Coca-Cola in Latin America

History

From National Icon to International Ideology

• Established 1885 in Atlanta.

• Bottling franchise begins in 1899. Bottling rights are free, flavor syrup costs $1 a gallon.

• Original recipe includes kola nuts and cocaine.

• Cocaine is removed in 1903.

Coke Goes South

• Coca-Cola’s first overseas bottling plants are located in Canada, Cuba and Panama in 1906.

• Mexico- 1926• Peru- 1936• Columbia- 1940• Chile- 1941• Argentina & Brazil- 1942

“By 1927 [Coke] was being sold

in Honduras, Columbia, and Mexico, along with Haiti and Burma. The next year it debuted in Venezuela, and by 1942 it had reached Nicaragua, Argentina, Brazil, Costa Rica and Uruguay. Today, Mexico has the highest per capita consumption of Coke in the world, along with Iceland.”

• * www.alternet.org/story.html?StoryID=13226

Bottling Franchises

• Coca-Cola sells its syrup to independent bottling companies around the world.

• Many of the large franchises in countries like Guatemala, Honduras, Haiti, and the Dominican Republic originated from large United States corporations, such as United Fruit.*

• Bottling franchises in Ecuador, Mexico, and Trinidad went to pre-existing national corporations.

• *Pendergrast, p. 168

Coca-Cola Bottling in Mexico

• Manuel L. Barragán and Herman H. Fleishman establish first Mexican bottling franchise in 1926.

• Within 25 years, one bottling site expanded to 49.

• Panamerican Beverage Inc. (Panamco) became the largest Coca-Cola bottling franchise in both Mexico and Latin America.

Production Growth

• 1926- Bottling plants produced 10 bottles per minute.*

• 2003- Mexican bottling production reached an output of 205,216 bottles per minute.**

*- http://www2.coca-cola.com/ourcompany/cfs/cfs_mexico.html

**-http://www2.coca-cola.com/ourcompany/cfs/cfs_mexico.html

Recent Developments

• Panamoc merged with FEMSA in 1998, creating the largest beverage company in Latin America.

• FEMSA’s $3.6 billion acquisition of Panamco was the largest in Mexican corporate history.

Labor Disputes

Coca-Cola and Bottling Franchises in Latin America

Employment

• In Mexico, Coca-Cola bottlers employ 50,000 people.

• In Columbia, bottlers directly employ 10,000 people.

• In countries with a small industrial base, Coca-Cola can be one of the major industrial employers.

Guatemala

• In 1976, Guatemala had one Coke bottling plant which employed 350 people.

• Between 1978 and 1980, a union which only represented some of the workforce saw 8 members assassinated by right wing paramilitaries.

• Still, with massive national and international solidarity, the union won recognition and occupied the plant for over a year, forcing Coca-Cola to take over the plant directly and keep it open.

• “We prefer to die with dignity than live at the hands of foreign exploiters.”*

• *Levinson-Estrada, 1994.

Columbia• In Columbia, the labor union SINALTRAINAL has brought suit in the

U.S. with the aid of U.S. unions against Panamco-Columbia, Bebidas y Alimentias, and the Coca-Cola company for the use of right wing para-militaries against union workers. According to the union, at least six of its leaders have been killed by death squads with alleged links to plant managers.

• “There is no question that Coke knew about, and benefits from the systematic repression of trade union rights at its bottling plants in Columbia”*

• “Colombian labor union 's oft-repeated allegations against The Coca-Cola Company and its Colombian bottling partners are completely false. They are nothing more than a shameless effort to generate publicity using the name of our Company, its trademark and brands.”**

* Bresnahn et al, 2001.**http://www2.coca-cola.com/presscenter/viewpointscolombian_include.html

International Solidarity• In Guatemala, the Sisters of Providence Coca-Cola shareholders were

a key part of the pressure on Coke to reform operations there.• Boycotts by the International Union of

Food and Allied Workers Associations and other labor movements were another key part of pressuring Coke to take responsibility.

• In Columbia, the solidarity of U.S. and international unions has been a significant part of the process both in the courts, and with threats of boycotts.

• “Given the local nature and the purpose of the Coca-Cola business, we believe that calls for boycotts of our products are not the appropriate way to further any cause, as they primarily hurt the local economy, local businesses and local citizens.”*

*http://www2.coca-cola.com/presscenter/viewpoints_boycott_include.html

Advertising

Coke Targets its Latin American Market

• Coca-Cola has long sought to firmly establish their product in the hearts and minds of Latin American consumers through a barrage of images and regionally adapted advertising.

• “From the remote jungle areas of Chiapas, Mexico, to the Andean slopes of Ecuador; from the tiny thatch-roofed roadside towns of Bolivia and Peru to the sparkling major metropolises of Chile and Argentina, Coke is all over Latin America. Not only the beverage itself, but an infinite number of ads that blanket everything from billboards to shacks to government buildings to the concrete walls along mountain roadways”

• -Kari Lydersen* www.alternet.org/story.html?StoryID=13226

Coke vs. Water

• There are 78 million people without potable water in Latin America and the Caribbean.

- OneWorld America Latina, amlat.oneworld.net/article/frontpage/271/4468

• [Coke] is standardized and sanitary, providing a safe drink in parts of the world where sampling the water can be fatal.

- Pendergrast p. 461

• “Our competition is water, it’s coffee.”- Pedro Pablo Diaz, Vice President of Panamco

• The “100 meters program” aims to have refrigerated products with 100 meters of every potential consumer.

- Panamco Annual report, 1998

Demographic Strategies

• Coke has systematically designed advertising targeting teens and mothers.

• Santa and Soccer have both been used to draw in customers

• In Brazil, Coca-Cola has recently launched an advertising blitz aimed at mothers shopping in supermarkets, featuring a mother kangaroo who carries Coke in her pouch instead of a baby.

• Coca-Cola is trying to establish itself as a healthy brand for a mother to buy for her children. This is not a strategy used in the US.

• Coke also gears advertising at Latin American teens.

• Coke’s ephemeral qualities of wholesomeness, good times and good friends are the focus.

• http://www2.coca-cola.com/presscenter/av_advertising.html

• “In Chile… teen awareness of the 2001 “Uncap the Adventure” campaign was 72 percent versus 37 percent for the previous promotion aimed at the same age group. And teen participation in the program was 63 percent.”*

*- www2.coca-cola/com/ourcompany/wn20020503_summer_promotions.html

• Coke is always looking for ways to appeal to their regional demographics by launching specialized products. In Mexico and Brazil, Coke is the leading producer of guarana fruit-flavored sodas.

Universality

Speaking to all consumers in a common language: the fulfillment of

desire

• These late 1940s Brazilian ads evoke Coke consumption as an international language, thereby including Brazil in a sphere of cultural empire.

• “Ever since the Fifties, Coke has used “Pattern Advertising” which, with little or no modification, can appeal to any culture in the world.”*

*- Pendergrast, p. 464

• This Ad features international youth, as well as present, and past soccer stars to create a sense of excitement and inclusiveness in the selling of Coke

• http://www2.coca-cola.com/presscenter/av_advertising.html

Coca-Cola Christmas

• “Now That’s a Drink” says Santa to a Brazilian audience, in the classic red and white garb given to him by Coke advertising executives.

• “Happiness to all of those who came from far away lands in search of a dream. Untap the Christmas spirit. Enjoy.”*

*- .http://www.pangeapartners.com/portfolio/lapiz.html

• “Christmas time in Ecuador, a heavily Catholic nation, finds the cities and campos of the country awash in nativity scenes and sparkling lights. But even more than traditional Christmas decorations, Christmas in Ecuador means Coca-Cola”*

*- www.alternet.org/story.html?StoryID=13226

Soccer and Coke

• “Soccer is a passion in Latin America… through massive sponsorship deals, Coke has declared itself the official drink of the sport. In fact, Coke has more or less declared itself the official drink or sports in general in Latin America, despite the fact that it’s… not conducive to top physical performance.”*

*www.alternet.org/story.html?StoryID=13226

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Popular Responses:

The Unsatisfied Customers

The Andrews Sisters’ “Rum and Coca Cola” (1944)

• “If a Yankee comes to Trinidad They got the young girls all goin’ mad young girls say they treat ‘em nice make Trinidad like paradise”*

*- Holden and Zolov, p. 171

Lord Invader’s “Rum and Coca Cola”

• “When the Yankees first come to Trinidad Some of the young girls were more then glad

They said that the Yankees treat them niceAnd they give them a better price”*

*- Holden and Zolov, p. 172

Responses to the murder of labor leaders.

“Coca-Cola mata!”

(Coke kills. -in reference to Columbia.)

“Coca-Cola: La Chispa de la Muerte.”*

(“Coca-Cola: The Sparkle of Death.”)*- Pendergrast, p. 332

THE END