The Coke Machine (18 page)

But tucked amid these boxes is another whirring collection of machinery. Test tube-sized nipples of polyethylene terephthalate (PET) plastic are dumped into a giant centrifuge, where they are blown by compressed air into 20-ounce bottles. On an adjoining piece of equipment, the full bottles reappear, filled to the brim with water. They trundle naked down the assembly line to get sealed and slapped with their label: Dasani.

It’s here that Coke’s vaunted brand of bottled water is made, and where, by extension, the fortunes of the Coca-Cola Company were rescued. The actual process by which ordinary water is turned into Dasani is hidden inside a separate “water room,” which the plant manager describes as a bunch of twenty-foot stainless-steel tubes through which the water is shot at high pressure to be filtered. No amount of pleading will persuade the Coca-Cola Enterprises press agent giving the tour today to allow a peek inside. Like the secret formula for Coca-Cola hidden deep inside an Atlanta safe-deposit box, the process behind creating Dasani is equally shrouded in mystique. And no wonder, since Dasani’s brand image is even more important than Coca-Cola’s to sell the product.

In coming to dominate the bottled water market, Coke has had to pull a feat of behind-the-curtain wizardry every bit as impressive as turning Coca-Cola into a symbol of American pride and international goodwill a century earlier. Despite promising beginnings, however, Dasani has faced an even more damaging backlash, based not on individual health but on the health of the environment itself.

 

 

 

Even as
awareness of the obesity crisis was beginning to hit, threatening sales of Coke’s trademark carbonated sodas, the company was readying its Plan B. In the summer of 1998, CEO Doug Ivester began toying with selling the most basic of beverages—water. The company had watched from the wings as other companies had made a fortune on the beverage, which the French company Perrier had introduced in the United States in the late 1970s. The fad had taken off quickly, after Perrier’s marketers appealed to a new demographic of yuppies as conscious about their health as they were about the conspicuous consumption of paying top dollar for something others were getting for free. Perrier’s profits from water rose from $20 million in its first year to $60 million by its second.

Starting in 1984, another French company, Evian, pioneered the use of lightweight bottles made of a clear plastic called polyethylene terephthalate (PET) just as the fitness craze was taking off, making the pink-and-red logo ubiquitous at the gym. Perrier stumbled briefly in 1990 when the supposedly pristine water was found contaminated with trace amounts of benzene, leading to a $160 million recall and cutting sales in half overnight. But the industry quickly recovered, led by the Swiss company Nestlé, which swooped in to acquire Perrier, as well as dozens of other brands—Deer Park, Arrowhead, Calistoga, Poland Spring—that were left from America’s first flirtation with bottled water at the turn of the last century. Between 1990 and 1999, bottled water sales shot up from $115 million a year to more than $5 billion.

With profit margins on water as high as 50 cents on a $1.50 bottle, Coke and Pepsi couldn’t resist entering a market that had been dominated by foreign companies. Instead of selling natural spring water, however, the cola giants didn’t see why they couldn’t just take the same water flowing through their bottling plants and package
that
. Pepsi was first, shooting its purified water into a blue bottle with a squiggle evocative of snow-covered mountains.
Voilà
, Aquafina.

Coke could have gone the same route, licensing a new brand to its bottlers. But the Coca-Cola Company had always sold syrup, and there was no syrup that you could use to create water. Ivester stewed for the better part of 1998 before he hit upon the solution. Coke scientists would formulate a proprietary mix of minerals that it would ship to bottlers to put in their purified tap water. This was its
new
secret formula, which it could market as every bit as unique as Coke’s own. After much focus-grouping, Coke created the perfect pan-national combination of syllables for its new beverage. Intended to signal relaxation and refreshment, the name Dasani could just as well be that of an Italian winemaker or an African tribe.

Dasani actually wasn’t Coke’s first entry into bottled water; it had bought Belmont Springs in the 1980s and Mendota Springs in the 1990s, both times suffering lackluster sales. But that was when water was a mere side venture to the runaway growth in sugary soda. Now water itself was the growth market. Coke put the full weight of its advertising power behind a new $20 million campaign intended to both sell the product and grow the market itself.

Coke targeted women, who consumer surveys showed were more focused on healthy living (and not coincidentally, more concerned with their kids’ drinking so much soda). In the same way that “The Pause That Refreshes” had addressed the anxieties of workers suffering from grueling production schedules, Coke played on the stresses of women struggling to balance the demands of the workplace and their responsibilities to home and family with new slogans such as “Life Simplified” and “Replenish the Source Within.” In 2002, Coke teamed up with
Glamour
magazine to give away an all-expenses-paid weekend in New York to the woman who wrote the best one hundred words about “Women at Their Best.” Applicants were “encouraged to list the ways in which they pamper themselves, thereby replenishing their own spirit everyday” (no doubt scoring extra points if they replenished themselves with Dasani).

The marketing worked—by 2003, bottled water was the one bright spot in a disastrous year for Coke. Bottled water sales were up to $8.5 billion overall—and Dasani had passed Perrier, Evian, and San Pellegrino to become the second-best-selling brand behind Pepsi’s Aquafina. And Coke had yet to go international with Dasani—the arena where it always out-fought Pepsi. As the company planned to launch Dasani across the Atlantic, it seemed there might actually be life after soda pop after all.

 

 

 

For its
big overseas splash, Coke followed the same playbook it had for its soft drinks a century earlier, tackling the English-speaking world first. The launch for the United Kingdom was planned for March 2004, with drives the following month into Belgium and then France, the ultimate prize. The average French person drank more than twice what an American drank in bottled water, some 145 liters a year. Cracking
that
market would be a sweet victory for the company. Just a couple of decades after France had introduced bottled water to the United States, America would be returning the favor under the banner of the quintessential American brand. For the UK, Coke spared no expense, pouring £7 million ($13 million) into advertising, trumpeting the slogan “The more you live, the more you need Dasani.” For weeks, billboards around London declared, “Prepare to get wet,” and just before the launch, high-divers plummeted ninety feet with flaming capes into tanks of water to draw attention to the brand.

No amount of theatrics, however, could prepare Coke for what happened next. Just weeks after the launch, a British newspaper broke the story that Coke’s “pure” water was actually bottled in the southeast London suburb of Sidcup, which got its water from the River Thames. It was the equivalent of discovering that bottled water served in New York came from the Hudson. Immediately, Coke came under fire from the Food Standards Agency (FSA), the British version of the FDA, for the improper use of the word “pure.”

Of course, Dasani wasn’t exactly tap water. While Coke might not let prying eyes into one of its water rooms, it touts a multistep scouring to turn pedestrian water into the final product. First, there is “ultrafiltration” to remove particles, followed by a carbon filter to remove odors, and a zap of ultraviolent light to kill bacteria. Most important, it passes through a reverse-osmosis filter—a technique, Coke told the skeptical British public, “perfected by NASA to purify fluids on spacecraft” to remove 90 percent of anything still remaining. Only then does Coke add back in its mineral mix, as the company has oxymoronically explained, to “enhance the pure taste.” Finally, the water is given a dose of ozone to get rid of hard-to-kill parasites such as giardia and cryptosporidium. The result, Coke claimed, was “as pure as water gets.”

Despite such assurances, the launch was a disaster. Soon, Dasani was being handed out for free in train stations and supermarkets in a desperate attempt to win customers. But the death blow was what happened next: Two weeks after the Sidcup jokes started, consumers stopped laughing when Coke tersely announced it was voluntarily recalling half a million bottles of Dasani. The water, it explained, had been contaminated with levels of the carcinogen bromate at 22 parts per billion, twice the amount allowed by the FSA (or FDA).

In the ultimate irony, then, Coke’s water was not only no more pure than London tap, but also more dangerous to drink. Quickly, Thames Water declared
its
water safe. Soon it became apparent the contamination hadn’t come from the pipes, but rather from a by-product of ozonation, one of the very methods Coke boasted of to “purify” its water. In a statement, Coke all but blamed the British government, saying that it was legally required to add calcium chloride into the water in the UK. The high level of bromide in calcium chloride, it continued, led to the formation of bromate when exposed to ozone.

That explanation might have held more water if the tendency to create bromate through ozonation wasn’t already well known in the industry. Just two years before, the FDA had warned manufacturers to use care in ozonation and test finished products for the presence of the chemical. An industry trade publication at the time went so far as to provide a formula for how much bromate can be formed given the amount of bromide in the source water. As a result of the warnings, Nestlé stopped using ozonation for Perrier in June 2001, even as Coke and Pepsi continued the process.

Whether through carelessness or arrogance, Coke had turned a public relations hiccup into a disaster, as Britons now vocalized their anger at the American company. “Should I Really Despise Coca-Cola?” read a typical headline, and there were plays on Coke’s own branding, such as “Things Get Worse with Coke” and “Dasani: It’s a Real Disaster.” In the face of such criticism, Coke declared an end to its European conquest, swallowing a cost of more than $45 million and giving up dreams of converting the French.

For the Europeans, it was the perfect opportunity to stick it in America’s eye during a time when the continent was chafing under George W. Bush’s invasion of Iraq and anti-American sentiment was at an all-time high. Any Coke exec tempted to write off the fiasco as the cranky proclivities of another continent, however, was due for a rude awakening back on American shores.

 

 

 

It’s a blustery spring day
in Cambridge, Massachusetts, where sets of four blue Dixie cups are arranged on a folding table in the middle of a city square. Three of the cups contain bottled water from the country’s most popular brands—Dasani, Aquafina, and Nestlé’s Poland Spring. The fourth cup is full of tap water from a café up the street. One by one, passersby stop by to sample them and guess which is which. If you think it’d be easy to tell the difference between the bottled water and the tap, you’d be wrong. The success rate of folks is only slightly better than random. Typical is Joe Marsden, a Cambridge resident, who stares in sullen disbelief at the table after identifying tap water as Dasani. “I thought I would have at least gotten Dasani or Aquafina right because I drink them the most,” he says. “I couldn’t tell the difference at all.”

Dubbed the “Tap Water Challenge,” the update of the Pepsi Challenge is run nationally by young activists belonging to the group Corporate Accountability International (CAI), which has made bottled water the latest front in what it sees as the excesses of corporate power. Like anti-soda lawyer Dick Daynard, CAI cut its teeth in the fight against Big Tobacco in the 1990s, when it waged a boycott against Kraft, parent company of Philip Morris. However, the group dates back to two decades before, when it was originally founded as the Infant Formula Action Coalition (INFACT) to attack Nestlé for its promotion of baby formula over breast milk overseas. After a bitterly fought campaign, Nestlé eventually agreed to stop pushing its formula in 1984. Now, twenty years later, Nestlé was profiting off another product that the activists thought should be distributed for free, as one of the four largest bottled water producers along with European giant Danone (parent company of Evian), PepsiCo, and Coca-Cola.

If it seems a stretch to brand soft drinks as the next tobacco, then bottled water seems an even more unlikely villain. Here’s a product with no harmful tar or sugar, no addictive nicotine or caffeine. Yet CAI was affronted by the way in which the bottled water corporations were taking over local water supplies, often paying next to nothing for the privilege. In Nestlé’s case, the company was tapping underground aquifers around the United States, as citizens from Maine to California and Michigan to Texas complained about dried-up streams and dropping water levels around their plants. But at least Nestlé could legitimately call its “spring water” a unique beverage. Coke and Pepsi were bottling municipal tap water, passing ostensibly clean water through additional purification processes, and then selling it for a huge markup. Meanwhile, Coke’s huge advertising campaign touting Dasani’s “purity” further undermined public confidence in tap water, they argued, leading to more bottled water sales and less investment in public infrastructure.

By the time CAI began sounding the alarm in 2004, consumers were spending some $9 billion annually on bottled water in the United States, consuming an average of twenty-three gallons of the stuff per person (those numbers have since risen to $11 billion and twenty-nine gallons). Each year, sales increased by almost 10 percent—reminiscent of Goizueta-era Coke before the backlash over obesity began. In fact, as soft drinks started to decline in sales for the first time, Coke increasingly promoted water as a healthy alternative, spending tens of millions of dollars to rebrand itself as a “hydration” company, and replacing Coke signs with Dasani signs on the sides of vending machines. All of those marketing messages sunk in; a Gallup poll at the time found three in four Americans drank bottled water, and one in five drank
only
bottled water.