Coca-Cola’s decision to eliminate benzoate salts
As many people around the world commonly know it, Coca-cola is a company that specializes in beverage production. It is located in Atlanta, Georgia. This company has its main interests in manufacturing, retailing, and marketing of nonalcoholic beverages. It was established by John Stith Pemberton in 1886 and sold to Asa Griggs for 2300 dollars three years later, who then incorporated the Coca-Cola Company in 1892 in Atlanta (Rotzoll, 1994). This company mainly produces syrup concentrates, which are then supplied to various bottling agencies around the world. As a result, its activities led to the company becoming the leading plastic waste generating company. This company enjoys great customer brand loyalty as compared to its competitors. However, it faces stiff competition from Pepsi, which is its main competitor. The composition of the products of this company remains a highly guarded secret. Despite this, people started considering “healthier” soft drinks other than carbonated ones. With that, this company has been affected to some extent over the years. A good example can be derived from the fact that in 2005 the consumption of soft drinks in Canada dropped by 2% (Dhar et al., 2005). Its main rival, Pepsi, also enjoyed distinctive command in the people who consumed noncarbonated drinks. Despite the success that this company has been enjoying, to remain a great and successful institution has many challenges. For that reason, strategic decisions have to be made to stay in business and successful. Some of the decisions include investment in employees, good food safety and quality policies, marketing strategies, and brand loyalty strategies.
In this paper, I will discuss Coca-Cola’s decision to eliminate benzoate salts from many of its beverages except Sprite and Fanta. Since everyone prefers a drink that causes no harm to their health, adopting this decision improved this organization’s position. Since this element is a potent carcinogen, eliminating it from the beverages meant that people were more confident in the company’s products and increased consumption, which in turn improved its earnings. This organization aimed at providing safe beverages and had experienced lawsuits over that before, the stakeholders supported this decision. However, benzoate salts were not eliminated in Fanta and Sprite, and that shows that some stakeholders took part in the decision-making process.
Initially, it is said that the original recipe for coca-cola contained cocaine (Pendergrast, 2013). This cocaine is said that it was in the form of an extract of the coca leaf, and that is what inspired the “coca” part of the name of the beverage. When this brand was established, the regulations on patent medicines were not as they are today. A person could claim that their product has health benefits even without proving its effectiveness or even its consumption risks. With time, some Americans started speaking against the inclusion of addictive components in patent medicines. With that, coca-cola had to consider reducing the amount of cocaine in their soft drinks, and in 1929 it was eliminated (Pendergrast, 2013). During that era, alcohol had not been legalized in the United States. As a result, people considered coke as an alternative to alcohol, and soon this became a popular brand.
In 2006, coca-cola was sued by parents who said that they wanted to eliminate the ingredients found in soft drinks that can make benzene, which is a robust cancer-causing agent (Yoffie & Wang, 2006). With that, this organization’s spokesman said that their priority is to ensure quality and safety through the adoption of strict food safety procedures. According to reports by the United States Food and Drug Administration, the samples of the beverages taken for benzene testing contained higher than five parts per billion (ppb) that is allowed by the federal regulations in a tap or even bottled water. However, there were no standards set for benzene in soft drinks (Yoffie & Wang, 2006). It is said that benzene can form in drinks with benzoate salts or even vitamin c in cases where some minerals exist. Additionally, exposure to heat or even light during the time these drinks are being transported or store can raise the amount of benzene formed. As a result, the FDA said that after consultations with experts, benzene consumption at the levels that they found would not bring an acute health problem or risk. Additionally, the FDA said that despite that and knowing that exposure to a carcinogen that is known has some risk, it is significant to take some precautions. Some precautions that can be taken include reading the labels on beverage bottles and storing beverages that have benzoate salts and vitamin c in a cool place and in an area where they are not exposed to direct light. In consideration of this, Coca-cola decided to adopt strict food safety precautions and eliminated sodium benzoate from many of its drinks but not Fanta and Sprite in 2010.
There are several factors involved in the decision-making process. The utilization of a step-by-step approach when making decisions is quite important since it helps a person or an organization make more deliberate decisions and thoughtful through the organization of the information available in terms of its relevance and possible alternatives. Consideration of these aspects increases the likelihood of selecting the essential alternative in different situations. The steps involved in decision-making include identifying the decision, gathering the relevant information, identifying the alternatives, checking the evidence, choosing among the available alternatives, taking action, and reviewing the decision and its effects.
Identification of the decision.
In this case, an individual or an organization notices it needs to decide and try to define clearly the nature of the decision that is to be taken. Concerning coca-cola, they noted that they were required to eliminate benzene from many soft drinks. That came from understanding the concerns that people have about benzene in soft drinks.
Gathering of the relevant information.
In this step, the collection of the necessary information before making a decision is significant. For that reason, the identification of the best sources for this information is critical. In this step, internal as well as external forces or evaluations are done. Self-assessment is the main internal process that is used to gather information. On the other hand, books and other people act as external sources of information. About coca-cola, this company tried getting information from what experts on food safety said concerning benzene. Additionally, the information that the FDA gave also acted as a building block in this case.
Identification of the available and most practical alternatives.
In this step, there should be the identification of other possible ways of action. It is important to list the possible and most appropriate alternatives. With this, a decision is not tied to one route. This step gives an individual or an organization the chance to have another option if the planned one fails or does not work as expected. Coca-cola applied this step to eliminate benzoate salts from many of the soft drinks and left Fanta and Sprite.
Checking the available evidence.
In this case, we consider the possibility of the results if we carry out the alternatives to the end. We have to determine whether the identified decision will be met if we follow or execute each alternative to the end. Through this, we can see which alternatives are likely to work effectively and hence favor them. In this case, we place the alternatives in the order of their priority. In this step, coca-cola considered that and placed the alternatives in the priority level and therefore noticed which one could work better in their case.
Choosing among the available alternatives.
In this step, alternatives that work best for a person or an organization are selected. In this step, a combination of alternatives can also be chosen. In this case, the alternative considered the available evidence is more likely to be considered or chosen.
We are taking the necessary action.
In this step, the implementation of the alternative that was chosen is done. The alternative was not to eliminate benzoate salts from all soft drinks for coca-cola but in many and leave some, Fanta and Sprite untouched.
Reviewing the decision as well as its effects or consequences.
In this step, we consider the outcomes of the decision we have chosen and evaluate whether the issue has been resolved. In case the issue has not been resolved, the steps of making a new decision have to be followed. In this case, more information is gathered to avoid another case where the issue won’t be solved; for coca-cola, that was significant since it reduced the issue of lawsuits due to benzene levels in their soft drinks.
In the case of Coca-cola, the decision was not planned and deliberate. This decision needed to be done since the issue kept rising and the lawsuits created time after time. This decision utilized a defensive strategy. In this type of strategy, decisions are made to protect oneself, or an organization decides to protect itself. Although there were no given levels for benzene in soft drinks in coca-cola, the company was getting some losses since some consumers could not take the soft drinks due to their fear of the health effects of the benzene present in the soft drinks. Additionally, lawsuits were being filed against this company, and that, to some extent, could cost them. For example, paying the company lawyers to represent them in court cost them and in situations where the company had to recall some soft drinks in Japan. Additionally, these lawsuits and the public’s information could also ruin the reputation that this company had and hence make people opt for other options. In this case, coca-cola utilized a defensive decision-making strategy to stay in tune with their customers’ needs.
Several factors made this organization make this decision. Some are internal, while others are external. The internal factor influencing this organization to make this decision can be obtained from what the company said is their main aim: to provide safe and quality drinks to the people. The main priority is to provide safe and quality drinks by adopting strict food safety procedures. On the other hand, an example of an external factor that played a significant role in making this decision is lawsuits that other companies that made soft drinks had experienced and the lawsuits that coca-cola itself had experienced. For example, two companies in Atlanta were sued by parents worried about benzene in drinks, mainly consumer by kids. One of the companies was named In Zone Brands, the maker of BellyWashers, and Preston was sued. The second company is known as TalkingRain Beverage. These two companies were sued and agreed to settle the lawsuit in papers. These soft drink makers said that their product did not cause any harm by they agreed to change their ingredients and refund or even replace the drinks made before this switch. This might have prompted coca-cola to avoid such instances and the loss arising as a result; just as it had happened to the other companies in the same business. Additionally, just as required by ISO standards, coca-cola could have decided to meet these standards for Quality and Food Safety. In the making of this decision, internal and external institutional and values systems played an influential role. Influential stakeholders like the people who the company collaborates with could have also played some roles in making this decision. In this, they might have anticipated that they might end up losing more customers in a case where they did not eliminate the cancer-causing component from their drinks.
Maximization of profit is one thing that each company aims to do. However, profits should not be made at the expense of people’s lives or even resources. For that reason, it is important to consider the health of people in cases where we provide food services. Giving food that causes harm to the people is wrong and can lead to convictions or even monetary losses. However, in this case, if I were the manager making this decision, I could have used a different approach. In the case where the company had to experience losses as a result of recalling their drinks, I could have asked the workers to start producing drinks without benzoate salts and start supplying, noting the areas that we have supplied. An evaluation of the distributed drinks that contained benzoate salts could have also been performed to estimate the amount of time that we can have them finished in the market. After we have little remaining, I could have recalled the remaining and begin the drinks’ mass supply without benzoate salts. With this, the loss could have been minimized. Additionally, this company eliminated benzoate salts from many of its drinks but left Fanta and Sprite. In this case, if I was the manager performing this task, I could have eliminated these salts in all drinks without exception. This could have been the right decision since it would save the company some resources that could be used in the future to settle disputes that can arise as a result of the benzene in these two types of soft drinks. Additionally, that could improve the trust of other potential people with who we can collaborate. Additionally, I would have focused on improving our relationships with the customers, just as suggested in the stakeholder theory. I could have suggested that we produce some portion of drinks and distribute it to the customers at a subsidized price to taste our new product and enhance brand loyalty.
Every organization needs to provide the best services to its customers. For that reason, improving the quality of the products ad considering their safety is significant. Avoiding losses is also essential, and for that reason, organizations should focus on products that serve both the organization and the customers perfectly, just as coca-cola did. However, I would recommend that this company adopt other ingredients that have no impact on the health of the consumers in Fanta and Sprite to avoid lawsuits in the future.
References
Dhar, T., Chavas, J.P., Cotterill, R.W. and Gould, B.W., 2005. An Econometric Analysis of Brand‐Level Strategic Pricing Between Coca‐Cola Company and PepsiCo. Journal of Economics & Management Strategy, 14(4), pp.905-931.
Pendergrast, M. (2013). For god, country, and coca-cola. Basic Books.
Rotzoll, K.B., 1994. For God, Country and Coca-Cola-The Unauthorized History of the Great American Soft Drink and the Company That Makes It. Journal of Marketing, 58(4), p.120.
Yoffie, D.B. and Wang, Y., 2006. Cola wars continue: Coke and Pepsi in 2006. Boston, MA: Harvard Business School.