Belching Out the Devil (40 page)

 

Muthar Kent,
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the incoming CEO, sits next to his outgoing counterpart. As Isdell is tall and lean, so Kent is squat and square, between them they possess the classic shape of a double act.

 

Muthar Kent takes his turn at the podium and says as CEO elect he is ‘humbled' and ‘honoured to be part of this great legacy…' and thunders that we all have ‘good reason to be excited' in the future of the company. ‘I believe,' he cries from the podium, ‘there is no better packaged goods consumer business to be in, today or in the future, than the non-alcoholic ready-to-drink beverage industry.' It is noticeable that he never refers to Coca-Cola as ‘pop', ‘fizzy pop', ‘sodas' or even ‘carbonated sodas' - Muthar Kent describes Coca-Cola as ‘sparkling beverages'.

 

His speech is littered with sentences like ‘Our sparkling beverage growth is achieving its highest rates in almost a decade!' and ‘Sparkling beverages are the oxygen of our company.' In fact he uses the phrase ‘sparkling beverages' eight times so he obviously isn't taking the ‘golden stream'. It is out with the old soda or pop with its image of sugar-laden fizz and in with the calorie-free phrase ‘sparkling beverages.'

 

But it is Isdell's speech following Kent's, that proves to be the more intriguing, and he begins by saying, ‘We're transforming our business very simply because the world in which we operate has changed. Our planet and its resources are facing increasing pressures.' As an opening it is standard fare for
business leaders to stress changes they are bringing to keep the company at the top of its game, but he continues, ‘We have a presence in people's lives that reaches beyond that magical moment of providing that simple moment of refreshment. We're also an employer, a business partner, a part of the community, a global citizen; and I believe we must play our role in supporting sustainable communities.'

 

Having just seen some of those communities that have not been sustained by Coke, I crane my neck around the room searching out other small scowls of disbelief. However, it becomes clear that alongside the business journalists, the investment fund managers and the vested interest groups there are ordinary shareholders here, not rich people just folk with a few dollars and a will to invest. Behind me sits a family on a day out. On one side of the family group sits the father, in a green check shirt, his back bolt upright with his hands on his knees. At the other end of the line a twelve-year old-boy wearing a baseball hat sits slumped dangling his rucksack between his knees. In between them is the mother, in her forties, knitting a red, white and blue jumper.

 

‘Last year,' says Isdell, ‘we set a very aspirational target: a goal of becoming entirely water neutral in our operations on a global basis…In the past, some of you have expressed some concern about our business in India that primarily revolved around water and water use. I can tell you not only have we listened, but we've taken action. For starters, there are over three hundred rainwater harvesting structures across seventeen states in India.' This is Isdell in full CEO as Indiana Jones mode, leading a company that faces criticism and triumphs. From here he deftly moves through the emotions of contrition, struggle and hope.

‘People have talked about our transparency in India, so
we agreed to an independent assessment of our water management [by TERI],' says Isdell, underlining the idea that the company has risen to the charges of its critics. ‘There were some areas that they identified where we can make some improvements; these were just recommendations, and of course we will proceed with those.' Without scrutiny this looks like a company that have looked deep into their corporate soul admitted imperfection and embraced change. The knitting mum is still working on patriotic woollen wear but the checked shirt dad is nodding vigorously in appreciation at the scale of Coke's challenge.

 

However, with scrutiny Isdell's comments reveal a sleight of hand and quite a good one too. The improvements the company is going to make are small ones, relating to waste water improvements and compliance issues. These may be necessary but they are not the major recommendation of the report, which is to shut the plant down. So the inclusion and acknowledgment of some of the TERI report's criticisms is a masterly stroke, humbly admitting to minor errors while ignoring the major indictments.

 

Isdell lunges into the climax of his speech. ‘The challenges facing our planet are too urgent and complex for governments alone, business alone, or NGOs alone to solve. Working together, we can create a multiplier effect that helps build sustainable communities and addresses the issues of our planet.' He is a man with a mission going beyond the mere niggles of a few critics and now set to solve the problems of the world. ‘All the efforts I have talked about are “nice” things to do, but we are not doing them just because they are nice. We've done them because they're the steps that we must take to earn a profit and to return a profit to you, our shareholders.'

And thus he has faced down his critics, mended the ways of the company, embraced social change, shouldered the burden of world leadership and wrapped it all into a corporate philosophy: you make money if you are seen to do good.

 

The board in front of Isdell lead the appreciation of their captain of industry. Behind me the woman has put down her knitting to join the applause. But the dad is holding his hands to his chest clapping wildly. He is a fan. Had he spare underwear to throw it would be in the air by now and Isdell would be whispering to his roadie ‘That one to my dressing room.'

 

As the applause starts to dip B Wardlaw turns to me and says, ‘Wow, that's the impact you folks have had, you wouldn't have heard that speech three years ago.' And I believe B, it has been the activists, union members, villagers, shopkeepers and students that have forced the Company to look at the issues. We would not have heard that three years ago, the speech was totally about Corporate Social Responsibility.

 

But it is also evident that the Company's old ways are resolutely at the helm. They remain wedded to their mantra that ‘we only make and sell concentrate and are not responsible for the bottlers or suppliers' when it is clear that the ‘Coca-Cola system' is controlled by The Coca-Cola Company, both in terms of the franchise and The Coca-Cola Company's share ownership. It is also evident that the company has not addressed the specific issues.

 

The story told here is the story of a company going through the growing pains of Corporate Social Responsibility and emerging a changed and mature business leader working for a better world. But any storyteller knows that what you leave out of a story is as important as what is kept in. And Coca-Cola's omissions are the uncomfortable specifics.

Campaigners have forced the company to respond and the company has responded with PR. It seems to be their pathological response. Ron Oswald, the leader of the International Union of Foodworkers, a man who regularly meets with the company, said ‘When you build that whole thing around a product that nobody needs, that product is pure image…so the communications people inside Coca-Cola
accumulate huge amounts of power over many years…they see issues of substance and they interpret them as issues of communication and then they try to communicate the solution, instead of dealing with the issue.'
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T
he shareholders' resolutions are next on the agenda and the outcome is predictably in favour of the company. Isdell's responses to questions are by now so prepared, prepacked and ready to go that you can practically hear the microwave bell ping before he opens his mouth. Polite and orderly, he controls the meeting like a teacher in a slightly rowdy class. Ray Rogers shouts ‘Point of order' and jumps out of his chair at every possible opportunity. Amit tells Isdell he is insulting. B says ‘I have worked out that with about 1,500,000 shares in the company and an hour to question the board that gives each share about 0.00024 seconds' worth of time, so I will be as quick as I can' before putting his idea of a board committee for human rights.

 

Isdell bats away the questions with his trusty PR shield and gets a few shareholders making supportive statements too, one shareholder compares Isdell to a ‘gifted athlete', making leadership look so easy. Someone else congratulates the company on advertising on family-friendly TV like
American Idol
…But the meeting closes with a gentleman being called from the front executive enclave, he has thick glasses and is reasonably elderly.

 

‘My name is Herbert Pinkus,' he says, looking as if he had been well named. ‘I control around 10,000 shares, I personally own around 6,000 shares. I want to congratulate the board and thank them for the fine job.' Then he turns to face the rest of the room, ‘And I also want to say a word or two to the
naysayers here. The Coca-Cola Company is not the conscience of the world, The Coca-Cola Company is not the policeman of the world. The mission of The Coca-Cola Company is to enhance shareowner value and I think they do a terrific job in that.' He starts to get a round of applause but carries on over it raising his voice, ‘ and I have another personal message for the naysayers.' He pauses for good effect, ‘Sell your shares and get out of the way. Thank you.'

 

The executive enclosure erupts and claps heartily and so do I. For all the talk of sustainable communities it is refreshing to hear an honest opinion, red in tooth and claw. B nudges me, ‘I am glad you had an opportunity to see that attitude in action. America love it or leave it!' And he smiles, despite having had his proposal to set up a human rights committee within Coke defeated by 91 per cent of the shareholders.

 

The meeting closes and the lights are raised. The executives start to stand in their remarkably uniform bespoke suits, stretching their legs and slapping each other on the shoulder. A small group of big men assemble around Neville, and when the prerequisite number are fore and aft they set off down the side of the room, with Isdell in the middle, through the shareholders and the crowd. I remain seated, surrounded by the noise of scraping chairs and the litter of discarded order papers, thinking through what I've just heard.

 

This is the problem. You can call it sparkling beverages as many times as you want and you can talk of magic moments of refreshments but Coca-Cola is fizzy pop. You can talk of consumers inviting you into their lives and you can treasure secret formulas but all you are selling is essentially sugar and water: fizzy pop. No one actually needs Coca-Cola and no one would die if it disappeared off the planet tomorrow.

 

And that is my realisation. The brand is the most important thing the Company has because put aside the concentrate and that is all they have left to sell. The brand is what transforms fizzy pop into Coca-Cola, that intangible bundle of images and feelings held within people's minds and kept alive on a $2.4 billion advertising budget.
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Coca-Cola is more image than product and as such exists as a mental construct within each and every one of us. Except my image of Coca-Cola is no longer linked to polar bears, Santa ads, iconic script and bottles. When I think of Coca-Cola now I think of Luis Eduardo in jail throwing notes wrapped in sweets out of the windows to his daughter on the street. On other days I think of a child disappearing into forest of sugar cane and sometimes I think of Raquel Chavez winning against the company or the protestors who shut down the plants in India.