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St. Petersburg College

Coca-Cola & Sugar

A very complex problem Coca-Cola is facing is the dynamic of sugar use throughout the American diet. Sweetened drinks are a major source of calories that result in obesity. Coca-Cola has tried several methods over the years to eliminate the use of sugar in a verity of brands such as Diet Coke and Coke Zero. Unfortunately the artificial sweeteners in these products have fallen under a similar scrutiny. “Today, daily servings of CocaCola beverages are estimated at 1.9 billion globally” (Coca-Cola 2013). Coke has come a long way especially since the first serving of the product only set the consumers back five cents in 1888. With Coca-Cola sales falling they must figure out a way to replace popular brands with a more health conscience substitute or remove the negativity toward the brand altogether. “Coca-Cola spends more money on advertising than Microsoft and Apple combined” Bhasin, K. (2011). Coke has already designated a lot of money toward brand imaging without much success in altering the public’s perception of their sugar-sweetened beverages.

Coca-Cola has faced many complex issues throughout the years from bottle issues in 1916 to pesticide contamination in India from 2003 to 2004. One of the more substantial and most relevant issues they have faced was the additive Cocaine used in early versions of Coca-Cola Classic. Cocaine is a byproduct of the Coca leaf and was a very popular additive at the time. Coca-Cola Originally “called for five ounces of Coca leaf per gallon of syrup, a significant dose; in 1891, Candler claimed his formula (altered extensively from Pemberton's original) contained only a tenth of this amount. Coca-Cola once contained an estimated nine milligrams of Cocaine per glass” (Liebowitz, M. R. 1983). The stimulating Coca extract was removed in 1903 because of legal health laws. The Coca leaf is still used today although it has been detoxified removing any of its stimulating characteristics. In 1903 Coke didn’t have the option of removing its ingredient so the choice was easy. Sugar isn’t a legal issue as much as a moral one that holds the future of the company in its balance.

Unfortunately for Coca-Cola sugar can’t be as easily detoxified like the Coca plant. They have to come up with a perfect alternative that won’t be classified into a separate category such as Diet Coke. There are many sugar substitutes, but as any Coke drinker knows sugar has a very distinctive taste that can’t be replicated by a healthier version. No matter how hard Coke has tried, the alternatives just haven’t matched up to its predecessor. Diet Coke and Coke Zero have gained some traction throughout the Coke community but in recent years the sugar substitutes are under scrutiny for their possible role in diseases such as cancer. Diet Coke uses aspartame and acesulfame K that have been investigated by the FDA and permitted safe for human consumption. There are still many skeptics out there like the Center for Science in the Public Interest who claim these chemicals are unsafe and to stay away.

Why is sugar such a big deal to Coca-Cola? Sugar is the catalyst for the drinks success and is undeniably loved by all who consume it. Coke wouldn’t be Coca-Cola without it. Right now “Americans drink an average of 399 servings of Coke products per year.  50% of these are Coke brands, and 63% of those are Coca-Cola Classic” (Bhasin, K. 2011). Since each Coca-Cola Classic contains 39 grams of sugar per serving the average American Coke drinker consumes 10.8 pounds of sugar per year. Sugar is a plant-based derivative that has been mass-produced since the 18th century. The majority producer of the product today is Brazil. Sugar is a short chain, soluble carbohydrate composed of carbon, hydrogen and oxygen. It has been found to raise blood sugar glucose levels, which results in obesity and diabetes in the human body. It has also been linked to Alzheimer’s, cardiovascular disease and tooth decay. Some scientists even claim it has addictive properties. Herein lies the problem, with so many people becoming health conscious how can Coca-Cola’s number one selling beverage break away from the stigma of being unhealthy.

Coca-Cola’s sales are dropping rapidly in the sweetened beverage department because of the so-called war on sugar. Coke is at a standstill until it can find some sort of resolution. How does Coca-Cola define these problems? 1. Sugar has been linked to obesity, diabetes and other major health concerns. 2. Health conscious Americans are trying to cut sugar from their diet completely. 3. Each Coca-Cola Classic has 39 grams of sugar in every bottle. 4. Americans are associating Coca-Cola Classic with obesity. 5. Sales of Coca-Cola Classic are dwindling because of this. 6. There aren’t any perfect alternatives to replace sugar with. As of right now Coca-Cola is feeling the pinch but realizes that if an alternative isn’t found in the next few years the company will suffer greater losses than it is seeing today.

Health Concerns remain a major problem to organizations that produce and sell food products. Such companies must ensure that their products are not only safe for consumption, but are also free from disease causing elements (Chen, 2009).  This is concern of Coca Cola, which produces soft drinks and other carbonated beverage products. Under the current situation, the company finds itself in a very serious dilemma on how to eliminate the use of sweetened drinks from its product lines in American culture where sugar forms part of the diet.

The company has come to the realization that sweetened products have higher concentrations of calories that are responsible for obesity in the society. It must, therefore, show its concern towards the problem and stand with the society to prevent it. Its objective in this fight is to reduce the level of sugar content in the products.

Problem at hand: How Coca Cola can reduce the dynamic of sugar consumption in its products.

Objectives

Coca Cola must identify the best approaches of how to attain the above objective. The first approach will entail focusing on the production of low calorie beverages. High calorie content is the main factor associated with increasing prevalence of obesity among the consumers. In this respect, the company would achieve this objective by identifying alternative products that are safe for the consumers. It will be important for the company to substitute sweetened drinks with non-sweetened ones (Wenner, 2008).

However, this would not lead to the elimination of the problem because the company sales its drinks in a culture where sugar consumption in the diet is very common. The consumers may not adopt the new products due to the problem of taste preferences. It may be difficult for the company to sale the non-sweetened drinks among these consumers and realize the targeted sales revenues. The situation presents a major setback to the realization of the objective. Coca Cola will have to increase the adoption rate for non-sweetened products through health awareness campaigns. For example, giving information to the consumers on how sugar consumption causes diabetes can change their mindsets (Smithers, 2014).

The organization should focus on anti-obesity campaigns to transform the sugar consumption habits of its consumers. It is vital that such campaigns be targeted at the buyers so as to change their behavior. Coca Cola should come up with a clear message that informs the consumers on the dangers of sweetened-drinks. For example, commercial adverts for the non-sweetened products should be accompanied with the health awareness message. The campaign strategy should also embrace the product features by creating the differences between the two sets of the drinks. For example, Coca Cola can shift from red branding to green branding of all the products so that consumers can associate the green color with low sugar content. This approach will ensure that the company creates awareness for the new products and also informs its consumers about the major health concerns associated with the consumption of the sugary ones (Engber, 2014).

Effective promotional strategies for the new products should help the company to reduce the problem of declined sales and enhance the level of profitability. Despite the fact the non-sweetened products will be healthier for the consumers; the company anticipates a decline in the level of sales revenues and profits. Coca Cola knows very well that the adoption and usage rates may be lower for the new products as consumers may not find them tasty as the sugared ones. In this respect, product promotion strategies coupled with health awareness campaigns will help the organization to increase the level of sales (Wenner, 2008).

The realization of safety products will also emanate from the company’s initiative to shift from the use of artificial sweeteners to natural non-processed sweeteners that are healthy for the buyers. Artificial sweeteners contain higher amounts of calories than the natural ones. For example, artificial sugar contains three times the amount of calories found in a stevia plant. The company can, therefore, solve the problem of taste preferences among the consumers by using the natural sweeteners, which are safe for human consumption (Vāvere, 2014).

Coca Cola will be compelled to comply with the industry and government requirements on health matters. Both the government and the industry players have the responsibility to ensure that the products sold to the consumers are free from disease causing chemicals. For instance, industry regulations require the firms in the beverage industry to observe the required sugar levels when producing their products. On other hand, the government inhibits the firms from using chemicals that are carcinogenic (Engber, 2014). In conclusion, the organization should strive to be ethical in its business practices and adheres to the health requirements in the sector. Coca Cola will realize the objective by adopting safe products and promoting them to increase their sales. The company will have to comply with the health standards and regulations in different states so as to manufacture healthy products that meet the various legal requirements in the states.

It’s time for Coca-Cola to roll with the times. Being a cannon in the soda industry during the early 2000’s will mean competing with green Industry leaders and the awareness of obesity campaigns from 2010 and beyond. Having a sugary product as the face of their company is going to have to change. Creating alternatives to their standard way of business could be successful by paying attention to trends and making deliberate decisions toward the future. Reducing the levels of sugar products, focusing on health campaigns that involve their new products, and raising the bar on health standards could be three ways to increase profits and change the way the world sees Coke.

Foremost, Coca Cola will need to reduce the level of sugar in products and focus on low calorie beverages by substituting sweetened drinks with non-sweetened ones or creating a product that has a natural sweetener. They could do this by using fruits and even nuts for sweeting their drinks. Cherry coke could actually have the sweetness of cherries! Coconut nectar is an excellent alternative. Almonds have their own savory sweetness. Using their scientists and patenting a new product that adds sweetness without the calories or the harsh destructors of chemicals could be a great answer. Maybe the face of Coke could change from being a soft drink to a fruit drink instead? Keeping the label and the logo is important for branding but, the general public might react favorably to a green label on a fruit drink or on flavored water.

A great means to this end may be to focus on health campaigns that show their products as the contributors to the healthy lifestyles that Americans have been focusing on since the obesity awareness kick. This could raise profits worldwide as well. It would be smart to become a green industry leader using their marketing campaigns that highlight the focus of Coca Cola and its affiliates to comply with the health standards and regulations in different states. Then manufacture healthy products that meet the various legal requirements in the states. Increase the adoption rate for non-sweetened products through health awareness campaigns. For example, giving information to the consumers on how sugar consumption causes diabetes can change their mindsets about how the products they consume can affect their well-being. A campaign that would also focusing on the rising obesity issues due to high calorie and high sugar foods in vending machines in our schools is a great way to get attention from the middle class. Market Coca-Cola as the company that has always given the world what they want; and now they all want to be healthy. New information has come to light in recent years and people are becoming aware of damaging effects from unhealthy foods on their bodies. People are angry about GMO’s and companies such as Monsanto feeding us damaging products. A focus on obesity and wellness campaigns could well keep profits soaring.

Another alternative is to be an industry leader that concentrates on raising the bar on health standards. Initiating legislation that is backed by Coca-Cola and its stakeholders that clearly push for healthier legal standards on foods could be a great way to take part of the spotlight from the health product industry. The image for all Coca Cola stakeholders could be people who want to make a difference in the standards for health consciousness worldwide. Coke might jump on the campaign for healthier foods in public schools and college campuses start an outreach campaign that feeds the unfortunate through healthier alternatives – hot school lunches with a healthy drink, vending machines that offer almond milk etc. Becoming activists toward making laws that increase health code restriction standards might well be a way to be seen by the public eye as the company who has always cared.

Coca cola needs to ride the surf on what people want. Highlighting themselves as a sustainable company that provides information to the community about health products and raises awareness about how we can all take better care of our bodies is a great way to focus on the trending profit margins that are up and coming. Being an activist for the betterment of quality healthier lifestyles is a proven way to keep profits high and energy toward a company on an upswing as well. It might do well for them to advertise that they are adverse to GMO’s and anything or any company that is providing unhealthy choices. It’s time for coke to step up as an industry leader that really cares about the health and well-being of the bodies with which their products are consumed. People are feeling like they are being overrun by large companies like Monsanto. To the health advocates, Coca-Cola could be the hero that stops the big bad monster that’s killing us all. What a great way for them to market a product that is healthy and well received; which of course, means higher profit margins! Coca cola should raise the bar. Be the health conscious company that everyone wants to emulate.

Evaluation of Alternatives:

A. Coca Cola will reduce the amount of sugar in its drinks and create a drink with a natural sweetener.

There are sever sources of natural and artificial sweeteners out there; however, as mentioned earlier, artificial sweeteners seem to have other issues by way of the Food and Drug administration regarding there long term effects. After analysis of different sources, it seems that natural Agave nectar may be the best alternative because it would “Agave nectar is a real sugar, as opposed to an artificial or non-nutritive sweetener. It has properties similar to many sugars with one important exception: its glycemic index is significantly lower. This makes it a healthier alternative to many processed AND natural sweeteners, including: white granulated sugar, brown sugar, turbinado sugar, maple sugar crystals, dehydrated cane juice, date sugar. (All About Agave, 2015)”

There is a lot of speculation about the fact that agave nectar is a type of sugar and therefore not actually a health food, it would not be considered a health food in our analysis either. Though agave nectar is more calorie-dense than brown or white sugar, it is about 40% sweeter, so the amount of agave can be reduced. Essentially, Coca Cola would not have to add in as much of the sweetener to still grab the desired effect. So, in theory, if a can of Coca Cola Classic has a total of 10.6 grams of sugar, then we would only be required to put about 4.24 grams of agave nectar to achieve the same amount of sweetness. So, the average American would therefore reduce it’s drinking of sugar consumption from about 10.8 pounds per year to only 4.32 pounds in a given year. The health hazards of drinking sugar sweetened beverages like sodas and sugary fruit drinks is no secret.

B. As a company, raise the bar on health standards. Raise campaign ads for healthier lifestyles and push our more sustainable brand and company.

Americans are becoming more aware of the health scares caused by high calorie and high sugar foods. Coca Cola could truly market itself as a brand that care about a healthy lifestyle and the types of ingredients that are in our products. Instead of giving the option of drinking Diet Coke or Coke Zero, we’ll offer something that is slightly less damaging than our original coke without taking much away from taste. Coke drinkers typically do not like the taste of Diet Coke and vice versa. But considering an all-natural coke, with sustainable products and ingredients could show us as a company that cares about our consumers and that we’re not solely concerned about profit but also the betterment of our consumers.

Consequences:

Our drinks would have a lower glycemic index and would be able to be marketed as a more health conscious alternative without sacrificing too much of the taste. With the all-natural sweetener, this is a better alternative to say people attempting to manage their weights because Agave nectar's low “glycemic index makes it suitable for some individuals on low-carb or slow-carb diets (the Atkins Diet, the South Beach Diet) and for a variety of weight loss/management programs. Granulated sugar has an average glycemic index in the high 60's, while agave generally scores under 30. (Agave, 2015)” Less of the sugar would be used so it could also be a good alternative for diabetic users. Because agave has a lower glycemic index than refined sugars, its carbohydrates are less likely to raise the blood sugar quickly. Again - agave is not a "free" food but, under proper medical monitoring, using it as a substitute for sugar may broaden dietary options for many diabetics.

Ultimately, there would be decrease the amount of cases of people either gaining weight or becoming diabetic solely from their consumption of our products. Since many Americans feel the need to drink carbonated beverages, offering this alternative allows them to ultimately cut down on sugar consumption, carbs with a less threatening, all natural sugar substitute.

Our nation is becoming increasingly more interested in their health and lifestyles. They can about GMOs, about sugar and caloric intake. We have apps and wrist bands and all types of things that help us monitor our weight. Branding ourselves to these more health conscious consumers and doing different ad campaigns in schools will give us the ability to change the stigma that has been placed upon us by the growing obesity in the country. It will let the younger generations, school age children, to know that Coca Cola is a company that cares and it may not be a carrot and kale smoothie, but it cannot be denied that it is a better alternative to what used to be.

Risks:

Although the agave nectar could be a better alternative to sugar, it may not necessarily ring true to the millions of coca cola classic drinkers because “old habits die hard”. The reason that Coca Cola Classic has the name that it does is because at some point in their history, Coca Cola changed the recipe of the cola and it caused an uproar from the consumers that had drank original Coke their whole lives.” marking the first formula change in 99 years. (Coca-Cola Company, 2012)” “New Coke” that was created in 1985 and was widely disliked and customers literally complained until the classic recipe was replaced.

Our customers like what they like and may turn their nose away to any changes, even if it was a better choice. As far as taste, agave does have a very similar taste to regular sugar and it shouldn’t be much of a change in taste but many tests would have to be run to make sure that we get the correct ratio of agave to soda to ensure the most authentic taste.

References