Coke wants the protest kids to drink Coke

Doug Henwood dhenwood at
Tue Aug 1 12:13:43 PDT 2000

Financial Times - August 1, 2000

Douglas Daft: Global chief thinks locally By Richard Tomkins

The anti-globalisation movement has gathered a fair rag-bag of supporters in the past year or two. Now meet the latest recruit: Douglas Daft, the new chairman and chief executive of Coca-Cola.

"Think local, act local" has become the catchphrase of the man tasked with turning the company around after one of the worst years in its history.

Mr Daft is the first to acknowledge the paradox. "There's no one more global in terms of ubiquity than we are," he said in an interview.

But if Mr Daft has a dream, it is this. When demonstrators gather to protest against global capitalism, they should be drinking bottles of Coca-Cola, not smashing them.

"There will always be those who attack or criticise Coke in order to get publicity," he says. "But when it happens, we want our brand value to be such that people say: 'No, Coke's not like that. I just don't believe it'."

So far, Coca-Cola has managed to escape much of the opprobrium heaped by the anti-globalisation movement on multinational companies such as McDonald's, Nike and Royal Dutch/Shell.

One reason is that it has failed to give protesters much of a hook to hang their hostility on - unlike McDonald's with the McLibel trial, Nike with its overseas labour practices and Royal/Dutch Shell with its role in Nigeria.

Last year, however, Coca-Cola came dangerously close to providing a target when it bungled its response to a contamination scare in Europe, leading to accusations of corporate arrogance.

That affair was followed by clashes with regulators in Europe and elsewhere, who accused the company of throwing its weight around by agreeing to buy Cadbury Schweppes' soft drinks business without getting antitrust clearance.

Two weeks ago, a league table of global brands published in the Financial Times showed that the value of Coca-Cola's brand had slumped 13 per cent to $72.5bn in the last year. Interbrand, the consultancy that compiled the figures, said the events in Europe had a lot to do with the decline.

However improbably, Mr Daft claims to have welcomed the result, saying it helped him ram home the point he has been trying to make inside Coca-Cola: that when a company and its brand are synonymous, the way the company conducts itself is as important to the brand as conventional advertising and marketing.

"Whatever the brand stands for, the company must also stand for, and whatever the company stands for, the brand must.

"That is the biggest issue that got away from us in the last year or so," he says.

"If someone says you're acting in an arrogant fashion, and we say they're confusing hard negotiation with arrogance ... it doesn't matter whether we think they're right or not: if that spills over to the brand, you really get into trouble."

Arrogance seems almost to obsess Mr Daft - understandably, since it typically tops the list of vices that anti-globalisation campaigners detest in their targets.

The anti-McDonald's website, for example, says it has singled out the burger chain because it is "a particularly arrogant, shiny and self-important example of a system which values profits at the expense of anything else".

Significantly, there does not yet appear to be an anti-Coca-Cola website, and it will be a measure of Mr Daft's success in moulding Coca-Cola's brand image if there never is one.

He has the advantage that he could scarcely be more different from his buttoned-up and sometimes overbearing predecessor, Douglas Ivester. He leads by example: relaxed, unassuming, trustworthy and good-humoured, he embodies many of the qualities he wants Coca-Cola to project.

Where Coca-Cola went wrong, he says, was in moving towards greater centralisation just at a time when the backlash against globalisation was gathering pace. Decisions on local marketing, communications, and even which charity to support were taken at company headquarters in Atlanta.

"Where I think we missed the heartbeat over the last two or three years was that ... we ended up with a definition of a global consumer. We were looking at similarities, not differences, and we didn't stand for anything in particular for the individual."

Now Mr Daft is trying to rebuild the brand's relevance to different communities around the world. He has cut thousands of headquarters jobs, decentralising power and local advertising is replacing the global "Enjoy" campaign launched only six months ago.

In Europe, almost all the senior US executives have been replaced with local managers, and Mr Daft has spent a great deal of time mending fences with governments and regulators. Next time a problem arises, he hopes officials will call him and find out what is going on "before going into the public domain and talking about this arrogant company doing such-and-such".

Meanwhile, Mr Daft says he opposes extending the Coca-Cola brand to other products, even though the company recently licensed the European roll-out of a casual clothing range called Coca-Cola Ware. He inherited that decision, he says, indicating that he did so unenthusiastically.

Coca-Cola does not need to extend its brand, he says, because it already stands for far more than a brown, fizzy drink. "If we thought we were just selling a liquid, we would have been gone long ago. We're not. We're selling entertainment, a concept.

"Yes, it's refreshing on a hot day, but we're not selling just that: we're selling an idea through the imagery, the 100 years of advertising, the communication and the local community attitude. We've made it much more than a product."

So will Coca-Cola be around for ever? Or, as one of the first generation of consumer brands created more than a century ago, is it now approaching maturity?

"It's what you do to keep your brand, imagery and relevance," he replies. "The concept of a brand, provided you continue to renew it, will last forever, so if the concept lasts forever, a brand that continues to renew itself will last forever.

"If you don't continue to renew yourself. ..then the brand will disappear. It's up to the brand owners to make sure that doesn't happen."

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