The Coke Machine (15 page)

 

 

 

Almost immediately
after forming the new Public Health Advocacy Club, Jackie Domac and her students took action, attempting to persuade the school to cancel its contract with Coke and implement healthier choices in the vending machines. They knew it would be difficult to convince their fellow students that the soft drinks they enjoyed were actually bad for them.
Liquid Candy
had only just been published, and studies were only beginning to link soda to obesity and other health problems. Even so, the students worked to raise awareness, creating whimsical T-shirts and holding taste tests for organic soy milk in the cafeteria.

Momentum grew after Domac and her students met directly with a representative from Coke’s bottler, who reluctantly agreed to stock half of the slots with juice and other more healthful beverages (but only if the school accepted a 15 percent commission on those items, compared to 36 percent on soft drinks). When Domac triumphantly took a French film crew to show them the vending machines a few weeks later, she found the company had changed virtually nothing. “I had asked them to meet us halfway, and now I just embarrassed myself,” she remembers. “That was it, they were out.” She adopted more confrontational tactics, running for and winning a spot on the parents’ advisory council and bringing students in to raise the issue during meetings.

It was money, however, that eventually did the talking. Domac and her students applied for a state health grant in 2002 to serve as a model school for nutrition. When they received a windfall of $250,000, the administration agreed to cancel the deal with Coke on a trial basis to see if the new strategy could work. “You can scream all you want about how healthy beverages prevent obesity and diabetes, but unless you can show a school that it has enough money to run its programs, that’s going to fall on deaf ears,” Domac says. With the new money, the students worked to get an array of juices and soy beverages into the vending machines at last, along with baked chips and trail mixes. While vending machine sales initially dipped, they eventually rose higher than before—$6,163 in 2002 versus $7,358 in 2003, according to Domac, who still keeps the figures.

Flush with their sense of victory, the student health club took the issue to a higher authority even before those numbers came in—arguing for a ban on soda in the entire Los Angeles Unified School District, the second largest school district in the country, with more than 700,000 students. Again, they used creativity to make their point, storming meetings dressed in necklaces of plastic fruits while performing a foot-stomping chant, “Take Back the Snack.” “Facts are great, but they are also quite boring,” says Domac. “Having kids being vivacious and happy with a positive message went a long way.” The students made impassioned speeches about the new health craze at their school, at the same time marshaling data from a new UCLA study showing that 40 percent of students in the Los Angeles district were already obese.

Coke waged a creative campaign of its own, threatening to pull its sponsorship of the district’s Academic Decathlon events at the school in a blunt attempt to silence opposition. But in the end, the grassroots strategy worked: In August 2002, the Los Angeles Unified school board unanimously voted to cut their contract with Coke. Starting with the 2004 school year, the district would sell no soda at all, stocking its vending machines with only milk, water, and drinks with at least 50 percent juice and no added sweeteners.

After three years of struggle, the students had won—an empowering and humbling experience. “I’ve never been part of anything like that where people so young can have so much sway,” says Faisal Saleh, one of the student leaders, who is now majoring in theater arts at Santa Monica State College. “That’s something I take pride in.” The success in Los Angeles, however, was hardly the end of the battle against Coke in schools—in fact, it was only the beginning. Even while Coke was losing ground in California, the company soon roared back, determined not to lose out on a hard-won new market for its products at a critical time.

By the time L.A. passed its resolution, word had already spread to other school districts, spawning similar resolutions in San Francisco, Sacramento, Madison, and Oakland. It wasn’t just Coke that stood to lose from the backlash—but Pepsi as well. The two companies, bitter rivals in the press, closed ranks to defend themselves through their trade organization, the National Soft Drink Association. As with the initial criticism of CSPI’s report, the group painted Domac and her students as misguided. “This is like using a squirt gun to put out a forest fire,” said NSDA spokesman Sean McBride. “The LAUSD missed an important opportunity to stem rising obesity rates by having more physical education in their schools and better nutrition education.”

That notion that “it’s the couch, not the can,” became a rallying cry for Big Soda. Coke quickly launched a pilot program in Houston, Philadelphia, and Atlanta called “Step with It!”—distributing Coke-red pedometers to kids to encourage them to exercise more by taking 10,000 steps a day. The program won praise from Health and Human Services secretary Tommy Thompson, and expanded to 250 schools around the country by 2003. Even as Coke was playing nice in the media, however, it was funding studies to cast doubt on the connection between soft drinks and obesity.

Along with Tyson Chicken and Wendy’s, Coke reportedly “donated” $200,000 to a new group called the Center for Consumer Freedom (CCF), which took the lead in ridiculing the fight against soda and other unhealthy food, all without revealing its funding. (Pepsi publicly disavowed the group.) “There is a rush to blame soda companies that far outstrips any scientific evidence,” said CCF senior analyst Dan Mindus. He pointed to competing studies, one showing that soda had no effect on weight gain, another contending that it was lack of exercise that caused weight increases. What CCF doesn’t advertise, of course, is who is paying for those studies. A recent review by David Ludwig—the author of the previously mentioned study on kids and soft drinks—found that beverage studies paid for by industry sources were four to eight times more likely to deny the connection between soda and weight gain than those funded by government or private sources. He makes the connection between soda and the tobacco industry, which funded studies attacking the connection between smoking and lung cancer for forty years. “Is that happening today with the soft drink industry?” Ludwig asks. “Only time will tell, but there certainly is a precedent.” As its name implies, CCF argues that consumers should be free to eat what they want—without the “food police” looking over their shoulder at the dinner table. “Their ultimate goal is to restrict our access to certain food,” says Mindus. “If they don’t believe that we are to be trusted with the decision of choosing the food we eat, how can Americans be trusted with anything?” The argument has resonance. Shouldn’t Americans be free to choose what they eat and drink? And if it makes them fat, isn’t that their own fault? The argument hits deep in the American psyche, evoking images of founding fathers dumping tea and the Marlboro Man bestriding the Western plains. It also evokes the spirit of free-market capitalism, which enshrines free choice as its highest value.

Ultimately, however, the argument is a cynical one—since the very success of Coke and its fellow companies has given the company the ability to narrow kids’ choices. In 2009 alone, Coke spent $2.8 billion in advertising to push its products to the general public. And in schools, the deck is even more stacked against students, since they can choose only from a preselected array of beverages, all the while subjected to the advertisements of the exclusive brand. “Certainly students should be taught to make healthful choices and take individual responsibility,” says Lori Dorfman, of the Berkeley Media Studies Group, who has analyzed the way that the soda/obesity issue has played out in the media. “But students do not determine what is made available to them in the vending machines. It’s the adults who are responsible for ensuring that schools are doing right by children in their care.”

Even so, the Coca-Cola Company appealed to “choice” in 2001 when it staged a strategic retreat with a new school beverage policy. Coke would continue to allow its products in schools but prohibit exclusive school contracts or up-front payments to school districts. “We just don’t think that schools are an appropriate venue for marketing,” said Coca-Cola America president Jeffrey Dunn during a luncheon announcement in Washington. Coke received a rush of positive publicity, but there was only one problem—nobody bothered to tell the bottlers. Whether by design or benevolent neglect, Coca-Cola Enterprises was caught flat-footed by the announcement. A spokesperson for CCE promised that the bottlers would comply if schools stopped putting out requests for proposals. That promise lasted for all of a week—until Portland, Oregon, put out a request and Coca-Cola Enterprises ponied up a bid.

When the Los Angeles plan passed in August 2002, CCE president John Alm appealed to his chief lobbyist and public relations head John Downs, asking, “What is the plan?” Truth is, the bottler didn’t have one. It would take ten months to declare that it was keeping exclusive contracts, even as the bottler encouraged salespeople to offer schools more choices and eliminated big up-front payments. While Alm was announcing the policy, he also produced a private video for friendly politicians calling obesity “a war that’s been declared on our company.” At the same time, CCE proactively became a chief sponsor of the National Parent Teacher Association in June 2003 with an undisclosed contribution; Downs was placed on its board.

In partnering with teachers and parents, Big Soda emphasized the importance of the money they provided to schools. “They are a win for the students and the schools and the taxpayer,” said the NSDA’s McBride. “I think everybody benefits as a result of these business partnerships.” It was a meme that was picked up by the media. A review by the Berkley Media Studies Group of news articles in 2001 and 2002 found 103 references to obesity threatening children’s health but 115 references to soda sales providing money for schools.

Later analyses, however, showed they weren’t quite the panacea they seemed. A review by Oregon nonprofit Community Health Partnership found contracts yielded on average only $12 to $24 per student annually—and most of that money came from commissions on purchases themselves. Another analysis by CSPI found that soda commissions averaged only 33 percent—meaning that schools made back only a third of each dollar students spent. The most detailed sections of the contracts, CSPI found, were those delineating just where and how the Coke logo was to be displayed—with stiff penalties to schools for noncompliance.

When Coca-Cola Enterprises finally announced its own new policy at the end of 2003, it did little to change any of the existing pouring-rights contracts. According to Downs, the company would prohibit sales of soda to elementary school kids during school hours—an empty gesture, as most elementary schools didn’t sell soft drinks anyway. In addition, it would encourage bottlers to voluntarily control vending machine operating hours in middle schools and high schools. As a response to the criticism against advertising to kids, it announced, it would also end the practice of distributing book covers with the Coke logo (even while the vending machine signs and scoreboards stayed).

As soft drink executives hunkered down at an industry conference in New York City at the end of 2003, the mood was grim. Coke’s sales growth for the year was a disappointing 2 percent overall, and sales volume of Coca-Cola Classic actually
declined
3 percent. Then there were other problems: A young accountant recently laid off by Coke, Matthew Whitley, had lashed out with allegations that Coke had committed fraud in consumer tests for a new frozen Coke drink at Burger King. According to Whitley, the company had hired thousands of young people to buy the drink, skewing results. Eventually Coke admitted the scheme, settling for $21 million. In separate proceedings, Coke’s practice of “channel stuffing”—selling more syrup to bottlers than they could sell in order to pump up Coke’s growth targets—finally caught up with it when the Securities and Exchange Commission opened a case against the company, eventually finding that the company had made “false and misleading statements,” though Coke paid no fine.

Far from Coke’s glory days in the 1990s, the picture was one of a company willing to do anything, legal or illegal, to sell more soft drinks. Nothing made the company look so bad, however, as its insensitivity on childhood obesity. In one 2003 poll in California, 92 percent of respondents declared obesity a serious problem; 65 percent blamed food and beverage company advertising as an important contributor; and 66 percent felt the best solution was tougher regulation in schools. At the soft drink industry’s year-end meeting, CEO Douglas Daft directly acknowledged the issue, calling obesity the biggest challenge the industry had faced in fifty years. Giving cheer to his fellow executives, however, he assured them “a simplistic piece of government regulation will not solve the problem,” an idea he brushed off as “absurd and outrageous.” But that was exactly what activists were now gearing up to do.

 

 

 

The first anti-soda bill
was submitted by longtime health advocate and state senator Deborah Ortiz in California in 2002, shortly after Jackie Domac’s health class booted Coke out of Venice schools. If passed, it would categorically ban all soda in schools K-12. Immediately, Coke’s lobby machine descended upon Sacramento. According to Domac, legislators would slip out the back door while she and her colleagues were waiting to meet them, later emerging in the hall talking with a Coke lobbyist. At the same time, a host of industry-paid experts testified against the bill on nutritional grounds (including one nutritionist representing CCF who did not disclose his affiliation). In the end, the bill passed, but only after being watered down to apply solely to elementary and middle schools, exempting high schools. That effectively gutted the bill, since most soda in California was sold just in high schools anyway.