Before Yours Truly went on a diet and lost 90 pounds, I was known far and wide as the telecom magazine editor with a stupendous Pepsi addiction, one that took the form of my guzzling a six pack of 16-ounce bottles every day. It was my only vice. Public relations folk who knew me would sometimes ship to my office whole cases of Pepsi, partly as a gag, partly to get on my good side. (It generally worked.) Those unfortunate PR people who hadn’t done their research on me would instead send cases of assorted bottles of fine California wines, which I always gave away to my eager and grateful co-workers.
However, prior to my college days I was an imbiber of Coca-Cola. When I entered college (the much-esteemed Rowan University) the soft drink vending machine outside of the Bureau of Student Publications in the Student Center dispensed Pepsi, and the principal editors were Pepsi addicts, so I switched to the more fizzy, sweeter cola. Whereas Coke had an orangey base and relied on corn syrup for its sweetness (mostly as a result of skyrocketing sugar prices), Pepsi had a higher percentage of real, honest-to-goodness sucrose sugar and a bit more of a “bite” to it. It immediately became my new ambrosia.
Just as in my own case, Coca-Cola and Pepsi-Cola have battled for the public’s taste bud approval for over a century now. Both beverages were formulated by pharmacists in the American South, and both in their day were proffered as a medicinal cure for every malady imaginable, from peptic ulcers to headache, neuralgia, hysteria, and melancholy. Actually, Coke probably did have the ability to assuage melancholy back in the old days, since it was invented as a “coca wine,” a mixture of wine and cocaine. There was also a competitor called Metcalf’s Coca Wine, a fluid containing a compound now known as cocaethylene, a stimulant almost as powerful as cocaine. In the case of Coca-Cola, its inventor, John Styth Pemberton, in 1885 concocted a pirated version of another wine spiked with coca leaves, Vin Mariani, a favorite of Queen Victoria, Thomas Edison, Jules Verne, Emile Zola, Hendrik Ibsen, the Russian Czar, Ulysses S. Grant, Pope Leo XIII and later Pope Saint Pius X.
Toward the end of 1885, however, Pemberton’s home town of Atlanta, Georgia and Fulton County passed prohibition legislation, and “Pemberton’s French Wine Cola” became Coca-Cola as the alcohol and cocaine were replaced with syrup, coca leaves and caffeine-rich kola nuts, along with a later secret ingredient (probably a mixture of oils) called 7X.
The Coca-Cola company later convinced U.S. President Franklin Delano Roosevelt that Coca-Cola was somehow important to winning World War II and projecting American business and culture abroad, and so by the end of the 1940s there were Coca-Cola bottling plants in at least 30 countries. Coke become the single most recognized brand named in the world. This exasperated the rival Pepsi-Cola Company, which began backing its own political candidate, Joe McCarthy. Nicknamed “The Pepsi Cola Kid,” McCarthy helped pass a bill that ended sugar rationing following World War II. Indeed, during the years 1947-1949, McCarthy accepted kickbacks totaling $20,000 in exchange for his aid in circumventing post-war sugar rationing. McCarthy, of course, is better known for masterminding witch-hunts for Communists in the 1950s than he is for his support of the soft drink industry. But he did inadvertently cement a political phenomenon in place: When a Democrat (liberal) occupies the White House, Coke vending machines are present everywhere. When a Republican (conservative) president moves in, out goes the Coke and in come the Pepsi machines.
During the 1960s, Don Masse, “the voice of polo in the East,” as he was known, was working as an announcer at the polo grounds near Purchase, New York, about 45 minutes from New York City. His boss asked him to take a VIP visitor on a tour of the grounds, one Richard Nixon, who was between jobs as Vice President and President (or political crook and figure of evil, depending on how you look at it). Masse dutifully complied. Later, his boss came to speak with him.
“Well, Don, I’ve got some good news and bad news,” said the boss. “The good news is, Nixon loved the tour of the grounds. The bad news is, he was scouting out locations for his client, PepsiCo. They’re going to buy this place, tear it down, and convert 114 acres into the new PepsiCo World Headquarters. Looks like you’re out of a job, Don old buddy…” And so he was. (I later briefly dated his daughter Meg, who told me the story.)
Since both Coke and Pepsi have presumably analyzed each other’s drink recipes using the most advanced scientific instruments (gas chromatographs, etc.) one wonders how the brands could possibly distinguish themselves. Colas in and of themselves are not particularly exciting. After all, it was the late Steve Jobs who lured John Sculley—inventor of the successful 1975 ‘the Pepsi Challenge’ marketing campaign—to Work at Apple with the condescending pitch, “Do you want to sell sugar water for the rest of your life or come with me and change the world?”
In an interview with Leander Kahney a year before Jobs’ death, Sculley said he “described to him [Jobs] that there’s not much difference between a Pepsi and a Coke, but we were outsold nine to one. Our job was to convince people that Pepsi was a big enough decision that they ought to pay attention to it, and eventually switch. We decided that we had to treat Pepsi like a necktie. In that era people cared what necktie they wore. The necktie said: ‘Here’s how I want you to see me.’ So we have to make Pepsi like a nice necktie. When you are holding a Pepsi in your hand, its says, ‘Here’s how I want you to see me.’”
“We did some research and we discovered that when people were going to serve soft drinks to a friend in their home, if they had Coca Cola in the fridge, they would go out to the kitchen, open the fridge, take out the Coke bottle, bring it out, put it on the table and pour a glass in front of their guests,” said Sculley.
“If it was a Pepsi,” said Sculley, “they would go out in to the kitchen, take it out of the fridge, open it, and pour it in a glass in the kitchen, and only bring the glass out. The point was people were embarrassed to have someone know that they were serving Pepsi. Maybe they would think it was Coke because Coke had a better perception. It was a better necktie. Steve was fascinated by that.”
“We talked a lot about how perception leads reality,” said Sculley, “and how if you are going to create a reality you have to be able to create the perception. We did it with something called the Pepsi generation.”
“I had learned through a lecture that Dr. Margaret Mead had given, an anthropologist in the 60’s,” said Sculley, “that the most important fact for marketers was going to be the emergence of an affluent middle class—what we call the Baby Boomers, who are now turning 60. They were the first people to have discretionary income. They could go out and spend money for things other than what they had to have.”
“When we created Pepsi generation it was created with them in mind. It was always focusing on the user of the drink, never the drink,” said Sculley.
“Coke always focused on the drink,” said Sculley. “We focused on the person using it. We showed people riding dirt bikes, waterskiing, or kite flying, hang gliding—doing different things. And at the end of it there would always be a Pepsi as a reward. This all happened when color television was first coming in. We were the first company to do lifestyle marketing. The first and the longest-running lifestyle campaign was—and still is—Pepsi.”
“We did it was just as color television was coming in and when large-screen TVs were coming in, like 19-inch screens,” said Sculley. “We didn’t go to people who made TV commercials because they were making commercials for little tiny black-and-white screens. We went out to Hollywood and got the best movie directors and said we want you to make 60-second movies for us. They were lifestyle movies. The whole thing was to create the perception that Pepsi was number one because you couldn’t be number one unless you thought like number one. You had to appear like number one. Steve loved those ideas.”
Sometimes, as in the case of long-standing products such as beverages that closely resemble one another, the only thing a company can do is to create a new brand. Today, with social media, people are becoming silent partners in the development of brands, rather than just being bombarded with advertising.
At BrandsConf 2011, Mary-Ann Somers (@masomers)—VP Marketing of the Venturing & Emerging Brands, an independent business unit of Coca-Cola North America, said, “We’re really tasked with doing some things that are different from the base brands. We’re looking to develop and identify what’s new and next in beverages. So I’m going to ‘helicopter up’ a bit, and talk to you about innovation and the way we see that brands are built today, and how ‘social’ fits into that. Social is a reflection of the things that we see as bigger changes. But it’s one part of the overall strategy.”
“So just to give you a little idea of the industry in which I work—beverages—does anybody have any idea how beverages brands there are today?” asked Somers. “I hear 485… 500 I think I heard… 1600… Okay, when I got into this business, I figured there were maybe 500 or so; maybe a couple of hundred and then I upped a bit more. There are in fact over 4,000 brands in beverages at any given time. It’s unbelievable. An incredibly dynamic industry, a lot of activity going on. And really you see people from developing products in their kitchens and going to sell it to the big brands like the Cokes and Pepsis of the world. So it turns the gamut.”
“Interestingly, what we did was to look at all the brands in the industry and looked at them more broadly than we typically do at some of the big companies,” said Somers. “And what we found is, we looked at the growth in the industry. We looked at a 10-year period broken up into two five-year periods. Half of the growth was driven by brands that barely existed beforehand. So these are brands that started small, had made it through and had done well enough that they were driving half of the growth in the industry. Within that, a third of the growth was from categories that barely existed today. So it might seem a bit conceptual. What do I mean by that? If you think about the brands that have been driven, these are some of the ones that have changed the category, changed the industry. They have developed new segments within the beverage industry and if you look at it, interestingly enough, there are some exceptions, like simply orange juice, but for the most part, the category disruptions have been driven by entrepreneurs and not the big guys, not the Cokes and Pepsis of the world.”
“So we really took that to heart and asked, ‘What does that mean about how do we create new products and develop and go to market with new products that these guys have learned?’ And we took some of our learnings, which we were humbled by, and we put together a video to think about how brands are built today. So if I can queue the video… hopefully this will work…”
The video then appeared on the screen along with its accompanying narration: “Ideas. The need for them has never changed, but how those ideas get to market has. Today, passionate entrepreneurs are creating innovative new brands and are achieving success. They’ve embraced a new way of building brands that is in step with our changing world, and we must to the same. We must learn the art of emerging. Technology had empowered consumers. They check a brand’s honesty with just a click. They distrust big business and celebrate their value as individuals. This independence has led them to prefer brands that are not sold to them. Rather, they seek the authenticity of brands they discover by themselves. And some brands seem to be better than others at getting discovered, better at engaging consumers in the right way at the right time, better at emerging.”
“The art of emerging,” continued Somers’ video, “is not brand-building as we’ve known it. It’s a new art, achieved by today’s product proliferation, and by blurred borders between traditional categories. Emerging brands are embraced by a small group of people who value the brand for how it meets their needs and whose sense of discovery makes them as passionate about the brand as the entrepreneur who created it. The art of emerging requires that we look at everything we do through different eyes. We have to see differently and touch differently. We have to let 360 degree high-touch brand building and be the forerunner to high science, mass market brand building, and we must be so intimately involved that we know the precise moment that one becomes the other. Emerging is organic. It is natural. It is slow growth built on word of mouth. Built on the opposite of ubiquity. It is nurturing a movement rather than swaying the masses. It’s more about storytelling then conveying facts. Salespeople, distributors, retailers, first consumers; emerging brands turn them all into ‘brand ambassadors.’ They are the brand. But building these brand communities takes time and patience. It’s about knowing the consumer, not just researching the consumer. It means applying familiar tactics in far more targeted ways tailored to the core brand idea”
“ Sampling requires a new, almost surgical precision to make sure that the product is not just in people’s hands, but in the right hand,” says the video. “It’s no longer a sales call, but a brand conversation. It’s not about the account that may sell more—it’s the account that you care about. It’s no longer about marketing—it’s strategic surrounding of those most likely to want to discover the brand. Emerging brands are fragile. Too much mass marketing too soon, and the magic is lost, the sense of community is lost, and the opportunity is lost. Few brands today can simply ‘arrive.’ They must emerge. The art of emerging is not doing things differently purely for the sake of being different; it is a new model of brand evolution through collaboration. It’s how the heroes of tomorrow will be created. It’s how the next billion-dollar brand will be built.”
“So you see this speaks to some themes that you’ve heard earlier today,” said Somers, “but there’s a couple that I just want to point out: The idea that it takes time to build brands and make connections. Sometimes big companies like ours are not so good about understanding that and giving us the time to do that. If you think about your twitter account, it grows one by one. It’s not all of a sudden, boom, you’ve got a whole bunch of people following you. So what does that mean for our group? We both invest in entrepreneurial brands and we create new brands ourselves. But our strategy is really, if we’re thinking of what’s new-and-next for the future, we really live on the left of the adoption curve. We’re all about the early influencers, the people who are trying new things, and we focus on health and wellness. We call them LOHAS [Lifestyles of Health and Sustainability] consumer lifestyles, health and wellness, health and sustainability.”
“So that’s where we ‘live’ and we try to really get to know that consumer and specialize in that,” said Somers, “and then as it goes mainstream, it goes to the right [on the projected chart] and we go deep in the connections.”
Somers then quickly discussed one of the brands her group at Coca-Cola developed internally for health-and-beauty conscious Japanese women, called Sokenbicha (pronounced “SO-can-BEE-cha”), an unsweetened tea, the name of which (Chinese, interestingly) means “refreshing healthful beauty tea.”
“It drinks like water,” said Somers. “It’s very pure and clean and crisp, and yet it has the goodness of teas and natural botanicals. So we asked how we could build this brand knowing the things we know now about the way to connect to consumers. One thing is that, from an authenticity standpoint, we work very closely with a company called Nihando, which is the leading Kampo boutique in Japan. Kampao is traditional Japanese medicine [actually the Japanese study and adaptation and of traditional Chinese medicine, particularly herbal medicine]. So we’re looking at it from an alternative point of view and wellness overall.”
“We partnered with NIhando and they really developed the formulas for it [Sokenbicha],” said Somers. “The other thing we did was to partner with Mallika Chopra and her intent.com, and really had a full program with her. Here [on the screen] you can see the more traditional things where we have banner ads and certain kinds of advertising on her site but, importantly, one of the things that we did was to create an experience. We called it ‘Serenity.’ It was in Union Square in San Francisco. The way I like to describe it is, if you think about a flash mob of meditation, so that those ten seconds or however long we did those before, that minute that we did earlier, if you can imagine that for 10 minutes in the middle of San Francisco, where people just stopped and meditated. And we also had yoga going on there and we had a lot of people stopping by to see what was happening and it created a lot of interested. That was a live event, and then clearly what we did was to work with that from a visual standpoint and expanded the reach of it. As you can see here [on the screen] some of the different articles and blogs and other coverage that we got on the whole event. Even people outside of the U.S. wanted to participate. It was the start of something for us. So as we think about it going forward we can expand it even more and reach more people through digital means. We also created content. Mallika and her team created illustrated meditation guides. During your busy day you can think about ways to stop and balance yourself and ground yourself again.”
“These aspects were available digitally and they had a viral component to them as well,” said Somers. “People could share with each other. So that was something we were very excited about. We think that’s a way to build brands. We have big brand and we do a lot of mass programs, but there’s also new ways to build brands that are focused on health and wellness, and that’s what we do at Venturing & Emerging Brands.”
We don’t know if Somers’ branding of beverages with their Zen-like appeal to health and wellness ever match in popularity the sizzling, exciting and emotional appeal of those liquids promoted by multimillion dollar, celebrity-laden jingle fest marketing campaigns, but social media, like everything else, is having its impact, even on flavored water.
As for Yours Truly, I’m think I’m starting to acquire a taste for absinthe…
# # #
Richard Grigonis (@EditStateofNow) is Editor-in-Chief of Jeff Pulver’s State of NOW / #140conf community website.
Back to top