Salt Sugar Fat: How the Food Giants Hooked Us (17 page)

J
effrey Dunn’s first job at Coca-Cola confirmed everything he’d heard about the company growing up. His father had worked there since Jeffrey was five, first as a sales director and then as a pioneer of Coke’s renowned marketing, which had singlehandedly put the soda into the biggest sports-entertainment venues around the world. Every evening, his father would regale him with some fresh and rousing story about his valiant efforts to block his archnemesis, PepsiCo, and prevent them from getting a single account. One day, he would be keeping McDonald’s from falling into his rival’s hands; the next, he would be fighting for his monopoly at Yankee Stadium.
“We were always keeping track of how my father was doing relative to fighting off the ‘no-good bastards’ of Pepsi and maintaining the integrity of the Coke brand,” Dunn said.

Now it was Jeffrey’s turn. In 1984, at age twenty-seven, he joined the division that was Coca-Cola’s equivalent of the Marines: fountain sales. His job was to go out on the road and get Coke into the carbonated drink
dispensing machines at fast food chains and convenience stores, from Hardee’s to 7-Eleven, and Dunn, a brawny former athlete who hated to lose more than he loved to win, was an ideal recruit. In fountain, there could be no complacency. These were the front lines of Coca-Cola’s campaign to dominate the soda business and reshape America’s eating habits. Fountain was all about taking beachheads and holding ground, and Coke ruled over Pepsi in these outlets two to one. This was where the supersize phenomenon was born, dreamed up by the marketing corps as a way to sell yet more Coke with hamburgers and fries. The skirmishes with Pepsi were endless and intense. Around the offices, they had a name for losing one of these fights—they called it “being positioned.” And with Jeffrey Dunn, the company could count on one thing: He was not about to be positioned.

“There was no status quo, because everyone in the marketplace is constantly positioning,” he told me. “You were either going forward or you were going backwards. They called it positioning because of where you stood in relation to the rest of the universe. The other companies were constantly pushing on you, trying to capture customers. And you gotta push back, because if you’re not defining and delivering on your position, then you are by definition
being
positioned. So you really learn this in the soft drink business. It’s hyper-competitive, and you’re constantly working on not just, What do I want my brand to stand for? but also, How do I want to position it versus every other brand in the market?”

Kellogg and General Mills and other food manufacturers might think they are pretty good at this positioning stuff, but their efforts pale in comparison to those of Coca-Cola, which isn’t so much a company as a $35 billion institutional force. Coke didn’t just set up a war room, like Kellogg did with its special team dedicated to identifying and targeting the fears and desires of consumers. At Coca-Cola, the whole organization was a war room. The desks and tables in Coke’s headquarters complex in Atlanta were papered with charts that mapped out the company’s strategy, and every employee was expected to devote long hours to the cause. Coke prided itself on being progressive, but at one company meeting in the 1990s, a female executive asked whether Coke might consider creating a
day-care facility to ease the scramble at 6
P
.
M
., when children needed picking up long before the day at Coke was done. The company president, Douglas Ivester, who had no kids and often worked seven days a week, stared at her for a moment and then said,
“There will never be a day care on this campus.”

The man who instilled this ethos, Robert Woodruff, was a classic corporate warrior. He was working for an automobile maker, the White Motor Company, in 1923 when his father asked him to move to Atlanta. He needed help running his newly acquired company, Coke, which was foundering. The elder Woodruff, Ernest, had led a group of bankers in buying Coca-Cola for $25 million four years earlier when Coke’s profits had gone flat, but the company’s prospects had only grown worse. Sales were falling, despite Coke’s attempts to boost consumption through the introduction of a cardboard carton that could hold six bottles. Coke was also distracted by fights with its bottlers—the franchises, numbering 1,200 at the time, who had the plants where the Coke concentrate was combined with sugar, water, and carbonization.

Robert Woodruff—who would oversee Coca-Cola for six decades—is widely credited, among many other things, with two brilliant innovations. In 1927, he created a division called the Foreign Department, which introduced Coke to the rest of the world. Then, at the onset of World War II, he publicly declared that every soldier in uniform would get Coke for five cents a bottle, no matter where they were stationed or what it cost the company to put those bottles into their hands. As a result, a generation of men and women came home hooked on Coke.

Woodruff, however, had another insight—this one not as frequently discussed in the business school case studies—that would help take the company from solid to spectacular. He figured out how to tap into people’s emotions better than anyone else in the industry of consumer goods, whether food or beer or cigarettes. His method didn’t require slogans or celebrity endorsements or the kind of money the company would spend every year on advertising, though all those things helped. It went deeper than that. It focused on getting Coke into the hands of people, especially
kids, when they were most vulnerable to persuasion—those moments when they were happy. That is how Coke came to be partners with America’s favorite pastime.
“The story they always tell at Coke,” Dunn said, “is Mr. Woodruff saying, ‘When I was a kid, my father took me to my first baseball game, and there was nothing more sacred to me than that moment with my father. And what did I have to drink? I had an ice-cold Coke, which became part of that sacred moment.’

“The idea was to be in all those places where these special moments of your life took place,” Dunn continued. “Coke wanted to be part of those moments. That was, if not the most brilliant marketing strategy of all time, probably one of the best two or three. You not only had the imagery, it’s like somebody was in their own television commercial. You’re in the moment, you’re drinking the product, you have that emotional context that sets it. And Coke really came to have a very high share of those experiences. It was about having a ubiquitous presence. Inside Coke, it is called the ‘ubiquity strategy.’ In simple terms, Mr. Woodruff’s words for that were: ‘Put the product within an arm’s reach of desire.’ ” This helped turn the soda into much more than a product. To the envy of every food company on earth, Coke became the most powerful
brand
in the world—a brand that was deeply rooted in people’s psyches, able to generate staggering heights of consumer loyalty.

As Coke’s sales doubled and tripled and kept going up—along with those of Pepsi and other soft drinks—so too did America’s inclination to overindulge. In nutrition circles, where the causes of obesity are discussed, there is no single product—among the sixty thousand items sold in the grocery store—that is considered more evil, more directly responsible for the crisis than soda. The problem, as growing numbers of nutritionists see it, is not the calories in soda, though calories are ultimately what causes us to gain weight. Rather, it’s their form: Research suggests that our bodies are less aware of excessive intake when the calories are liquid. Health advocates don’t blame the single can of Coke with its roughly nine teaspoons of sugar. What made Coke evil—or, depending on who you are talking to, wildly successful—was the supersizing. As the obesity crisis was building
in the 1980s, those cans gave way to 20-ounce bottles, with 15 teaspoons of sugar; liter bottles, with 26 teaspoons; and the 64-ounce Double Gulp sold by the 7-Eleven stores, with 44 teaspoons of sugar. Beyond the size of each serving, Coke’s success came from the numbers of these cans and bottles and cups that people, especially kids, were drinking every day.
By 1995, two in three kids were drinking a 20-ounce bottle daily, but this was merely the national average. At Coca-Cola, executives didn’t speak of “customers” or even “consumers.”
They talked about “heavy users,” people with a habit of two or more cans per day. As Dunn’s career stretched into its second decade, the numbers of these heavy users was only going up.

In pursuing this massive consumption,
Dunn rose nearly to the top of the company. He became president for North and South America, a job that entailed winning the brand loyalty of nine hundred million people. He lived Coke and loved his work and the company, a devotion shared by many at Coke, and for all those years he had no qualms about what he sold. He achieved this peace of mind, he said, by simply not thinking about what he sold. Rather, he thought only about the selling, and the selling was great, until it wasn’t anymore. This moment came one day in 2001 when his lieutenants took him to a part of the world that excited them like no other: Brazil. The economy there was booming, and the population there had the potential to match the soda consumption levels in the United States; Coke only had to show them the way. As Dunn toured some of the targeted neighborhoods, he felt his stomach sink. Suddenly, the kids there, along with the kids in the United States, seemed so unfairly lured, so helpless in the face of the company’s tactics, so utterly vulnerable to the addictive powers of Coke, that Dunn decided his company had gone too far. After trying over the next four years to steer the company back to saner nutritional policies, he resigned. For the first time since then, he agreed to discuss some of the company’s deepest secrets that ultimately led to his own deepest regrets.

Jeffrey Dunn is no ordinary whistleblower. He doesn’t look back on his time at Coke with bitterness, nor does he view his former colleagues as evil. Rather, he said, they are blinded by the desire to win.
“At Coke, I do
think they believe they are doing the right things,” he said. “If you really think you are doing the wrong thing and covering it up, it’s hard to deal with that emotionally. I’ve still got friends there, and I suggest to them, ‘It’s just very hard to see yourself from the inside.’ ”

“But the obesity trend is an epidemic,” Dunn continued. “And there is no question its roots are directly tied to the expansion of fast food, junk food, and soft drink consumption. Whether you can identify any one of those things is probably a fair question. Soft drink guys prospect on that all the time. But you can look at the obesity rates, and you can look at per capita consumption of sugary soft drinks and overlay those on a map, and I promise you: They correlate about .99999 percent. As they say, you can run but you can’t hide.”

J
effrey Dunn can’t quite pinpoint the moment when he first knew he would work for Coca-Cola. He guesses he was seven or eight. And he probably wasn’t the only kid in his family who felt that way. He grew up in the San Fernando Valley with four older brothers. The Dunn boys played baseball. They surfed. They tangled with one another, and—this being the 1960s—they grew their hair long. Their mother had been a cartoonist at the Disney studios, but she traded that career to wrangle her boys full-time or, as Dunn likes to say, “to keep us out of jail.” In the evenings, when Jeffrey and his brothers would tumble through the door, the day’s real entertainment would begin: Their father would come home and transfix them with stories of his job.

Walter Dunn worked for Coca-Cola, but he could have passed for a U.S. senator. Tall and handsome with a big head of white hair, the elder Dunn also had the gift of speech. The five boys would sit, rapt, as he spun his latest war stories, which invariably involved the competition, Pepsi. “When other kids were coming home and talking about how school was, Walter would come home and tell stories about Pepsi making a challenge, here and there,” Dunn said. “He worked in the fountain department of
Coke’s offices in Los Angeles, and one time when 7-Eleven decided to put Pepsi into their stores alongside Coke, Walter was called in over the Christmas holiday to help stop it.”

In 1970, Walter Dunn moved his family to Atlanta, where Coke is headquartered, to take a much bigger job.
He was put in charge of the prestige accounts, the company’s most valued relationships—and, at this point, the stories around the dinner table got even more colorful. It was during these years that Walter Dunn developed—invented, really—the enterprise known as sports and entertainment marketing. Under chairman Woodruff’s direction, Walter Dunn’s job was to put Coke’s logo into stadiums, movie theaters, amusement parks, fair grounds, and every other venue in the country where people had fun. He cut endorsement deals with athletes and teams and stadiums, which for Jeffrey, now a teenager, was a dream come true.
“He took his job very seriously,” Dunn said. “Coke had about an 80 percent share of what you would define as prestige accounts, so every one of these that came up, Pepsi would try to take them away. Walter took this personally. He was maintaining the integrity of the Coke brand. I was always hearing about the Buffalo Bills or the Dodgers or the Yankees, and if you’re a kid growing up, all those names
meant
something to you.”

Listening to his father, Jeffrey Dunn knew that he had the work ethic needed to succeed at Coke. But it wasn’t until one day in high school that he knew he could do more than work hard—that he, too, could lead and inspire others to give themselves over to something larger. He was the captain of the basketball team, and early in one heated game his coach pulled him off the court after he committed a foul. Dunn, feeling that the coach was being too timid, picked up a chair and threw it eight rows into the stands—at which point, the coach promptly sent him to the locker room. His teammates, however, who thrived with Dunn as their captain, had other ideas. They confronted the coach at halftime and insisted he put Dunn back in the game. Which is just what the coach did.

In deciding he wanted to work for Coke, Dunn faced one small hurdle. The company had a strict rule against nepotism, and his father had
not been just any Coke employee. The riches Walter had brought to the company had made him a star, making it all the more difficult to overlook when Jeffrey came knocking on the door, résumé in hand. The twenty-seven-year-old Jeffrey had already earned his stripes through a stint with E. & J. Gallo Winery, selling door to door to liquor stores in Mississippi, where he picked up some tricks in handling store owners, merchandising, and working the competition. He also worked for Seagram, where, in the course of less than two years, he rose to the company’s director of sales for seventeen western states. Still, getting into Coke, where he had always wanted to work, was an ordeal.