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Sharing Secrets

September 22, 2011
 

 

The Coca-Cola Formula — that is, the recipe for the world’s No. 1 soft drink — is considered to be among the most closely guarded secrets in the world. Legend has it that only a handful of top Coke executives actually have access to the recipe, and they’re sworn to keep it a secret.
 
Whether that’s actually true is a mystery in itself, as the whole secret recipe thing might just be a marketing ploy designed to add some legend to Coca-Cola’s leading product. But while there’s debate over the recipe, there is no question that the folks at Coca-Cola (and for that matter, its soft drink rival PepsiCo) remain highly guarded about their business practices.
 
In an effort to shed light on the secretive soda industry, the National Policy and Legal Analysis Network to Prevent Childhood Obesity (NPLAN), a program of the nonprofit Public Health Law and Policy (PHLP), have unveiled Breaking Down the Chain: A Guide to the Soft Drink Industry. 
 
The new report provides a detailed understanding of how soda companies function, providing the reader with an outline of how products are produced, distributed and marketed. Researchers also studied how the industry has responded to push back from policymakers and the health community, including efforts to tax sugar-sweetened beverages (SSBs).
 
“Our goal was to help advocates better understand the industry they’re trying to regulate, whether they’re interested in taxes or other approaches,” says PreventObesity.net Leader Christine Fry, who oversaw the report for PHLP. “The report pulls together a lot of information about how the soft drink industry works, including material from industry databases that isn’t generally available to the public.”
 
Breaking Down the Chain is based on a similar report produced by researchers over a decade ago looking at the inner workings of the tobacco industry. Advocates at the time found it to be helpful in their efforts to curb smoking, and thus PHLP decided to produce a similar report for the soda industry. 
 
Rutgers Business School Professor Jerome Williams and his team interviewed health advocates to gather their questions about the industry, and then went about trying to answer them. Along with reading industry reports, the researchers chatted with people who had worked or were planning to work in the industry, although they didn’t have any luck convincing anyone currently employed in the industry to talk.
 
Not surprisingly, they discovered that soda production is a well-oiled machine, and one that creates billions of dollars in profits each year. Syrup producers create the product, bottlers package it and distributors deliver it. Meanwhile, marketers work hard to ensure Americans continue to buy the products, spending billions of dollars each year in a variety of advertising venues, including ads targeting children, teens and minority groups.
 
Of course, that’s probably not surprising to those in the childhood obesity movement. Advocates have for years been saying that marketing is one of the causes of the epidemic, leading to efforts to curb it.
 
What is interesting is the report shows the beverage industry is positioning itself to make money beyond that famous Coca-Cola Formula. The major players have diversified their product lines, offering consumers several different types of soda, bottled water, energy drinks, juice drinks and sports drinks. Just looking at the list of what the big-name companies own is mind-blowing — did you know Coca-Cola owns Caribou Ice Coffee? Or that PepsiCo owns SoBe?
 
Still, soda continues to be king, and the industry is doing everything it can to protect it. Breaking Down the Chain shows that soda manufacturers have thus far been effective in their efforts to stop taxes on sugar-sweetened beverages. Meanwhile, a new report funded by the industry argues that recent efforts to curb the marketing of sugary beverages to children could lead to job losses.
 
For his part, Williams called that assessment flawed, noting the industry would likely just shift their ad dollars to push other products.
In any case, researchers hope Breaking Down the Chain will be of use to advocates and policymakers working on health issues related to SSBs. “We hope the report will spark conversations and ideas about how they can intervene,” Fry says.
Junk Food Issue- Sugary Drinks