Andy Morton

In the Spotlight - The Coca-Cola Co's Global Anti-Obesity Pledge

By | 10 May 2013

Coca-Cola said it will stop aiming advertising at under-12s

Coca-Cola said it will stop aiming advertising at under-12s

It made for some good headlines: 'Coke to ditch ads aimed at kids'; 'Soft drinks giant promises calorie counts on all products'.

But behind the media spotlight, The Coca-Cola Co's “global commitments” pledge, made in a blaze of publicity on Wednesday (8 May), was simply a continuation of a PR plan first unveiled at the beginning of the year. January's anti-obesity ad was the signal that Coca-Cola was no longer content to sit back and take the blame for rising levels of obesity, particularly in developed countries. That desire to lead the agenda instead of merely reacting to attacks from its critics on health was on show in yesterday's pledge.

“We believe we have a role to play in helping solve one of the most important and complex societal issues of our time - obesity,” Coca-Cola CEO & chairman Muhtar Kent said. “It’s in our DNA, really, as a system that’s always tried to make a lasting positive difference in the communities we serve.”

This offensive position was quickly picked up by commentators.

The Times buisness editor Ian King called the pledge “a clear attempt to head off a possible regulatory assault”, while Bernstein analyst Ali Dibadj told the Financial Times: “They need to take this head-on given all the pressure they’re facing, certainly from a regulatory perspective and without a doubt from the consumer perspective.”

Dibadj said Coca-Cola is worried about a global crackdown on sugary drinks. “If they get painted with this bad-guy brush, I’m not convinced they have the support of the local communities and the local governments that they really need for all the local distribution, manufacturing and buy-in to grow the business.”

For some, the biggest of Coca-Cola's four commitments was the pledge to offer no- and low-calorie drinks in all of its 200-plus markets. Was the company responding to accusations it was attempting to ramp up sales of its high-sugar CSDs in developing nations to make up for shortfalls elsewhere? For example, Kent said yesterday that, while 41% of Coca-Cola's products in the US are low- or no-calorie, in China that percentage is in the single-digits.

“People in these countries are going to be aware of these health issues so Coke wants to be prepared,” Edward Jones & Co analyst Jack Russo told Bloomberg. “The regulators and governments are going to get more involved with this entire issue.”

Tiffany Hsu in the LA Times, however, refused to believe the pledge was anything new. She said that Coca-Cola vowed back in 2009 to start labelling its packages with calorie details.

Independent columnist Amol Rajan went further, branding the pledge a collection of “witless pieties” and pointing out that Coca-Cola “first promised to stop marketing to children in 2007”.

“Coke doesn’t exist to cleanse our livers,” Rajan said. “It is a massive corporation that exists to make huge profits.”

There is, of course, the feeling that there is nothing exactly groundbreaking in Coca-Cola's decision to focus on lower-calorie beverages. After all, the category, especially in developed nations, appears to be falling out of favour with consumers because of concerns over health. According to the UK's National Obesity Forum, quoted in the Guardian on Wednesday, at the (Coca-Cola-sponsored) London Olympics, Diet Coke, Coke Zero and water accounted for 73% of the company's sales, with full-sugar Coke only making up 23%.

Coca-Cola's pledge this week may have been an attempt to wrest control of the obesity issue away from its critics. But, as usual, it is taking its cue from its consumers.

Expert analysis

Soda Production in the US - Industry Market Research Report

Fizzling out: Soda producers will refresh product lines to slow falling demand

Sectors: Corporate social responsibility (CSR), Emerging markets – BRIC, Marketing – advertising & promotions, Soft drinks

Companies: Coca-Cola Co, Coke

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