in a bowl of coke and it will be gone in two days.


5. A tooth left in coca-coca will dissolve overnight.


6. To clean corrosion from car battery terminals: Pour a can of Coca-Cola over the terminals. (Take the battery out of the car first).


7. To loosen a rusted bolt: Applying a cloth soaked in Coca-Cola to the rusted bolt for several minutes.


8. To remove grease from clothes: Empty a can of Coke into a load of greasy clothes, add detergent, and run through a regular cycle. The Coca-Cola will help loosen grease stains.


9. It will also clean road haze from your windshield.

The active ingredient in Coke is phosphoric acid; before dilution, its pH is 2.8, strong enough to dissolve a nail in about 4 days. To carry Coca Cola syrup (the concentrate) the commercial truck must use the Hazardous material placards reserved for Highly Corrosive materials. Needless to say, it is greatly diluted before it reaches the consumer.

We've all seen this e-mail forward at one point or another; this one seems to be a pretty standard variation, although it doesn't have the usual conclusion: some form of "Coke is bad! Don't drink it!" I guess it's implied, though.

So, how much of this do you think is true? I usually clean road haze off of my windshield with water, so I'm betting that coca-cola will also do the job. Toilet bowl cleaning sounds possible; steak-eating less so. Mark down your bets, and then read on to see how you did!

Claim #1: The highway patrol uses coke to clean up blood -- False. While the ever-groovy MythBusters have shown that coke can be used to clean up blood, there are no verified accounts of it being used by any official agency to do so. (You can still give yourself partial credit if you said True).

Claim #2, 3, 6, 7, and 9: Coke will clean almost anything -- True!¹. Carbonic acid is a useful cleaner, although soda water will make less of a mess and be just as effective in most cases. The phosphoric acid in coke will also attack rust, and while coke is not the best rust remover, it should work. (NOTE: I can not find any references that I trust that recommend that an untrained person should be trying to remove rust from car battery terminals. If you do decide to try this, some sites recommend baking soda and water as the first choice in car battery corrosion removal).

Claim #4 and 5: Coke will eat x -- Nearly always False². Coke may eat a lot of the things that it is claimed to eat, but usually not in the time period claimed. Steak is up in the air - will it ever dissolve? Probably not. No one has ever cared enough to wait around and see.

Teeth enamel will probably dissolve, but it'll take a couple days before you start to see any effects, and you may need to use a milk tooth rather than an adult one (the teeth that children loose have already lost the root, and are hollow shells of enamel). Tooth enamel is sensitive to acid, and coke will eat it away. Other drinks, such as orange juice, have more citric acid than does coke, and therefor should be more effective solvents. To a large extent the tooth-eating claim is based on Clive M. McCay's testimony before a U.S. House of Representatives' committee.

In the fall of 1950, a Cornell University professor named Clive M. McCay testified before a select committee in the U.S. House of Representatives that the sugar in Coke caused cavities. And, he said, the phosphoric acid was a dangerous additive. Giving a vivid account that instantly became part of the national folklore, Dr. McCay described how a tooth left in a glass of Coca-Cola would soften and begin to dissolve in a period of two days.
-- Secret Formula, written by Frederick Allen.
http://www.snopes.com/cokelore/tooth.asp

I didn't find this all that convincing, so I started browsing dentistry pages. After much searching, I haven't come up with much more than the fact that acid is bad for your teeth, and will destroy the enamel. I would recommend running the experiment for at least a week, and possibly changing the coke every so often. By far the greatest coke-related threat to your teeth is the sugar it contains, which is why we have diet coke.

Nails are the same deal, only ever so much more so. In theory, the phosphoric acid will eat the iron, but at a much slower rate than it eats rust. I can find absolutely no information of how much coke would be needed, or how long a nail would have to soak, to dissolve. I am certain that it would be a lot, and a very long time.

Claim #10: Coke cleans off road haze -- True! But it makes your car all sticky.

And finally: do trucks carrying Coca-Cola syrup need hazmat stickers? The urban myth sites are unusually silent, but sometimes refer to antidotal evidence. The antidotal evidence is shaky. On the other hand, some of Coca-Cola's adds looking to hire drivers do require hazmat endorsements, although other adds just list them as a plus. Most likely some of the trucks delivering chemicals to the plants making the syrup do require these stickers, but those delivering the syrup to the bottling plants do not.³

References and comments:

1. These claims are collected from Joey Green's book Polish Your Furniture with Panty Hose. He is reprinting claims made by house-hold hints columnists Heloise (toilet bowl, battery terminals) and Mary Ellen (rust off chrome, rusted bolt, remove grease from clothes). I have not tested these out myself, but the Coca-Cola company has not sued his book off the market, and www.snopes.com (urban myth busters) recognizes the book as a reliable source. More importantly, none of these people has anything to gain by recommending false household tips in their columns and books; that would be counterproductive. See:
Polish Your Furniture with Panty Hose, Joey Green, 1995, Hyperion Books.
http://www.wackyuses.com/coke.html and
http://www.snopes.com/cokelore/acid.asp
On the other hand, coke may stain; in at least one experiment, it stained the toilet bowl it was supposed to clean.
http://www.clevermag.com/investigations/coke.htm

Other references:
http://www2.coca-cola.com/contactus/myths_rumors/index.html

"I'll have a Coke."
"Is Pepsi alright?"
"Yeah. Whatever."

If you're like me, you've had that little snippet of a conversation so many times you don't even notice it anymore. But every so often I used to wonder about the anal people out there who really cared so much that they would order another drink instead. But not anymore.

This writeup expands a bit on the items above that mention that Coca Cola is a very heavily protected brand name.

Coca-Cola Co. v. Overland, Inc.
692 F.2d 1250
C.A.Nev.,1982.

That, my non-lawyer friends, is a citation to the judgment in a lawsuit. You'll note that Coca-Cola is in a dispute with Overland.

Overland owns the Topaz Lodge and Casino. It seems that, "on 23 of 29 separate occasions over a three-year period, employees at the Topaz Lodge and Casino substituted, without comment, Pepsi-Cola in response to specific orders for 'Coca-Cola' or 'Coke.'"

Yes, that's right. Coca-Cola sued them because they didn't ask "Is Pepsi okay?" when people requested Coke.

How did they know?

Coca-Cola has a Trade Research Department whose entire purpose is to, "ensure that retail establishments do not misuse the trademarks of the Coca-Cola Company." I'm going to quote the rest of the footnote because its just too great. All emphasis by me:

The standard procedure followed by Trade Research employees is to visit retail establishments who do not serve the products of the Coca-Cola Company and, without identifying themselves as Trade Research employees, place a specific order for "Coca-Cola" or "Coke." If a beverage is served without comment, the Trade Research employees take a sample of the beverage and send it to Coca-Cola's laboratory for chemical analysis in order to establish that the beverage is not a product of the Coca-Cola Company. The Trade Research employees carefully document all the facts pertaining to their orders.

An employee of Coca-Cola's Trade Research Department first visited the Topaz Lodge and Casino in December 1975. After discovering that another beverage was being served, without comment, in response to specific orders for "Coca-Cola" or "Coke," the Coca-Cola Company appealed to Overland to stop its deceptive practice. When subsequent investigations revealed that the deceptive practice was continuing, Coca-Cola again communicated its protest to Overland. Only when further investigations showed that the deceptive practice had not ceased did Coca-Cola bring suit for trademark infringement and unfair competition.

Yes. If you own a restaraunt and don't ask, "Is Pepsi okay?" Coke might send some people to test you, and then sue.

In case you're wondering, Coca-Cola won this suit. In summary judgment. It didn't even go to trial.

Just a sidebar here, in case you're wondering why Coke would go to such great lengths to make sure people who order Coke get Coke. It's possible for a brand name to be used so frequently that it just becomes another word. We xerox things. We don't grab a facial tissue, we grab a kleenex. Spam is not just a food, its the damn thing in our email boxes.

Once that happens, a corporation can lose its trademark. Anyone (I think) can sell a xerox machine, even if they're not Xerox Corp. The same is true of a frisbee.

How can a corporation prevent this from happening? By suing. A court won't find that a trademark has become generic if there are reams of prior suits making clear that it is not.

I'm sure there's a more detailed answer to this, but I'm not a lawyer, let alone a trademark lawyer. But that's the basic reason.

All quotes taken from Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250 (C.A.Nev. 1982).