For God, Country, and Coca-Cola Read online

  PRAISE FOR MARK PENDERGRAST’S

  For God, Country & Coca-Cola

  “In For God, Country & Coca-Cola, Mark Pendergrast has written an encyclopedic history of Coke and its subculture, and used Coca-Cola as a metaphor for the growth of modern capitalism itself. His research and storytelling skills are prodigious.”

  —Washington Post

  “A meticulously researched history. . . . [Pendergrast] aggressively sets the record straight about the birth of Coke, shattering company myths.”

  —New York Times Book Review

  “A detailed and marvelously entertaining history . . . a book as substantial and satisfying as its subject is (at least in nutritional terms) inconsequential.”

  —Los Angeles Times

  “Behind the glitz and fanfare, the bubbly brown beverage has had a tortured and controversy-filled history. It is meticulously chronicled in a new account, For God, Country & Coca-Cola.”

  —The Wall Street Journal

  “A ripping good story of more than a soft drink or a company, this book is about the whole of America. It may be the greatest American story ever.”

  —The New York Observer

  “In For God, Country & Coca-Cola, author Mark Pendergrast combines lively writing and extensive research to tell the story of the caramel-colored drink that grew into a worldwide corporation and cultural phenomenon. Like its subject, Pendergrast’s entertaining book can claim to be the real thing.”

  —USA Today

  “The book is full of wonderful stories and tidbits. . . . [W]hen Pendergrast reports the Cokelore he has gathered so assiduously, he is superb.”

  —Washington Monthly

  “As Atlanta native Mark Pendergrast tells us in For God, Country & Coca-Cola, an obsession with growth has been a company hallmark for most of the past century. Pendergrast’s account is a good deal more intriguing than the sanitized corporate history Coke peddles at its World of Coca-Cola museum.”

  —Business Week

  “By the time we move on to Coke’s globe-drenching present, we have learned to trust Pendergrast’s thorough research, lively style, and sense of perspective. [His book] is an epic, unbelievably grand in scope and implication.”

  —Valley News

  “It is easy to trivialize soda . . . but as Mark Pendergrast demonstrates, to the people at Coke it is a deadly serious business. . . . He succeeds admirably in demonstrating . . . how Coke conquered the world.”

  —Philadelphia Inquirer

  “An excellent and entertaining book! I read this book and simply couldn’t put it down! I bought 8 copies of it to give to family and friends as gifts. I’ll never look at a Coca-Cola product the same way again. From a business or historical perspective, this is a great read!”

  —Amazon customer review

  FOR GOD, COUNTRY

  &

  COCA-COLA

  FOR GOD, COUNTRY

  &

  Coca-Cola

  The Definitive History

  of the

  Great American Soft Drink

  and the

  Company That Makes It

  THIRD EDITION: REVISED AND EXPANDED

  MARK PENDERGRAST

  BASIC BOOKS

  A MEMBER OF THE PERSEUS BOOKS GROUP

  New York

  Copyright © 2013 by Mark Pendergrast

  Published by Basic Books,

  A Member of the Perseus Books Group

  All rights reserved. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address Basic Books, 250 West 57th Street, 15th Floor, New York, NY 10107.

  Books published by Basic Books are available at special discounts for bulk purchases in the United States by corporations, institutions, and other organizations. For more information, please contact the Special Markets Department at the Perseus Books Group, 2300 Chestnut Street, Suite 200, Philadelphia, PA 19103, or call (800) 810-4145, ext. 5000, or e-mail [email protected].

  Library of Congress Cataloging-in-Publication Data

  Pendergrast, Mark.

  For God, country and Coca-Cola : the definitive history of the great American soft drink and the company that makes it / Mark Pendergrast.—Third Edition: Revised and Expanded.

  pages cm

  Includes bibliographical references and index.

  ISBN 978-0-46504-699-7

  1. Coca-Cola Company—History. 2. Soft drink industry—United States—History.

  I. Title.

  HD9349.S634C674 2013

  338.7'663620973—dc23

  2012051356

  10 9 8 7 6 5 4 3 2 1

  ~ 1916 ~

  Business has its Romance. The inner history of every great business success is just as stirring and fascinating as the most imaginative story ever told. Real success never comes easy. . . . Progress has been achieved only through continual struggle and hard, patient work. It has called for ingenuity and resource of the highest order, the courage that accepted no defeat, the endurance that wore down all opposition, the confidence that overcame every jealous libel.

  And such has been the history of Coca-Cola.

  —“The Romance of Coca-Cola” (booklet)

  ~ May 2 1, 1942 ~

  Since 1886 . . . changes have been the order of the day, the month, the year. These changes, I may add, are partly or wholly the result of the very existence of The Coca-Cola Company and its product. . . . They have created satisfactions, given pleasure, inspired imitators, intrigued crooks. . . . Coca-Cola is not an essential, as we would like it to be. It is an idea—it is a symbol—it is a mark of genius inspired.

  —Letter from advertising man William C. D’Arcy

  ~ March 24, 1959 ~

  Please, Mr. Kahn, you’ve written some excellent articles and profiles, but why all this effort spent on Coca-Cola? I can’t conceive that it could be interesting to enough people to be worth your using all that paper, all those thousands of words, and hours of labor to write it. In addition, I consider it a most noxious drink.

  —Letter to E. J. Kahn Jr. in response to a series of articles on Coca-Cola in the New Yorker

  ~ July 10, 1985 ~

  Why read fiction? Why go to movies? Soft drink industry has enough roller coaster plot-dips to make novelists drool.

  —Jesse Meyers in Beverage Digest special edition announcing reintroduction of original Coca-Cola

  DEDICATED TO

  Irene Lilienheim Angelico and Abbey Jack Neidik, film documentarians extraordinaire, creators of The Cola Conquest

  AND TO THE MEMORY OF

  Roberto C. Goizueta, Coca-Cola CEO and missionary,

  AND

  E. J. Kahn Jr., Coca-Cola chronicler

  CONTENTS

  Preface

  Prologue: A Parable (January 1, 1985)

  PART I: IN THE BEGINNING (1886–1899)

  1Time Capsule: The Golden Age of Quackery

  2What Sigmund Freud, Pope Leo, and John Pemberton Had in Common

  3The Tangled Chain of Title

  4Asa Candler: His Triumphs and Headaches

  5Bottle It: The World’s Stupidest, Smartest Contract

  PART II: HERETICS AND TRUE BELIEVERS (1900–1922)

  6Success Under Siege

  7Dr. Wiley Weighs In

  8The Sinister Syndicate

  9Coca-Cola’s Civil War

  PART III: THE GOLDEN AGE (1923–1949)

  10Robert W. Woodruff: The Boss Takes the Helm

  11A Euphoric Depression and Pepsi’s Push

  12The $4,000 Bottle: Coca-Cola Goes to War

  13Coca-Cola Über A
lles

  PART IV: TROUBLE IN THE PROMISED LAND (1950–1979)

  14Coca-Colonization and the Communists

  15Breaking the Commandments

  16Paul Austin’s Turbulent Sixties

  17Big Red’s Uneasy Slumber

  PART V: THE GO-GO GOIZUETA ERA (1980–1997)

  18Roberto Goizueta’s Bottom Line

  19The Marketing Blunder of the Century

  20The Big Red Machine

  21Global Fizz

  PART VI: QUENCHING ALL THIRSTS (1997–2013)

  22Ivester Inherits a World of Trouble

  23Daft Dilemmas

  24Turnaround

  25Surging Ahead

  26World Without End?

  Appendix 1: The Sacred Formula

  Appendix 2: Coca-Cola Magic: Thirty-Five Business Lessons

  Note on Sources

  Acknowledgments

  Index

  PREFACE

  This book has been a kind of “roots” project for me. Since both sides of my family lived in Atlanta from the late nineteenth century on, I suppose it was inevitable that Coca-Cola would intersect our lives many times. My paternal grandfather, J. B. Pendergrast, owned a drugstore at Little Five Points, where he regularly served the soft drink to Asa Candler, the first Coca-Cola tycoon. J. B. testified amusingly about Coke’s nicknames in an early, important Coca-Cola trial, then invested in the Woodruff Syndicate’s takeover of the company in 1919. Unfortunately, J. B. sold the stock a few years later in order to build a house. The most intriguing family story concerns the day young Robert W. Woodruff and his friend Robert W. Schwab discussed Helen Kaiser’s allure as they sat outside her home. “Well,” Woodruff said, “I think I’ll go propose to her right now,” awaiting a protest. “Go ahead,” Schwab answered, feigning lack of interest. When Woodruff returned a few minutes later, he said, “She turned me down. I guess you’ll have to marry her.” Schwab did, later becoming my maternal grandfather.

  If Woodruff had married her, perhaps I would be a wealthy man today—or I might not be here at all, since Woodruff, who directed Coca-Cola’s fortunes from 1923 until his death in 1985, had no children. It’s just as well that things worked out the way they did, though, since I’ve enjoyed taking a more objective view of the Company and its entertaining role in world history. I hope you will, too.

  —Mark Pendergrast

  Prologue: A Parable (January 1, 1985)

  The boss was a very old man, near death. Though his mind still ticked over a lifetime of executive decisions, it was trapped in a decaying body. All of his senses were shutting down. He could see only dimly, and his cigar, a trademark for most of his life, hung unlit from a slack mouth. His hearing, too, had nearly failed, and he seldom spoke in more than a monosyllable.

  Robert Woodruff was ninety-five years old, four years younger than the soft drink he had made the world’s most well-known, cherished product. For more than sixty years, Woodruff had steered the fortunes of Coca-Cola. Even in these last few years, as he and the drink approached the century mark, his approval had been sought for every major decision in the Company.

  A younger man in a pinstripe suit approached the old man’s bed. He had come alone to speak with the Boss, asking the attendants to leave the room. He sought the old man’s blessing, looked for his benediction on the most revolutionary decision ever to be made at Coca-Cola.

  Chemical engineer Roberto Goizueta, the Cuban native who had become the first foreign-born CEO of The Coca-Cola Company, planned to change the formula of the drink just a year short of its hundredth anniversary. Though the man in the pinstripes knew that tampering with the world’s most closely guarded secret formula was risky, he had sound business reasons for doing so. Now, he slowly and systematically laid them out for the Boss, practically shouting to make sure that he was heard.

  Motionless, Woodruff listened.

  The story the younger man told was full of statistics, percentage points, market share analysis, and talk of blind taste tests. But the essential point was simple, and Goizueta repeated it loud and clear: most soft drink consumers preferred the taste of Pepsi to that of Coke. It was a slim margin, but it was there. And no matter how much Coke outspent Pepsi on ads, no matter how great their distribution system, Pepsi’s market share kept creeping higher. The competition already sold more in the supermarkets, and it was advancing on Coke’s superior fountain and vending sales.

  The time had come to modify the taste of Coca-Cola. The drink had been good in its time, but times change, tastes change, industries change, and nothing in the business world is sacred. The chemists at Coke had devised a new formula that consistently trounced Pepsi—as well as Coke—in blind taste tests. Goizueta emphasized that the time was ripe, in fact overdue, for a New Coke. It simply had to be.

  Finally, the younger man fell silent, intent on the old man’s reaction. The cigar hung unmoved. The eyes glistened. Outside the window, a slight rain fell on the first day of the new year.

  Woodruff’s eyes slowly brimmed; the cigar trembled. In the silence, a grandfather clock ticked off fat, slow seconds. Finally, the Boss sighed. “Do it,” he rasped, and his eyes overflowed.

  Goizueta smiled. Woodruff had always liked him, had picked him as a successor. The two men used to lunch together; they had a special understanding, a bond. It was important that the Boss give his approval. People said the old man hated change, but Goizueta knew he just needed things explained in their simplest terms. This was just like Diet Coke, and look at how well that had done. Goizueta thanked the Boss, said he would be back to see him soon, and left.

  Roberto was convincing, not so much by his facts and figures, but by his earnestness. He must be right, but that didn’t mean that the Boss had to live to see his sacred formula revised. The old man stopped eating. Two months later, a month before New Coke was made public, Robert Woodruff died. He never knew the uproar that the flavor change was to create. It is not beyond imagination, however, that somewhere in his steadily ticking brain, he guessed.

  For three months, the stubborn management at Coca-Cola was besieged daily by thousands of phone calls and hundreds of pounds of letters, all begging for the old drink back. The press was full of outraged reports. While Goizueta waited for the uproar to subside, it only intensified.

  It became clear that the Cuban and his management team, his marketing surveys, and his advertising men had miscalculated. Taste wasn’t the issue. It didn’t matter whether New Coke went down more smoothly.

  The letters, oddly reminiscent of those sent to the company by GIs during World War II, clearly spelled out the real issue. Coca-Cola was an old friend, a piece of everyday life, a talisman of America, a kind of icon. But unlike the wartime letters, which expressed heartfelt gratitude, these contained feelings of betrayal:

  “Changing Coke is like God making the grass purple.”

  “I don’t think I would be more upset if you were to burn the flag on our front yard.”

  Roberto Goizueta and his cohorts were taught a quick, incisive business lesson, and they finally capitulated, bringing back the old Coke to a grateful world.

  The issue was not taste. The issue was not marketing surveys or focus groups.

  The issue was God.

  The issue was Country.

  The issue was Coca-Cola.

  Part I

  In the Beginning

  (1886–1899)

  A hot day in August 1885.*

  The tall, bearded old man hesitated before crossing Marietta Street, one of Atlanta’s busy thoroughfares. Horses and buggies clattered on the cobblestone; prosperous businessmen hurried past. Elegantly dressed women with parasols strolled to Jacobs’ Pharmacy on the corner for an ice cream soda. Newsboys hawked the papers, screaming, “Read all about it! Whisky Ring Fights Sin Tax! Temperance Workers Meet! Anti-Prohibition Speech at Opera House a Flop! Read all about it!”

  “I’ll take a paper, son.” Pursing his lips, temporarily forgetting the busy street, the man read. There was
the usual sensationalism. A local suicide. An attempted lynching. The birth of triplets.

  Impatiently, he rifled through the paper. Ah, here was an editorial laying into the liquor license. “It is guilty, at the bar of God and humanity, of this great crime: that it creates, fosters, solicits, incites, stimulates, and multiplies intemperance. The open barroom holds the whisky glass to every man’s lips at every corner.” No doubt about it. Atlanta would go dry; it was only a question of time.

  The street cleared momentarily. Folding his paper under his arm, the elderly man crossed the street before another buggy bounced through the intersection. As he put his key into the lock at 107 Marietta Street, a young man briskly lifted his hat on his way by. “Good day, Dr. Pemberton. Hot enough for you, sir?” The old gentleman nodded and smiled. Everyone in Atlanta knew and respected the kindly old patent medicine man, and most took one of his remedies for their cough, dyspepsia, headache, sexual debility, or whatever else ailed them.

  As Pemberton entered his laboratory, he looked with satisfaction at his fresh supply of coca leaves, straight from Peru, and at the filtering system he had set up to produce coca extract. He was experimenting with a new concoction, one that he hoped he could sell as a temperance drink and medicine, because the town was in hysteria over the evils of alcohol.

  Suddenly Pemberton doubled over with pain. It was his stomach again—heartburn or his ulcer flaring up. His bones ached with rheumatism. Still bent, he fumbled for his secret case in a false-bottomed drawer. Shaking, he filled the hypodermic needle, turned it to his arm, and slowly pushed the plunger. With a deep sigh, he carefully put the needle and materials away and prepared for his experiments.

  As he began the experiments that would lead to the invention of Coca-Cola, Dr. John Stith Pemberton was fifty-four years old. He looked at least ten years older. And he was addicted to morphine.

  __________________

  * The mini-dramas introducing each section of the book are fictional re-creations of likely events and should be taken as such.