Coke Takes Neutral Stance on Olympic Protests
This is probably not the marketing opportunity the Coca-Cola Co. hoped
to get for the estimated $75 million to $90 million it paid to be
a global sponsor of the Olympics and one of three sponsors of the
torch relay. But as the 2008 Beijing Summer Games approach, Coca-Cola
has been drawn into a volatile situation.
These Olympics offer a chance to win over 1.3 billion Chinese consumers.
But the association with China, with its reputation for human rights
abuses, also threatens to tarnish the Coke brand, built for more than
a century on an association with positive events big and small.
Coke's reaction to the turmoil has been delivered in carefully worded,
politically neutral statements. The company has started a dialogue
with human rights groups opposed to China's control over Tibet. Coke
also has met privately with human rights groups focused on strife
in Darfur, located in an African nation with close ties to China.
Last year, before the public protests began, Coke pledged millions
of dollars in humanitarian aid for Darfur.
The torch run controversy has sapped Coke's ability to turn the event
into a marketing blitz, said John Bevilaqua, a former Coke and Olympic
communications executive who's now head of Atlanta-based Creative
"This is a situation that they're not happy about," Bevilaqua said.
"But believe me, this is just a temporary storm that they'll have
Others caution the storm is just forming. Coke is inviting continued
attacks if it stays quiet, said Paul Argenti, a corporate communications
professor at Dartmouth's Tuck School of Business. At least one major
activist group already tagged the Beijing Games the "Genocide Olympics"
and said it will picket headquarters of Olympic sponsors if they do
not step up pressure on China.
"They're [Coke] setting the bait for an NGO [non-governmental organization]
to come in and say, 'Yes, you will take a point of view,'" Argenti
said. "You can choose to be apolitical, but then we will paint you
as a monster in the court of public opinion."
Coke has been planning its Olympics marketing strategy for years.
At an analyst conference earlier this year, president and chief operating
officer Muhtar Kent said he was convinced China would become Coke's
largest market in the "not too distant future." Nothing is more important
to China than the Summer Games, he said.
"We know that the Olympics are going to be a turning point for China,
its people, and a catalyst for our connection to these vibrant consumers,"
Raising the stakes
Coca-Cola, the longest-running Olympic sponsor, has been part of the
games since 1928, when it shipped U.S. athletes and 1,000 cases of
Coke to the Amsterdam Games.
The stakes for this year's Olympics, though, could be the highest
ever. China is Coke's fourth-largest market, behind the United States,
Mexico and Brazil, said John Sicher, editor and publisher of Beverage
Digest, a trade publication. Coke commands 55 percent of the China
soft-drink market to PepsiCo's 27 percent.
Per-capita soda consumption is about 25 times greater in the U.S.
than in China, leaving Coke and Pepsi with a potentially huge market.
"In terms of future growth, China is very important for both," Sicher
Coca-Cola hopes to widen its lead over Pepsi by advertising around
the Olympics. The company paid an estimated $70 million to $75 million
to be a four-year global Olympic partner, said Jim Andrews, senior
vice president of IEG LLC, a Chicago firm that analyzes corporate
sponsorships. It also paid an estimated $5 million to $15 million
to be one of three sponsors of the torch run, Andrews said.
In addition to these sponsorship fees, Coke typically spends three
to four times as much money on Olympic advertising, promotions and
tickets for guests, he said.
The big payoff is being tied to a global event and a historic moment
for China. "Everybody wants to sell their products in China," Andrews
said. "This is a great marketing platform."
Fanning the flames
But the high profile also attracts attention Coke doesn't want. Political
and human rights activists are pressuring it and other corporate sponsors
on Darfur and Tibet.
China is the top trading partner and a major weapons supplier to the
government in Sudan, which experts say has fueled a conflict that
has killed some 200,000 people in its Darfur region.
Dream for Darfur, a New York-based group, began asking Olympic sponsors
last year to use their influence to stop the violence.
Tibet, invaded by China in 1950, flared up as an issue in March when
protests by Buddhist monks in Tibet turned violent. Pro-Tibet and
human rights groups have called for Olympic sponsors to pressure Beijing
to reopen Tibetan areas to international media and allow an independent
investigation on the recent conflict.
Coke has communicated with some pro-Tibet groups and has plans to
meet with at least one group. It would not comment about China's role
in Tibet, but issued a general statement: "The Coca-Cola Co. joins
others in expressing deep concern for the situation on the ground
in Tibet. We know that all parties involved hope for a peaceful resolution.
"While it would be an inappropriate role for sponsors to comment on
the political situation of individual nations, as the longest-standing
sponsor of the Olympic movement, we firmly believe that the Olympics
are a force for good."
On Darfur, Coke said in an e-mail response that it has met with several
organizations, including Dream for Darfur, Human Rights Watch and
Amnesty International, to "listen, share our on-the-ground activities
in Darfur and to explain what we feel is our appropriate role as a
The company said it has committed more than $7 million over the next
three years for humanitarian efforts in Sudan. It also said it is
working with the United Nations and the International Business Leaders
Forum to arrange a series of meetings in Sudan between "civil society,
business, local and national government bodies focused on doing business
in zones of conflict."
"The Coca-Cola Co. shares concern about the on-going violence and
tragic situation in Sudan," Coke said in a statement. "We appreciate
efforts to move the international community forward on the issue of
Actress and activist Mia Farrow is chairwoman of the Dream for Darfur
advisory committee. Farrow, who has met with Coke and several corporate
sponsors, said Coke has an obligation to act.
"What about morality?" Farrow asked. "Do they not have more feel-good
slogans and songs than any other company? ... They cannot claim to
have any moral standing whatsoever if they don't take some sort of
The dilemma has left Coca-Cola with two marketing strategies: keeping
a low profile for its sponsorship of the European and U.S. torch runs,
while trumpeting the ties in China.
Four years ago, en route to the 2004 Athens Olympics, the torch made
its way through Atlanta, starting at Coke's North Avenue headquarters
and ending at Centennial Park. Former heavyweight boxing champ Evander
Holyfield and more than 100 others carried the torch in an elaborate
This year, the torch traveled through London, Paris and San Francisco
with little Coke-related fanfare.
But in China, Coke has carried out a massive Olympic advertising campaign.
The day after China won the right to host the Olympics in 2001, the
company flooded the market with limited-edition celebratory soda cans.
More recently, Coke released an original song titled "Red Around the
World" that touts the Olympic torch relay, promoted an online "torch
relay" where people can win Coke souvenirs and advertised with national
TV spots featuring the torch.
It is Coke's largest-ever promotion around an Olympics "because China
has the world's biggest population and China is one of the most important
markets for Coke," said Zhai Mei, a company spokesperson in Beijing.
Meanwhile, Coke has given no indication it plans to make statements
about Chinese government policies.
Argenti, the Dartmouth professor, said Coke has to get in front of
the issues. The company should find a way to collaborate with human
rights groups, he said.
In the environmental movement, Coke has helped diffuse criticism about
its water usage by forming a partnership with the World Wildlife Fund
that included a $20 million commitment.
Human rights groups already are planning more ways to pressure Olympic
sponsors as the games approach, Argenti said.
"This is a very significant issue, and it's a world platform," he
said. "What better stage?"
Dream for Darfur said it might picket outside the headquarters of
sponsors if they do not take action. Farrow also plans to broadcast
streaming video over the Web from Darfur during the first week of
Arvind Ganesan of New York-based Human Rights Watch said if corporations
don't make "categorical statements [pushing for change on how Beijing
is handling unrest in Tibet], we will probably be more public in our
"Part of the reason people sponsor the Games is because of the feel-good
feeling it brings," he said. "If that is now going to be damaged by
the host government jailing people and committing other abuses, that's
certainly not an image people would want to pay for."
Bevilaqua, the former Coke and Olympic marketing exec, said Coke should
stick with "no comment" on the political issues and keep a low-profile
in areas likely to draw protests.
Maybe, he suggested, Coke and its bottlers should send employees to
support the torch run, but have them blend in with the crowd.
"What you don't want to see is someone in a Coke blazer with their
head broken open on the street or some protestor throwing an egg at
them," Bevilaqua said. "You don't walk away from the event, but you
try to diminish the opportunity for a negative photograph to appear."
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