The Coke Machine - Michael Blanding [72]
“When I bought VitaminWater, frankly I thought I was doing myself a favor healthwise,” says James Koh, a San Francisco gym rat who drank the stuff regularly. “I had no idea I was actually getting almost a Coke’s worth of sugar and calories.” Koh is now the lead plaintiff in yet another class-action lawsuit filed by CSPI, which may finally get its day in court. This time, CSPI didn’t even bother calling Coke before filing the suit in January 2009. As a sign of the increasing acrimony between the company and its nemesis, Coke blasted the lawsuit as “ridiculous and ludicrous.” Using language rare even for a company under attack, the company went on to call the suit an “opportunistic PR stunt” and “grandstanding at a time when CSPI is receiving very little attention.”
At the same time, in response to press inquiries, Coke claimed it hadn’t yet had the opportunity to read the complaint, so it couldn’t respond to specific charges. Had the company read it, they would have found it alleged a grab bag of bogus health claims on behalf of Coke to hide the fact that the drink is essentially watered-down soda.
The FDA allows food companies a lot of leeway in making claims about the nutritional effects of supplements—for example, that calcium supports the formation of strong bones. It prohibits companies from marketing food items as drugs intended to treat or cure disease (though in practice enforcement of this has been lax). VitaminWater’s claims have skirted and in some cases crossed the line with claims that antioxidants in one flavor “may reduce the risk of certain chronic diseases,” and vitamin A in another “may reduce the risk of age-related eye disease.”
Even more egregiously, says CSPI’s Stephen Gardner, the brand has deliberately misled consumers through a practice of “double labeling”—listing the good stuff like vitamins and other nutrients by the bottle size, while listing the bad stuff like sugar and sodium by the serving size in order to minimize their appearance, since there are two and a half 8-ounce servings in a 20-ounce bottle. “They say there are only 50 calories, but in effect there are 125 calories,” Gardner says, bristling. “Why should consumers assume they are being lied to in the front? Why should they have to study the very hard-to-read fine print to know the ingredients?”
Remaining a step ahead of the backlash, Coca-Cola recently released VitaminWater 10, with just 10 calories per serving (that is, 25 calories per bottle). The product contains stevia, a plant-derived sweetener that has faced its own controversy over claims it contributes to infertility and cancer, even though it has just won approval as safe by the FDA.
If Coke doesn’t succeed on VitaminWater, they may have few options left in the United States and European markets. While the key to capitalism is constant innovation, the company may have simply reached a plateau in developed countries. While Coke has survived the backlash against soda in schools, the sugar-sweetened carbonated beverage market has stopped growing. Bottled water, too, has stagnated, and if it doesn’t revive, it will spell a big loss to Coke’s profit center.
Fortunately for the company, it isn’t dependent on the U.S. and European markets—and hasn’t been for a long time. Like the tobacco companies, which looked overseas when they came under fire in the United States, Coke has increasingly looked to countries like Brazil, China, and Russia as its next big markets. In addition to the growing populations of countries in the developing world, the company has the added benefit of a more lax regulatory environment, allowing Coke to take advantage of lower costs. In doing so, however, it has created an even bigger conflict between the image of international harmony the brand projects and the reality of the company’s operations on the ground.
The world of Coca-Cola isn’t the World of Coca-Cola.
Part Two
TEACHING THE WORLD