The Coke Machine (7 page)

Despite that bait-and-switch from a beautiful girl’s smile to a mouthful of sugary refreshment, Dobbs was hailed as head of a movement for “Truth in Advertising,” a crusade for “clean, truthful, honest publicity.” As president of the Associated Advertising Clubs of America, he distanced the drink from the frauds of patent-medicine makers, saying the company was “claiming nothing for Coca-Cola that it did not do, no virtue that it did not have.” And yet the company was pouring out astronomical sums to “truthfully” and “honestly” shape Coke’s image.

By 1908, the company’s ad budget topped half a million dollars a year. That number grew to more than $750,000 in 1909, the same year the Associated Advertising Clubs of America lauded Coca-Cola as the “best advertised article in America.” Four years later, in 1913, the company spent $1.4 million to churn out a mind-numbing take of logo-stamped junk, including 5 million lithographed metal signs, 2 million soda fountain trays, 1 million Japanese fans, 1 million calendars, 10 million matchbooks, 50 million paper “doilies,” 20 million blotters, and 25 million baseball scorecards—all in just one year.

Given these efforts, it was a surprise in 1918 when Coke’s sales declined for the first time in the company’s history, dropping from 12 million to 10 million. The problem wasn’t in demand, but supply. As the United States prepared to enter World War I in 1917, and access to international supplies of sugar would be cut off, Dobbs and Harold Hirsch made frequent trips to Washington to argue against a quota. Their pleas fell on deaf ears, however, when the country’s Food Administrator, Herbert Hoover, limited syrup producers to half their former amounts. Publicly, Coke took the defeat in stride, describing in an advertisement called “Making a Soldier of Sugar” how it selflessly cut production rather than water down the beverage. As Coke historian Frederick Allen writes in his book
Secret Formula
, the episode would establish Coke’s way of handing setbacks: “Lobby furiously behind the scenes, give in gracefully when the cause is lost, and be sure to associate the product with the highest national interest.”

At the same time, the company must have taken note of the success of other companies, such as Procter & Gamble, whose Ivory soap appeared in every soldier’s mess kit, boasting in its own ads how it offered “the very joy of living to Our Boys when they are relieved from the front lines for rest, recreation, clean clothes, and a bath.” What if, in addition to those other fine things, the Boys could be relieved with a Coke? The man who answered that question would transform Coke from a national beverage into an international phenomenon.

 

 

 

After the lawsuits
and sugar rationing, the post-World War I Coke finally got on a roll, much of that because of the leadership of a new boss: Robert Woodruff—known as “The Boss” for the fifty-some years he effectively ran the company. The son of that cranky banker Ernest Woodruff, Robert Woodruff stands like a giant over the twentieth-century history of Coke, leading the company on an epic quest for expansion.

A lackluster student who was forever failing the test for his father’s affections, he dropped out of Emory after just two years to work as a manual laborer, and then salesman at a truck company, White Motor Works. As bad as he was as a student, Woodruff proved to be a born salesman, encouraging an easy liking from clients and a reflexive loyalty from subordinates. By 1922, he was first vice president of the White Motor Works and a member of the board. Watching from afar, Ernest Woodruff both resented and admired his son’s success. After canning Sam Dobbs, and knowing Howard Candler was not suited to be president forever, Ernest decided he’d rather see his son succeed him than succeed without him, and tapped him to be president of the Coca-Cola Company that year.

Whatever the elder Woodruff’s motives, he made the right choice, at least as far as the company was concerned. By the 1920s, Coke had established itself as
the
national brand of soft drink, with a monopoly that few companies could ever hope for. As it became more and more a part of the landscape, lifestyle started imitating advertising: Films began incorporating the drink into scenes, music started spontaneously referring to it in lyrics.

The 1920s was also the decade advertising came into its own. As Europe cleaned up the wreckage from World War I, a newly confident American marketing machine churned countless new products off the assembly lines. “The chief economic problem today,” wrote ad executive Stanley Resor at the time, “is no longer the production of goods but their distribution. The shadow of overproduction . . . is the chief menace of the present industrial system.” To sell all of the new radios, telephones, and refrigerators, advertising increasingly seemed a necessary part of the industrial process. A new generation of ads took the psychological techniques of “atmosphere advertising” and ran with them to exploit the unconscious needs of consumers, probing for consumers’ soft spots to promise the health, happiness, comfort, or love that a product would bring—or conjuring the anxieties of
not
owning a product, creating new afflictions such as “halitosis” and body odor, and then providing their solutions in Listerine and Lifebuoy soap.

Coke retained its positive outlook—and why shouldn’t it? Coke was tailor-made for the Jazz Age, the first American generation of young people to rebel against their parents in a fast-moving culture of jitterbug and gin. As the Roaring Twenties roared in, D’Arcy’s Coca-Cola girls strutted their stuff in flapper dresses and bathing suits, always with a beading bottle or glass at the ready. A brief attempt to increase rural sales with homey images of farms and storefronts was a flop—sales pointed upward only when the ads featured the young and rich.

 

 

 

Even so
, Coke hadn’t even begun to saturate its potential market. Robert Woodruff immediately set out to increase the company’s profits and its share price with one word in mind—growth. If consumption of Coke increased just a few drinks per person per month, the company calculated, it would translate into millions in profits. The key to that, he reasoned, was making sure that people had access to a bottle of Coke whenever the urge to drink one struck them. It was Robert Woodruff’s sales chief Harrison Jones, a six-foot-two gregarious redhead, who first coined the phrase of putting Coke everywhere “within an arm’s reach of desire.” Woodruff liked the phrase and repeated it so much that he adopted it as his own.

In order to further make that vision a reality, he enlisted a new ally with a gift for stoking that desire. Archie Lee started out as a newspaper reporter in North Carolina—but his ambition led him to advertising. “A man who can see life in its true colors and describe it in words can gain fortune and fame,” he wrote his parents in 1917. Joining the D’Arcy Agency, Lee worked hard to distinguish himself. Soon he was virtually writing the entire Coca-Cola campaign by himself.

By the time Lee took over in the 1920s, Coke was taking advantage of new four-color printing techniques to run increasingly lavish advertisements painted by some of the best artists of the day—Hayden Hayden, Haddon Sundblom, N. C. Wyeth, and Norman Rockwell. Before Lee, the company had never been big on slogans. He not only started to introduce them, but also came up with some of the most memorable slogans of the twentieth century. Unlike the increasingly hard-sell and negative advertising of the day, Coke stood apart as a small pleasure as simple as it was inevitable. Beginning in 1923, Lee started rolling out a new slogan every few months, all of them intentionally restrained—“Enjoy Thirst,” “Always Delightful,” and “It Had to Be Good to Get Where It Is.”

The biggest breakthrough, however, came on July 27, 1929, when Lee coined the simple slogan “The Pause That Refreshes.” The idea that Coke could be a momentary time-out captured the public imagination in the frenetic 1920s, when a booming economy and the new environment of fast-paced city life, motion pictures, and jazz were overwhelming the senses. Unlike Coke’s initial pitch to soothe jangled nerves a generation before, the slogan promised that relief could come not through a secret formula of medicinal herbs but just through the simple momentary pleasure of drinking a cold beverage in the midst of a busy day.

 

 

 

Coke’s ad slogans
might have used the soft sell, but behind the scenes, its selling tactics were anything but subtle. In his quest to put Coke “within an arm’s reach of desire,” Woodruff created a Statistical Department to analyze highway car traffic and supermarket foot traffic to determine the most effective placement for ads. The department’s research also identified a new market, home consumption, and created new cardboard “six-boxes” for housewives to take bottles home.

Meanwhile, the legions of Coke Men unleashed upon retailers around the country were told not to accept no for an answer. “Salesmen should keep calling unremittingly on their prospects,” wrote sales chief Harrison Jones. “Continual chewing will enable you to digest your food.” Ad exec William D’Arcy repeated the mantra: “No matter how many times you have talked to a dealer about Coca-Cola, there is always something new to say. Repetition convinces a man.” By 1928, Woodruff could boast, “We can count on our fingers the soda fountains that do not serve Coca-Cola.” Stock price increased along with sales, quadrupling from $40 to $160 in the decade since Ernest Woodruff’s syndicate first took over the company. As the bull market roared, the elder Woodruff made a fortune—$4 million—in Coke stock, while Robert stashed a cool million.

But even when the market crashed, Coke continued to grow. In many ways, the Great Depression was Coke’s finest hour yet, Archie Lee’s “pause that refreshes” offering a temporary respite from the grinding headlines of job losses and bread lines. Buddy might not have been able to spare a dime, but he could always spend a nickel on a Coke. Coke pushed the point with new ads exhorting “Don’t Wear a Tired Thirsty Face” and “Bounce Back to Normal.”

The Depression was a hard time for advertising, with a backlash against the lifestyle ads of the 1920s and a return to hard-sell ad copy. Coke barely blinked, churning out an even more scantily clad parade of bathing-suited Coca-Cola girls, and adding celebrity endorsements from Joan Crawford, Clark Gable, Jean Harlow, and other Hollywood stars. As far as Coke’s ads were concerned, there was no Depression; a better life was only the pop of a bottle cap away. In 1933, Woodruff blithely announced the company was putting an extra $1 million into its ad budget; during the period, it was one of the top twenty-five advertisers in the country.

Of all Coke’s ads, however, some of its most successful featured the opposite of Coke’s usual thin and beautiful people, showing instead a portly older gentleman with a white beard and furry red suit. Despite some claims, Coke didn’t create the image of Santa Claus we recognize today. Throughout the nineteenth century, writers and artists were gradually following the lead of Clement Clarke Moore’s 1822 poem “A Visit from St. Nicholas” in creating their picture of the gift-bestowing elf with “red garments . . . ruddy cheeks and nose, bushy eyebrows, and a jolly, paunchy effect,” as
The New York Times
wrote in 1927. But even though the Coca-Cola Company didn’t create the image, it did solidify St. Nick for generations of children when its ads of jolly Santa created by artist Haddon Sundblom became ubiquitous starting in the 1930s. More often than not, they featured a story line of children leaving a Coke in lieu of milk and cookies for Santa to pause and refresh himself on Christmas Eve, inspiring many children to adopt the practice as their own.

With its conquest even of Christmas, Coke became the darling of Wall Street. Profits of $14 million during the height of the Great Depression in 1934 more than doubled to $29 million by decade’s end. Woodruff took to calling the beverage “the essence of capitalism”; he fetishized Coca-Cola, insisting that the company sell one product and one product only. In order to keep alive its mystique, he dragged the secret formula out of a company vault in New York and personally transferred it by train to a safe-deposit box in the Trust Company bank in Atlanta—where it supposedly remains to this day. In his mind he’d hit upon the perfect product, one that could sell in any economic time, and—with the success of its “Thirst Knows No Season” ad campaign—any climate. “Robert Woodruff could still look out on an America that justified his bedrock faith in laissez-faire capitalism,” write J. C. Louis and Harvey Yazijian. “This faith informed his fundamental opposition to socialism, and later, to Franklin Delano Roosevelt.”

Roosevelt’s New Deal was, like the Progressive movement half a century earlier, a backlash against the greed of corporations, who were blamed by many for the crash. The government moved in to regulate the stock market and the banking industry, along with other businesses. Woodruff was, if anything, even more adamant than Asa Candler that he owed the government nothing. When Georgia began to tax stock held by residents in out-of-state corporations, he up and moved to Wilmington, Delaware, where Coke was incorporated, spending just over six months out of the year there to make it official.

And he had bigger plans as well. As Coke emerged unscathed from the Depression, its advertising constantly repeated two essential points: that it was available everywhere, and it was available for a nickel. But until now, Coke’s claims of ubiquity included only the United States. “The opening of foreign markets is a costly undertaking,” Woodruff wrote in the introductory letter to the 1928 Annual Report, laying out difficulties in distribution, trademark protection, and acceptance by foreign consumers. “Successful prosecution of this undertaking will require time, courage, and patience, as well as large expenditures.” Though Coke had made tentative inroads into countries including Mexico, Canada, England, and Germany, it wasn’t until the United States entered World War II in 1941 that it was able to expand its reach into more and more foreign markets. And as luck would have it, the American taxpayer footed the bill.