Secret Formula: The Inside Story of How Coca-Cola Became the Best-Known Brand in the World

654 Pages·2015·8.49 MB·English

by  Frederick Allen

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Secret Formula
FREDERICK ALLEN
This book is dedicated to my mother,
Martha Cherrington Allen,
who gave me a love of words and ideas and storytelling.
CONTENTS
Introduction: Red Scare
One: Stirrings
Two: Dope
Three: Dobbs
Four: Bottled-Up Anger
Five: “Get Your Readiness”
Six: Short Sales
Seven: Pepsi
Eight: War
Nine: Black and White
Ten: Politics
Eleven: “Octogenarians!”
Twelve: New Coke
Image Gallery
Notes
Bibliography
Index
Acknowledgments
About the Author
Introduction
RED SCARE
Prince Alexander Makinsky, the Coca-Cola Company’s legendary man in Paris,
was losing ground quickly.
In the winter of 1950, the French government threatened in all seriousness to
outlaw the sale of America’s leading soft drink. Makinsky, a Russian aristocrat
with a reputation for limitless charm and guile, took charge of the company’s
defenses. Born in Persia in 1900, raised in Baku on the Caspian Sea by a British
nanny who taught him flawless English, educated in Moscow and Paris, Alex
Makinsky was a formidable character. He’d spent the years before World War II
working for the Rockefeller Foundation as a political operative in France,
Portugal, and the United States, making no secret of his close ties with American
intelligence. During the war, he helped scientists escape German occupation and
flee to the West by an underground route through Lisbon.
At a dinner party in 1946, Makinsky asked the guests in his Paris apartment if
he should accept an offer to become Coca-Cola’s top overseas lobbyist. “I was
the only one who voted no,” he joked breezily afterward, “so I took the job.”
Makinsky began traveling for the Coca-Cola Company to hot spots in Europe,
the Middle East, and South America. With his tidy moustache and tailored suits,
wearing the sort of heavy-rimmed glasses that his good friend and neighbor
Coco Chanel made famous, he was the very picture of worldliness, as familiar
with diplomacy and protocol as a foreign minister. Makinsky prided himself on
knowing monarchs and heads of state on a first-name basis. He counted many of
them, from Franco to Farouk, as personal friends. Holding court in the elegant
back bar of the Ritz Hotel, across the Rue Cambon from Coca-Cola’s Paris
office, Makinsky loved to smoke slender, elegant cigars, sip champagne, and
weave intrigue.
Ordinarily, a showdown with a government was the sort of challenge he
welcomed, but this one was different. An unlikely coalition of Communists,
winemakers, and intellectual conservatives were united in a desperate struggle to
keep Coca-Cola off the French market, and the ferocity of their attack had left
Makinsky shaken. The problem was not the product itself. At the moment, the
company was selling only a few hundred cases a year in all of France. The
average Frenchman in his corner cafe, accustomed to the familiar smells of
anisette, strong coffee, and Gitanes cigarettes, had never so much as tasted a
“cola.”
It was more the idea of Coca-Cola that triggered the trouble. Thanks to its
familiar red logo and all-American image, Coke had become the lightning rod
for a surge of resentment against the United States all across Europe and
particularly in France. Makinsky worried that Coke frightened “not only our
competitors, but also the great majority of French citizens who do not want to be
‘Americanized,’ and who consider our advertising as representative of what an
‘Americanized Europe’ is likely to offer.”
By early February 1950, five separate ministries of the French government
were conducting investigations of Coca-Cola. Turning up the heat, customs
authorities suspended the company’s import license, and the police brought
criminal fraud charges against Coca-Cola’s bottlers in Paris and Algiers. Most
ominous of all, the secret police began shadowing Makinsky and his top
deputies. Investigators in the French Interior Ministry opened dossiers on them,
and there was evidence that someone was tapping Coca-Cola’s office telephones
and intercepting the mail. One of the company’s Parisian lawyers, Pierre Gide,
grew so frightened he started using an alias when he called the office.
In an especially chilling incident, Makinsky’s number-two man, Alfredo
Schvab, got a phone call at the office one afternoon from his wife. A man
claiming to be Schvab had called the headmistress of the school where they sent
their ten-year-old daughter, Isabelle, and made arrangements to pick her up after
classes and take her to the cinema. Suspicious, the headmistress had Isabelle
peek out the window from behind a curtain when the man drove up. “No!” the
girl said. “That’s not my father.” As the headmistress and a teacher hid Isabelle
inside, Schvab raced to the school just in time to see a sedan pulling away. He
got the license number, and a contact in the police department told him it was a
counterfeit plate used by a roughneck element in the Communist Party.
Unsettled by the events, the usually buoyant Makinsky warned Coca-Cola’s
top management that the company was in “imminent peril” of losing the battle of
France.
In Atlanta on the afternoon of Friday, February 10, 1950, Pope Brock considered
the latest bad news from abroad.
As Coca-Cola’s general counsel, the gray-haired, sixty-one-year-old Brock
had the unhappy duty of deciding what to do next. A defeat in France, he knew,
had the potential of derailing the company’s ambition to become a worldwide
business. In the years after World War II, Coke had expanded its presence to
seventy-six countries, but in most of them it had only a fragile toehold. Its
operations in many places were laughably rudimentary. The field man in
Colombia, for instance, put $28 on his expense account after he had to buy
sneakers for his barefoot sales force.
In the past year, Brock calculated, less than a quarter of the company’s $230
million in sales had come from outside the United States. Foreign profits were a
meager $3 million. Coke faced intense resistance almost everywhere from the
producers of beer, wine, aperitifs, fruit juices, mineral water, and other soft
drinks. Every region seemed to have a domestic beverage whose owners were
rich and politically well connected, and who made mischief for Coke in the
courts and regulatory agencies. If the special interests in France succeeded in
banishing Coca-Cola, the dominoes would begin to fall. Europe might be lost for
a generation.
The looming disaster in France rattled the top men in Coca-Cola Export, the
company’s overseas arm headquartered in New York. Much to Brock’s disgust,
they were issuing memos expressing “alarm” and warning that it might be “a
grave mistake” to press ahead.
Like many of the Georgia-born executives at Coca-Cola’s boxy, Spartan home
office on Plum Street in Atlanta, Brock viewed Export as a maverick operation
whose officers got to Manhattan, developed airs, and began to fancy themselves
just a little better acquainted with the ways of the world than their country
cousins. After growing up dirt poor in the little hamlet of Avalon, Georgia, and
working his way through college and law school, Brock carried an ample chip on
his shoulder, and his contempt for his counterparts at Export was thorough. He
had a particularly dim view of the president of Export, Jim Curtis. A fellow
Georgian, Curtis had “gone native” in Manhattan, and his principal hobby was
symbolized by the Stork Club ashtray he kept on his desk. Brock understood the
dire prospects in France, but this was not the time for panic or self-protection. It
was time to show some gumption.
Brock’s rumpled appearance, spectacles, and gentle drawl concealed a
belligerent temperament that now rose bristling to the surface. The moment had
come, he decided, to get off the defensive, raise the stakes, and bring the French