I long ago lost the taste for Coke. Maybe it’s the fizz — there’s just too much of it. Or maybe it is the sticky sweet of the corn syrup in the U.S. version (corn subsidies and sugar tariffs are behind this). Or maybe it is because after I drink one, I feel a crazy buzz followed by devastating crash. I’ve never understood how anyone even stays awake after a super-sized burger, fries, and massive coke.
Apparently I’m not alone here. Coca-Cola is reporting declining sales in North America and even globally. Its stock price has been hit. Consumer tastes seem to be shifting from heavily carbonated and sugary drinks in general toward bottled water, sports drinks, and energy drinks. I noticed at my local fast food drive-through that they were pushing their own specialty ice drinks over any conventional sodas.
Why does this matter? Ringing in my ears right now are the many years of hysterical commentaries I’ve heard from intellectuals who have railed against the supposed power that coke has over the globe. They complain that coke signs festoon the world, that this drink has bamboozled the masses for more than a century, that this drink is the most visible sign of capitalism’s corruption.
But wait. Surely people can decide to drink or not to drink. No, no, say the intellectual elite who tell us constantly of the “myth of choice” in the market. We are swayed by weird forces outside our control. We fear that if we don’t drink Coke, we will not be part of the mainstream of life, will not fit corporately imposed expectations for how we are supposed to behave. Instead we are pawns in a game in which this scary company is king.
Well, think again. It turns out that the real power is in the hands of consumers after all. Stop drinking the stuff and the stuff goes away. That’s how markets work. Not even a 127-year legacy and a seemingly unstoppable cultural tradition are able to override the basic decision to buy or not to buy.
Another sign of Coke’s decline is that it recently fell from the number one spot to number three on the most respected ranking of global brands. The new number one is Apple and the number two is Google. In fact, out of the top 100 brands, the fastest moving ones are all technology companies. It’s a symbol of how communication is changing the world. More communication means more competition and the toppling of entrenched habits.
I might not love the drink but I’ve never understood the hatred that it has engendered. The company has an immense contribution to cultural history with its wonderful advertising that spans the whole of the 20th century. You can define the decades by their brilliance, whether it is drawings of the old soda-jerk shops, the “teach the world to sing” dramas, the polar bear, or today’s fantastic tributes to cross-border exchanges that keep the peace against the urge to war.
I can recall sitting at a baseball game a few years back and marveling at the sheer immensity of the Coca-Cola sign that was soaring above the stadium. Why did this company have to spend so much on advertising? Surely there wasn’t one person sitting in this stadium who didn’t already know about Coke. Why the mania for pushing the brand?
It’s advertising alone demonstrates that Coke has no actual “power” in the same way that the police have. It has no capacity to compel anyone to drink its product. This advertising was not actually throwing money away. It was pushing the brand in the hope of staying constantly in our minds, as well as advertising its own support for the great sport of baseball. Are there subliminal messages in all this advertising? Coke surely hopes so.
And there’s nothing wrong with that. But what happens when tastes fundamentally change? That’s a serious problem. Experts are saying that consumers have suddenly decided in favor of bitter drinks with less fizz. Can Coke change its recipe or introduce Energy Coke? Well, it is a survivor so anything is possible. Just have a look at all the brands it has bought recently just to hedge its bets.
You know what’s even more spectacular than Coke’s decline? Look at the bottled water that it replacing it. Now, if the opponents of the market economy want to rail against something, this is a perfect case. Lots of this stuff is more expensive than gasoline, which has to be extracted from the earth and refined in an incredibly complex and capital intensify process.
Mostly I can’t tell one bottle from the next. For that matter, I’ve never really understood what’s wrong with tap water. But de gustibus non est disputandum and all that.
If you were a central planner, setting out to establish prices apart from market experience, would you set the price of gas or bottle water as higher? It’s a pretty obvious choice, based on technological considerations alone. And yet, really existing markets have given us a different result than any outside intellectual could have ever predicted.
Of all the beautiful things about the market economy, its most wonderful feature is its capacity to confound the intellectuals with unrelenting surprise and counterintuitive results. In its sheer unpredictability, the market serves as a humbling force in the universe and a reminder that in this world, the real and ultimate power will always reside with the decentralized organizing forces of society itself.
Powerful people can slow down the world but they can’t stop it from changing. Thanks to the market, we will forever find ourselves rediscovering the great truth that the course of world events is not something anyone — not even a corporate giant like Coca-Cola — can finally control.