Coca-Cola’s position atop the branding world hasn’t come easily, and its future there isn’t guaranteed. In 2013, Coca-Cola slipped to third place behind Apple and Google on Interbrand’s list of best global brands.
In recent years sugary drinks have been identified as culprits in the fight against obesity. Now being the number one soda brand in the world carries with it the risk of also being labeled as public enemy number one in the fight against obesity, particularly in America. How can a company that relies on sales of sugary drinks that lead to obesity, diabetes and tooth decay make a compelling case that it also cares deeply about the health of consumers?
Elon University student and PRSSA President Heather Harder won the 2014 Arthur W. Page Society case study competition with her analysis of how Coca-Cola has managed its precarious position. She summarized the company’s strategy as one of corporate social responsibility. “By acknowledging the obesity issue and spending millions of dollars on anti-obesity efforts, Coca-Cola is demonstrating corporate social responsibility—if not in its products, then at least in its community involvement.”
In late 2012 and early 2013, Coca-Cola launched a campaign called “Coming Together” that included a theme that “all calories count.” The theme emphasized logic that consumers should balance the number of calories taken in with the number of calories they burn, and that calories from Coke products are essentially the same as calories from any other source. Coca-Cola used a variety of tactics to support the theme including:
- videos aired on mainstream media (CNN, Fox, MSNBC)
- a crowdsourced effort that invited consumers to email email@example.com with personal stories
- online video via http://www.coca-colacompany.com/coming-together/
- the announcement of several “commitments to fighting obesity” including
- offering low- or no-calorie options in every market
- more prominently displaying calorie information on product labels
- funding physical activity programs worldwide
- adopting more responsible marketing practices that avoid targeting children under the age of 12.
Coca Cola has begun offering more low-calorie options including Coca Cola Life, which is made with stevia, a plant-based sugar substitute. To which publics is Coca-Cola loyal in this marketing effort?
The PRSA Code of Ethics features loyalty as a core value. “We are faithful to those we represent, while honoring our obligation to serve the public interest.” In this case, those working in public relations for Coca-Cola must balance their loyalty to their employer with their loyalty to many publics with varying interests.
According to Harder, “The challenge is for Coca-Cola to find a way to be taken seriously as a player in anti-obesity efforts while simultaneously increasing sales and offering consumers the products they love.” Harder’s conclusion highlights the importance of relationships with several key publics in defining the success of the CSR efforts.
Critics and activists
Perhaps the most vocal opposition in this case is the Center for Science in the Public Interest (CSPI), a nonprofit organization that seeks “to educate the public, advocate government policies that are consistent with scientific evidence on health and environmental issues, and counter industry’s powerful influence on public opinion and public policies.” The essence of CSPI’s criticism was captured in the brevity of a single tweet on May 8, 2013. “Coca-Cola is desperately trying to disassociate itself with #obesity. Too bad the core product causes it.”
The Center for Science in the Public Interest (CSPI) sent this tweet in May of 2013. How can Coca-Cola balance loyalty to its shareholders and employees with loyalty to the consumers represented by organizations like CSPI?
Let’s face it. People don’t drink Coke for their health these days. If you work for Coca-Cola, you can be loyal to your consumers in a lot of ways with a lot of different products, but it would be a stretch to imply that your signature cola equates to healthier food options. That said, research shows that consumers pay attention to CSR. In 2013, Nielsen surveyed 29,000 Internet respondents from around the world. Half of them said they would be willing to pay more for goods and services from socially responsible companies, and 43% reported that they actually have paid more.
To preserve excellent investor relations with its thousands of shareholders around the world, Coca Cola must maintain a profitable business model. Can you imagine what it would mean to shareholders—and even entire economies—if Coca-Cola just stopped selling soda because the product was unhealthy? The golden mean is an ethical principle in Aristotelian, Buddhist, and Confucius philosophies, which holds that the most ethical course of action lies between extremes. A golden CSR strategy for Coca-Cola undoubtedly lies somewhere between shuttering its flagship product line to allay the concerns of its critics and ignoring its critics altogether with an uninhibited drive for profit. In fact, CSR may help with profitability, as is evident in research suggesting a link between charitable giving and corporate revenues.
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CECP is a coalition of CEOs who believe that societal improvement is an essential measure of business performance. In 2014, they released this infographic highlighting trends in corporate societal engagement. Is there a causal relationship between corporate giving and increased revenue? Why or why not?
Relationships with employees are an important part of the equation linking social responsibility with profitability. It is not hard to imagine how companies with satisfied, committed, trusting and empowered employees (i.e., excellent relational outcomes) are more likely to profit in business. CSR trends include programs that encourage employees to participate in service such as pro bono work or paid release time to volunteer in their communities.
Legislative relations also come into play, and Coca-Cola invests strategically in its own advocacy. The company lists corporate taxation, environmental policy and product-specific policies including taxes and regulation as areas for investment. Product-specific policy was made more salient in 2012 when former New York Mayor Michael Bloomberg proposed a ban on the sale of sugary drinks larger than 16 ounces. In its relationship with regulators and legislators, Coca-Cola “advocates for choice and opposes discriminatory tax policies that single out certain beverages.”
Tom Kelleher on ethics and Public Relations
“Interbrand-Best Global Brands,” Interbrand, accessed July 25, 2014, http://www.interbrand.com/it/best-global-brands/2013/Coca-Cola.
“Are All Calories Created Equal?” Arthur W. Page Society, accessed July 25, 2014, http://www.awpagesociety.com/wp-content/uploads/2014/03/Coca-Cola_CaseStudy.pdf.
“Coca-Cola’s Global Commitments to Help Fight Obesity,” The Coca-Cola Company, accessed July 25, 2014, http://www.coca-colacompany.com/coming-together/infographic-illustrating-coca-colas-global-commitments-to-help-fight-obesity.
“About CSPI,” Center for Science in the Public Interest, accessed July 25, 2014, http://www.cspinet.org/about/index.html.
CSPI, May 8, 2013 (12:55 p.m.), commented on Twitter, “Coca-Cola is Desperately Trying…,” https://twitter.com/CSPI/status/332222216836087808.
“Nielsen: 50% of Global Consumers Surveyed Willing to Pay More for Goods, From Socially Responsible Companies, Up From 2011,” Nielsen, accessed July 25, 2014, http://www.nielsen.com/content/corporate/us/en/press-room/2013/nielsen-50-percent-of-global-consumers-surveyed-willing-to-pay-more-fo.html.
“New Study Shows Strong CSR Boosts Profits,” Bulldog Reporter, accessed July 25, 2014, http://www.bulldogreporter.com/dailydog/article/pr-biz-update/new-study-shows-strong-csr-boosts-profits-majority-of-companies-incre.
“Public Policy Engagement,” The Coca-Cola Company, accessed July 25, 2014, http://www.coca-colacompany.com/investors/public-policy-engagement.