Coke In Your Faucet? - Douglas Daft, executive - Interview

Bringing new meaning to the term "leaky faucet," Coca-Cola recently announced the development of a system to bring Coke into consumers' homes via a tap on the kitchen sink. This would fulfill former CEO Roberto Goizueta's dream that the "C" on the cold tap would come to stand for "Coke."

In an exclusive interview with London's Sunday Times in March, current CEO Douglas Daft said the company's innovations unit in New York had developed a prototype for the home Coke-on-tap system.

"You would have water mixing automatically with the concentrate and then connect it all up so that when you turn on your tap, you have Coke at home," explained Daft. Local water would be pumped through a purifier to remove regional differences in flavor, then carbonated and mixed with syrup right at the tap. "There's a lot more to it than that to ensure quality, and it has to be a sealed unit so people can't alter the formula to destroy the value of the brand," Daft added.

Coke has no current plans to sell the units and refused to provide me with more details. Rival drink companies criticized the idea as unrealistic and unnecessary, but Coke is undeterred.

Coca-Cola has long had aspirations to replace water with its sugary beverages. Goizueta, who was CEO from 1981 to 1997, proclaimed in 1986 that "right now, the United States, people consume more soft drinks than any other liquid--including ordinary tap water. If we take full advantage of our opportunities, someday, not too many years into our second century, we will see the same wave catching on in market after market, until, eventually, the number one beverage on Earth will be soft drinks--our soft drinks," according to Mark Pendergrast's For God, Country, and Coca-Cola (Basic Books, 2000).

Or, as the company's 2000 annual report notes, "We're redefining how consumers get hydrated."

With its latest idea, Coca-Cola would more than ever be pitting what Michael Jacobson of the Center for Science in the Public Interest has called "liquid candy" against drinking water. But that would be just an extension of the battle Coke has been waging to slake humanity's thirst.

Coca-Cola dominates almost half of the global soft drink market and makes more than three-quarters of its income from overseas sales, according to Coke spokesperson Rob Baskin. Last year, sales growth of its flagship cola in Asia outstripped the company's overall growth. In the first quarter of 2001, Coke sales grew ten times faster in Asia and Africa than in North America, the company said.

There is a huge "potential for significant expansion" in non-Western markets, Daft said in an April 18 company press release.

"Our universe is infinite," wrote Goizueta in the company's 1995 annual report. "We, ourselves, are the key variable in just how much of it we capture."

Pendergrast cites numerous examples of Coke officials pining over the "sweat belt," which they define as those hot, poor countries where Islam and other religions forbid the consumption of alcoholic drinks. But to increase its sales in the Third World market, Coke will have to seize large amounts of what governments around the world have yet to secure--clean, safe, drinking water. According to a November 2000 report on the global water supply by the World Health Organization and UNICEF, more than one billion people around the world don't have access to safe drinking water. To remedy this global dessication, the World Bank has taken steps to lure for-profit corporations into buying the world's ailing water supply systems, much to the chagrin of anti-globalization and human rights activists.

"It is to the benefit of companies like Coca-Cola to allow the quality of water to decline," says Maude Barlow, author of Blue Gold: The Global Water Crisis and the Commodification of the World's Water Supply (International Forum on Globalization, 1999). The company has the bucks to buy water licenses and thus can turn much-needed "blue gold" into its nutritionally valueless soda. "Then the only real alternative for many people are their products," Barlow says.

As the World Bank insists that countries privatize their water distribution, the price of water skyrockets. The ill-fated 1999 privatization of the water supply in Cochabamba, Bolivia, for instance, resulted in water prices that would have absorbed more than half the annual income of local residents. In many parts of the developing world today, says Barlow, people are spending from one-third to one-half of their incomes on obtaining water.

The price of a soft drink--always available, always Coca-Cola--may not look so bad under such circumstances. The vast majority of soft drinks in India are consumed by middle and low income people in small towns and villages, not by richer urbanites, according to a recent study by the New Delhi-based National Council for Applied Economic Research entitled "Economic Contributions of the Soft Drink Industry." These people have widespread access to soft drinks and perceive them to serve "functional needs of thirst-quenching, rehydration, safety, and hygiene," reported the Hindustan Times.

On a recent trip to Central America, I found Coke available at every corner bodega at one-quarter the price of bottled water, even in areas where the local water was not potable.

In places such as the United States and Europe, where foods are relatively abundant, drinking colas not only contributes to tooth decay and obesity, it fills the stomachs of people who may otherwise eat or drink something better for them.

But in places where vast majorities lack nutritious calories and clean water, it seems a double cruelty to siphon off whatever little clean water is available and adulterate it with brown syrup. Coke ships syrup to its local bottlers, who must find clean water to mix with it on site. Coke has entered into partnerships with municipalities in India, for instance, to build water filtration systems so their bottlers can get clean water to make soda.

But then again, Coca-Cola has had "many, many years of experience selling products to people who don't need them," says Marion Nestle, chair of the department of nutrition and food studies at New York University. The introduction of processed foods into Third World diets has resulted in "staggering" and "instantaneous" change in people's health status, says Nestle. Obesity, diabetes, and heart disease are now an "absolutely worldwide phenomenon, even in the poorest countries," she says.

The conventional wisdom is that people need eight glasses of water a day, and sodas are significantly less hydrating than plain water, according to an article in the July 1998 issue of Tufts University Health and Nutrition Letter. Professor Nestle confirmed the diminished hydration effect of sodas. So a thirsty person would be far more wired than hydrated by eight or more caffeinated sodas a day.

"I've seen small kids in different Third World countries with their teeth rotting out" from drinking so much soda, says Barlow.

To add insult to injury, mass-produced soft drinks threaten to replace culturally diverse, homemade, and medicinal drinks in the Third World as they already have in the West. "No longer are homemade snacks and lime juice or buttermilk offered to guests. Instead, chips and aerated soft drinks are,"writes Indian food activist Vandana Shiva in Stolen Harvest (South End, 2000).

As access to water shrinks, Coke will be poised to jump into the thirst gap. Coke's global ubiquity is staggering. According to a 1990 study cited by Pendergrast, more than 80 percent of teenagers around the world recognize the Coke logo. Seventeen billion cases of Coke drinks are available in nearly 200 countries, according to the company.

Coke is willing to invest in places where it won't see a profit for many years, said company spokesperson Baskin, because it is confident that as economies develop, people will want to drink Coke. The company sent the beverage to starving North Koreans last June. Coke, which, with its bottlers, is the largest private employer on the African continent, has recently reintroduced itself to war-ravaged Angola, bringing its bubbly concoction to a place where more than a million people are fed by the World Food Program of the United Nations. While the Angolan government has provided less than half of its population with an adequate water supply, its partnership with Coke (the government owns a 45 percent stake in the company) will likely mean plenty of clean water for sodas.

Defending Coke's marketing practices in the Third World, Coke's Doug Ivester, CEO from 1997 to 1999, noted that "fluid replenishment is a key to health," and went on to claim that "Coca-Cola does a great service because it encourages people to take in more and more liquids."

Coca-Cola is peddling drugs, albeit mild ones. Six of the seven most popular soft drinks in this country contain caffeine. Sugar helps the buzz, too, so when cola manufacturers produce sugar-free colas, they up the caffeine content to compensate, according to a February 27 article in The Washington Post. (Industry groups claim that they use caffeine to enhance the flavor of the drink, but blind taste tests by the Johns Hopkins Medical Institutions have shown that most people can't detect the presence or absence of caffeine in their colas.

Perhaps there was a hint of prophetic intervention when the wind distorted one of Coke's first skywritten messages to unsuspecting Cubans in pre-revolutionary times. According to Pendergrast's book, instead of "Tome Coca-Cola" ("Drink Coca-Cola"), the message across the sky read instead, "Teme Coca-Cola" ("Fear Coca-Cola").

Coke's plan to bring its soft drinks to your kitchen faucet is still in its early stages. But the market for Coke-on-the-kitchen-tap could be huge, says Pendergrast.

"If they can work out the kinks technically, and if they offer a real break in the price per ounce to homeowners who want to install a system in their recreation rooms, I think you might see a real market open up," Pendergrast says. "What if they made a deal with refrigerator manufacturers to offer it as part of the front-off-fridge device that currently dispenses crushed ice or ice water? It's a tantalizing possibility for them."

One unnamed Coke spokesperson told Off Licence News, a British beverage industry weekly, in March that the units could be installed in apartment blocks.

"There's not a market yet," Daft said. "People still like to physically go and buy things. But one day, yes, this will be a reality."

Sonia Shah is a freelance writer and a former editor/publisher at South End Press. She lives in Storrs, Connecticut.

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