Coca Cola - The flavor of capitalism

14 November, 2011

The multi-national giant Coca Cola Company, its brands, manufacturing and marketing strategies mirror the reality of capitalism. This post is an attempt of fact finding mission of Coca Cola and its background with some insight on its sister brand Fanta. Its not just another brand and company but a multi-national giant that influence politics and culture of people all over the world.

Origin of Coca Cola
Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century.

Use of stimulants in formula
When launched Coca-Cola's two key ingredients were cocaine (benzoylmethyl ecgonine) and caffeine. The cocaine was derived from the coca leaf and the caffeine from kola nut, leading to the name Coca-Cola (the "K" in Kola was replaced with a "C" for marketing purposes).

Coca — Cocaine
In the United States, Stepan Company is the only manufacturing plant authorized by the Federal Government to import and process the coca plant, which it obtains mainly from Peru and, to a lesser extent, Bolivia. Besides producing the coca flavoring agent for Coca-Cola, Stepan Company extracts cocaine from the coca leaves.

Kola nuts — Caffeine
Kola nuts act as a flavoring and the source of caffeine in Coca-Cola. In Britain, for example, the ingredient label states "Flavourings (Including Caffeine)." Kola nuts contain about 2 percent to 3.5 percent caffeine, are of bitter flavor and are commonly used in cola soft drinks. In 1911, the U.S. government initiated United States v. Forty Barrels and Twenty Kegs of Coca-Cola, hoping to force Coca-Cola to remove caffeine from its formula. The case was decided in favor of Coca-Cola. Subsequently, in 1912 the U.S. Pure Food and Drug Act was amended, adding caffeine to the list of "habit-forming" and "deleterious" substances which must be listed on a product's label.

The Production model
The actual production and distribution of Coca-Cola follows a franchising model. The Coca Cola Company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with water and sweeteners.

The killer –cola
Panamerican Beverages (Panamco), Coca-Cola's main bottler in Latin America, has been criticized for its relationship with unions. In Colombia, it has been alleged that the bottling company hired paramilitary mercenaries to assassinate union leaders. These charges have resulted in several court cases and boycott actions against The Coca-Cola Company.

Coca-Cola's operations in India have come under intense scrutiny as many communities are experiencing severe water shortages as well as contaminated groundwater and soil that some assert are a result of Coca-Cola's bottling operations. A massive movement has emerged across India to hold the Coca-Cola Company accountable for its actions. The state of Kerala imposed a ban of colas from the state only to be quashed by Coca Cola.

The failed shareholder resolution attempt (2002)
In 2002, Christian Brothers Investment Services, Inc. submitted, along with other co-filers, a shareholder resolution that called for Coca-Cola to adopt a code of conduct on bottling practices and employee relations. Problems in Colombia were cited, but the proposal called for "clear standards for its suppliers, vendors and bottlers." The resolution received support from Coca-Cola unions in Colombia, Guatemala, Zimbabwe, the Philippines, and the United States.

However, Coca Cola's board of directors recommended rejecting the proposal, noting in the proxy: "We believe that the Company's existing policies address substantially all of the concerns raised in this proposal and that the proposal is therefore unnecessary...

Facts behind Fanta
Origin of Fanta
Fanta has its origins in Germany, when a trading ban was placed on that nation by the Allies during World War II. The Coca-Cola company therefore was not able to import the syrup needed to produce Coca-Cola in Germany.As a result, Max Keith, the man in charge of Coca-Cola's operations in Germany during the second World War, decided to create a new product for the German market created using only ingredients available in Germany at the time, including whey and pomace – the "leftovers of leftovers", as Keith later recalled

Ingredients of Fanta
The composition of Fanta, for the same flavor, varies from country to country. For example, the European Fanta Orange contains orange juice (in varying percentages but typically 6%), whereas the US formulation does not. The Australian version is 2.1% fruit juice. These differences mean the taste and quality of Fanta differs greatly from country to country, more so than Coca Cola.

Fanta ‘Orange’ formulation for United States:
Carbonated water, high fructose corn syrup, citric acid, sodium benzoate, modified food starch, natural and artificial flavors, sucrose acetate isobutyrate, sodium polyphosphates, coconut oil, yellow 6, brominated vegetable oil, red 40, dioctyl sodium sulfosuccinate.

Fanta advertising strategy in the West
Fanta is known for its upbeat advertising; in the United States, it showcases The Fantanas, a casted group of female spokesmodels each of which promotes an individual Fanta flavour.

Now watch this....

- Killer Coke
- WIKI Page for Fanta
- WIKI page of Coca Cola
- Criticism of Coca Cola WIKI page

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Anonymous said...

Well, I have heard that FANTA stands for "For Arabs Not Taking Alcohol".


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