Marketing in Action Case Real Choices at Coca-Cola What do you do when your customer starts to shrink, both lit- erally and figuratively? The sale of soft drinks in the U.S. is not what it used to be. The $98 billion soft-drink industry is being challenged by changes in consumers' attitudes toward both sugar-sweetened and diet drinks. Historically, soft drinks have been a significant portion of the American diet and sales have grown year after year. In the U.S. the rates of obesity, diabetes, and other weight- related health issues are on the rise. In 2014, the Centers for Disease Control and Prevention found that 35 percent of U.S. adults were obese. And the problem is not limited to adults; with distressing regularity children are being diagnosed as obese. Although obesity and its related issues are complicated and have many different causes, soft drink manufacturers, like Coca-Cola, have been forced to bear a large share of the blame. This combined with the current consumer trend toward a healthier lifestyle has dealt a blow to the beverage industry. Since the 1990s, the sales of soft drinks have fallen by more than 25 percent. J. Alexander M. Douglas Jr., president of Coca-Cola North America, stated that the public's change toward better health and wellness is transforming the long-term competitive en- vironment. As many consumers have changed their attitudes toward sweetened soft drinks, they have also begun to ques- tion the safety of artificial sweeteners used in diet soft drinks. According to Barry M. Popkin, a professor of nutrition at the University of North Carolina, this has led to consumers chang- ing from regular to diet soft drinks and finally to other bever- ages. The decision for many consumers has ultimately been to choose water. Ironically, health and wellness were a key component of the beginning of the Coca-Cola story. In 1886, Dr. John S. Pemberton, a pharmacist, created a flavored syrup that was mixed with carbonated water and sold to customers. The association of obesity and soft drinks has become so much of a problem that in some cities, politician are propos- ing "soda taxes" to reduce the amount of sugar consumed. For now the soft-drink manufacturers are winning the political battles but are in jeopardy of losing overall. One of the con- sequences of these policy fights is that consumers are being reminded that soft drinks may not be the healthiest choice. Coca-Cola has documented in a recent annual report that "Obesity concerns may reduce demand for some of our products." It has also stated that obesity and its corresponding health concerns are important risk considerations for Coca- Cola's business growth and sustained profitability. How will this ongoing concern by public health officials effect how Americans feel about soft drinks in the long run? Will soft drinks ever attain the negative status of tobacco products, which many consumers have abandoned? Will Coca-Cola be able to reclaim its former position as market leader or must Coke change its focus to something else? You Make the Call The motivation was to create a non-alcoholic alternative to the French Wine Coca, a concoction Dr. Pemberton used to cure his addiction to morphine. Dr. Pemberton promoted his new product as having a variety of health benefits, claiming that it was a cure for headaches, it relieved exhaustion, and it 1-30. What is the decision facing Coca-Cola? 1-31. What factors are important in understanding this deci- sion situation? 1-32. What are the alternatives? 1-33. What decision(s) do you recommend? 1-34. What are some ways to implement your recommen- dation? calmed nerves. This mixture, which would eventually evolve into Coca- Cola, was primarily sold in pharmacies. However, instead of promoting it as a medicine, Dr. Pemberton decided to sell it as a fountain drink. Baad on Margot Sanger-kat, "The Decine ef se Soa-The Dep in Seda Consumion Repesents the Singe Largest Chunge in the Ametcan Diet in the Last Decad Na York Timas Deter 2, 2015, planyins.com/2015100lpahoheda-indsnytruggles conunaaschang eDjaccessad Apr 2, 201 Oate Suntun, Cke Contronts s B Fat Pobkm Inie the Rulanch a Ameica's Na 1 Sat Di Scomberg Bushessila y 31, 2014. nmpolbiomberg.camihowsarides/2014-07-31kaca-cola dacinehh-concams-planch pcemed Api 2, 201 The he Real Thing? Coca-Cal's Saoet Formula Tcovand ne, ie. Fatrary 15, 2011, uhonstdin com20onStis-heingcoaestomla-dacovand ccessed Ap3, 201e