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Friday, January 06, 2006

Coca Cola

"Coke? or Pepsi?"

Which are you? It seems you are either one, or the other. Nobody likes both. If you DO drink both, you still prefer one over the other.

My wife and I are at a restaurant. The server says, "Care for something to drink?" My wife says, "Coke, please." The server says, "Is Pepsi OK?" She asks, "What else've you got?" She will NOT drink Pepsi. Just doesn't like it. Me? I will drink both, but I prefer Pepsi.

Opposites attract, I guess.

We were at one of those hundreds of festivals they have in Northern California a few years ago. They had the little booth set up with the Coke versus Pepsi challenge. (I know they used to do that in the mid 70s; I was surprised they were still trying to settle that debate decades later.)

Though they want you to believe that the challenge is unbiased, the bias comes in after you have made your selection. I walked up to the stand and the woman poured two small plastic cups with the caramel colored soft drinks from bottles that were enclosed in hoods so you couldn't see the brand names.

I took a sip from the cup on the left, swished it around a bit, and swallowed. Then I took a sip from the cup on the right, swished and swallowed. "Which do you prefer?" the woman asked cheerfully. "The one on the right," I proclaimed. She lifted both hoods simultaneously, revealing that my soft drink of choice was the Pepsi, and she trumpeted, "PEPSI!!" for all to hear. She applauded me on my selection, and others who were standing around joined in. She replaced the hoods.

Then my wife stepped up. The woman drew the hooded bottles beneath the table, (presumably to possibly switch them, or not,) and returned them to the table top, where she proceeded to pour out two cups. My wife drank from the left cup, then from the right, and put both cups down. "Which do you prefer?" the woman asked cheerfully. "The one on the right," stated my wife.

Without saying a word, the woman raised the hood on the right bottle just enough for us to see that she had chosen the Coke, and then lowered it again. I also seem to recall her giving my wife quite a GLARE, however perhaps I was mistaken. Anyway, the reaction you get from your choice really seems to depend on whether or not you choose the "right" product.

Anyway, I digress.

Taking stock of Coke

One day I asked my wife what company she'd invest in if she were to want to buy stocks. She said, "I don't know. Probably Coke."

I asked why, and she said, "Why not." That's one of the things I love about her - she doesn't hold back.

So I asked myself, well, why not? The Coca Cola company has been around since the 1880s. They make a great, popular product, and you see it everywhere. It's not going out of business any time soon, so let's invest in it.

Coke, but which one?

When I started my initial investigation into Coke, I discovered an interesting thing. There were TWO companies available - the Coca Cola Company, and Coca Cola Enterprises. Which is which, and what's the difference? Turns out that Coca Cola Enterprises is the bottling company that packages Coke soft drink products, and Coca Cola Company is everything else, (the marketing, research and development, advertising, etc.) So which did we want? When I thought about what made Coke such an exciting candidate, my thoughts were not so much about the actual soft drink, and certainly not about how it got into the bottles. Rather, when I think of Coke, I think of the ads we grew up with.

Who could forget these slogans?

1963 Things go better with Coke.
1970 It's the real thing.
1971 I'd like to buy the world a Coke.
1976 Coke adds life.
1979 Have a Coke and a smile.
1982 Coke is it.
1988 Can't beat the feeling.
1989 Can't beat the real thing.
1993 Always. Coca-Cola.

I knew that the Coca Cola "wave" was more than just the carbonated beverage in the odd shaped green bottle, it was the image. Coke was everywhere. Do a search on eBay for Coke or Coca Cola and you'll find tens of thousands of items for sale that have the Coke logo. For us, the Coca Cola Company was about more than just the cola, and that was what we wanted to invest in.

By this time in our lives, my career was taking off, and I was in a position to buy more than just ten shares of a company. Coke was selling for about $70 a share, so I figured 15 shares should be a good initial investment. In the summer of '97, my wife and I became proud shareholders in the Coca Cola Company.

It was time to ride the "wave."

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