It's the weekend, and while there aren't too many market-related stories at the moment, I dug up a real Peter Lynch sort of nugget -- on Coke.
You know, with people so health conscious these days, it's no wonder companies such as Coca-Cola and McDonald's are all rushing to the marketplace with alternatives. While it might look like they're trying to help people become healthier, the fact is that they are cashing in big time. While we can buy a can of Coke for 20 cents at Costco, water costs many times more.
Of course, the problem with "healthy" is that not only must it look good, it must also be good. Coca-Cola is getting roasted over Dasani water this weekend in England. Incidentally, this brand of water is also found in nearly all of the fast food places that feature Coke, namely McDonald's here in Canada. And now we know it's not the real thing...
Dasani recall leaves Coke dangling over murky water
By Adam Jones and Betty Liu
Published March 19 2004 20:11(FT.com) - David Blaine is not the only American export to have misread the UK market in recent months. With the Dasani purified water debacle, Coca-Cola has emulated the US illusionist.
Just weeks after Mr Blaine was ridiculed by Londoners for dangling in a box above the River Thames, a stunt that was viewed more generously in his homeland, Coca-Cola has found itself pilloried for attempting to sell Dasani, an enhanced tap water that was deemed perfectly acceptable in the US.
"Sidcup Spring", the mockers called it, reflecting both the location of the bottling plant and the episode of Only Fools and Horses, the classic television comedy show, in which tap water is cheekily marketed under the brand name "Peckham Spring".
Whereas Mr Blaine completed his trick as planned, however, Coca-Cola has given its critics fresh ammunition by rushing into a voluntary product recall after discovering that Dasani contained illegal levels of bromate, a chemical that could increase the risk of cancer.
The unanswered question last night was how far up the corporate ladder the consequences would reach. The fault certainly lies with Coca-Cola itself, rather than Coca-Cola Enterprises, the member of its bottling network that actually makes Dasani in the UK.
The bromate problem was a consequence of added ingredients supplied by Coca-Cola in the same way that it supplies syrupy concentrate to bottlers for them to make cola.
The legal limit for bromate content is 10 parts per billion, Coca-Cola said. The Dasani it tested prior to the recall contained as many as 25 parts.
The Food Standards Agency, which regulates food safety in the UK, said there was no immediate risk to public health.
It also said that the increased cancer risk to anyone who had drunk Dasani was likely to be "very small". Coca-Cola has a free telephone help line for consumers at 0800 227711.
Coca-Cola sells more than 200m cases of Dasani annually around the world. The company said it is conducting similar tests on Dasani in other markets as a precautionary measure.
Coca-Cola Enterprises said the recall would not affect its balance sheet. The company said it had already tested its Dasani water in North America and found "no issue at all" concerning bromate.
Coca-Cola said this incident should not hurt the Dasani water brand as "consumers will understand the facts that this is an isolated incident . . . and it won't have implications outside the UK".
However, it said it was too early to say whether Dasani would be relaunched in the UK. "Clearly the focus right now is on withdrawing it," an official said.
Nor was there any immediate official estimate of how much the recall would cost.
The withdrawal began on Friday and was likely to be 80 to 85 per cent complete within 24 hours.
But while the cost of the withdrawal might not be great, the implications for Coca-Cola's attempt to reduce its reliance on sugary carbonated drinks - a particular target for criticism in the obesity debate - could be substantial.
Coca-Cola still has hopes of expanding Dasani in Europe but its ambitions for the UK may now be unrealisable.
Allyson Stewart-Allen, a London-based marketing adviser, said: "It is now going to be next to impossible for Coke to relaunch Dasani in the UK."
Neil Hedges, chairman of Fishburn Hedges, the public relations and corporate reputation consultancy, also felt a UK relaunch "may be just too much for such a new product."
This is in spite of the fact that Coca-Cola has followed best practice in product recalls by acting swiftly.
"They have done all the right things in terms of withdrawing everything very promptly," he said.
04.03.21 11:29 #