Cocacolonization?: A Glimpse at the Global Beverage Industry

(Image Credit: Real Meal Revolution, https://realmealrevolution.com/real-thinking/11-points-to-consider-before-drinking-brandy-and-coke/)

All of the trademarked products mentioned or discussed in this article are the property of their respective owners.

When one thinks about the iconography that defines American identity and pop culture, one would not be faulted for considering soda, specifically Coca-Cola, as something that fundamentally represents what it means to be American, for better and worse. After all, Coca-Cola was first developed and made popular in the United States and is certainly “more American” than baseball (a sport deriving from the English sport of rounders) or apple pie (again, descending from the British Isles), more exclusive than an anthem or flag (which every nation-state has), yet more common than a bald eagle (a bird I saw in the wild only very recently into my adult life).

Coca-Cola is simply everywhere in American society, available for purchase at most if not all convenience stores, markets, and gas stations. Coke products can be found at most of the major fast food chains (including longtime Pepsi partner Arby’s), while The Coca-Cola Company is one of the primary sponsors of the Olympic games and, apparently, Christmas.

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I assume drinking Pepsi automatically puts you on the naught list; Image Credit: https://www.amazon.com/Coca-Cola-Santa-Claus-Christmas/dp/B004O4KTC2

The Coca-Cola Company maintains anywhere from 42% to 45% of the market share for carbonated beverages, despite the fact that Pepsico actually doubled the revenue of The Coca-Cola Company in 2018 ($64.66 billion and $31.85 billion, respectively). Moreover, though Coke and Pepsi serve as evenly matched combatants in the “cola wars,” the Coca-Cola brand is certainly more recognizable and more closely connected to Americana, with the brand Coca-Cola worth approximately $36.1 billion compared to $18.5 billion for the Pepsi brand and trademark. Like Disney and Dole, Coke and Coca-Cola are rooted in the American consumer consciousness and represent a recognizable component of American identity, at home and abroad.

The link between Coca-Cola and Americana has not gone unnoticed, as Coke is one of the oft-cited examples of globalization as Americanization, with increasing interconnectedness sparking fears of American cultural hegemony dominating and displacing the traditions and identities of other people and populations. The global expansion of The Coca-Cola Company and the increased presence and diffusion of Coke products in particular produced significant anxiety in Europe throughout the late twentieth century, with the term “cocacolonization” gaining traction over time.

First coined by the French Communist Party in the late 1940s, the term became popular in academic circles as shorthand for American cultural imperialism with the publication of Reinhold Wagnleitner’s Coca-Colonization and the Cold War: The Cultural Mission of the United States in Austria After the Second World War (1994). With Coca-Cola the most recognized and most popular soda around the world and its intrinsic connection to American identity, it is easy and potent to center on Coke products to examine the processes of globalization and Americanization.

Despite the ubiquitnousness of Coke products both at home and abroad, The Coca-Cola Company, PepsiCo, and the soda industry as a whole have reached a bit of a crisis. Though physicians and nutritionists lambaste the American public for drinking too much soda, the fact of the matter is that soda sales have been in significant decline since the mid 2000s, with many Americans taking nutritional science into account when imbibing, constituting the greatest change to the American diet in the last decade. With the consumption of soda declining to levels not seen since 1985, Americans have increasingly turned to bottled water. The shift from soda to bottled water has been seismic, with bottled water becoming the best selling beverage by volume in the United States in both 2017 and 2018. Even around the world, bottled water rather than soda is both the most purchased and consumed beverage by volume.

Global Beverage Sales

Image Credit: Statista, https://www.statista.com/statistics/232773/forecast-for-global-beverage-sales-by-beverage-type/

Global Beverage Consumption

Image Credit: Statisa, https://www.statista.com/statistics/232924/global-consumption-of-packed-beverages-by-beverage-tpye/

So, with Americans drinking significantly less soda and people around the world preferring bottled water as their beverage of choice, are the charges of “cocacolonization” overblown? Well, yes and no. Though soda sales are in decline in the United States, the process of “cocacolonization” has mutated rather than reversed, with The Coca-Cola Company and PepsiCo reformulating their modus operandi, changing the character but not the existence of American economic and cultural hegemony.

Soda Companies Becoming Beverage Companies

First and foremost, both Coca-Cola and Pepsi have long since ceased to be solely makers and purveyors of soda. Instead, both sodamakers have “diversified their portfolios” to borrow totally not annoying business lingo, becoming broader beverage companies and diverse corporate entities rather than strictly relying on the sales of carbonated soda.

It’s no secret that The Coca-Cola Company and PepsiCo own numerous brands as multinational beverage corporations. Coca-Cola owns and distributes Minute Maid products, Capri Sun drinks, Fairlife milk products, Powerade, Gold Peak and Honestea tea beverages, Vitamin Water, and all of the “Simply” brand beverages, while Pepsi owns Quaker Foods and Snacks, Frito-Lay, Gatorade, Tropicana, Naked juice products, and formerly owned Yum Brands, the company linking KFC, Pizza Hut, Taco Bell, and (prior to 2011) Long John Silver’s, and A&W restaurants.

What is surprising, however, is an increasing reliance on these products, with the acquisition to the rights of various juices, snack foods, and non-carbonated beverages imperative as soda sales continue to decline in the United States. For example, Tropicana generated nearly $1 billion in revenue in the United States in 2018, a total that, if compared to the same data available for individual soda sales in the United States (and you definitely can compare Tropicana to soda based on sugar content alone), would rank as the eight best selling soda.

Best Selling Orange Juice
Image Credit: Statista, https://www.statista.com/statistics/188749/top-refrigerated-orange-juice-brands-in-the-united-states/

Moreover, Gatorade, the drink full of electrolytes (the thing plants crave) present at every sporting event before being thrown onto a winning coach, generated about $5 billion in revenue in 2016,  one twelfth of Pepsico’s annual revenue. With declining soda sales seemingly a given and the sheer volatility of changing consumer tastes, Coca-Cola and Pepsi have done their best to shift away from selling just soda. Both companies have continued to buy up various smaller beverage brands in the United States as well as picking up the distribution rights to international sodas, a strategy that has led to Coca-Cola and Pepsi controlling approximately 60% of the global non-alcoholic beverage industry. Thus, rather than “cocacolonization” (and “pepsicolonization,” but the latter doesn’t roll off the tongue) simply referring to the mass influx of Coke and Pepsi branded products around the world, it just as easily applies to the continued dominance of the respective companies in the non-alcoholic beverage market, colonizing the industry at the expense of smaller sodas and beverage brands.

Global Domination Becoming Global Dependence

When writing his book on “cocacolonization” in the early 1990s, Wagnleitner was specifically thinking about and responding to the establishment of American economic and cultural hegemony in Western Europe, a product of the Cold War in which American mass consumer society became prevalent, resulting in greater prosperity for a new European middle class along with the increased availability of American consumer goods, particularly home appliances. As Europeans came to live like middle class Americans, they increasingly wanted to be like Americans, wearing the same clothes, listening to the same music, and, yes, drinking the same beverages.

Both Coke and Pepsi, the mass produced and mass consumed sodas of America, became popular in Europe over the course of the late twentieth century, as those with disposable income wanted to imbibe just like their counterparts across the Atlantic. In the same fashion, those with disposable income in rapidly growing Asian economies exhibit strong demand for American products in order to partake in the new conspicuous consumption. Because of their association with Americana and due to the global expansion of their parent companies, Coke and Pepsi have managed to permeate the globe, dominating the nonalcoholic beverage market abroad.

The fact that one can get a Coke or a Pepsi in every corner of the globe certainly speaks to the power of these companies in the beverage industry and is testament to American economic hegemony, the very point Wagnleitner highlighted in his analysis of “cocacolonization.” However, into the twenty-first century, the global expansion of The Coca-Cola Company and PepsiCo has been a strategy not of dominance, but dependence. In their financial report for the 2018 fiscal year, Coca-Cola noted that revenue growth, the most important statistic companies use to assess their strategies and overall vitality, was strongest in European, African, and Asian markets as well as the Middle East (deemed a separate market from the “Asian” region). The sale of unit cases (packaged Coke products) grew by 2% in Europe, the Middle East, and Africa and 4% in Asian territories, while the sale of concentrate (the various syrups used to make Coke products) increased by 4% and 5% in the same markets, respectively.

(By the way, you should absolutely download the financial reports for various companies. Aside from all of the jargon, they are interesting reads as well as free information).

Though sales of Coke products (with Pepsi’s numbers following similar trends in global markets) continue to grow in foreign markets, the saturation of the beverage industry in the Western hemisphere along with the decline of soda sales in the United States is very apparent in the data. Unit case sales failed to post any growth in Latin America and grew by only 1% in North America, while concentrate sales increased by 1% in Latin America and declined 1% in North America, reflecting the decades long decline in soda sales.

Thus, though the global expansion of Coca-Cola and Pepsi highlight the strength of these beverage companies, their foray and increased presence in foreign markets is increasingly a strategy of dependence, relying on global consumption rather than forcing it. Just as recent works of scholarship on imperialism demonstrate that European countries like Great Britain and France survived specifically because of their empires rather than truly being masters of colonies in Africa and Asia, with American consumers turning away from carbonated beverages, Coca-Cola and Pepsi have turned to other beverages and the rest of the globe to ensure their viability in the twenty-first century. Moreover, analysts and insiders assessing the beverage industry continue to fear and predict that global tastes will reject soda in the same manner as the United States. While Coke and Pepsi represented American identity throughout the twentieth century, there is the very distinct possibility that they will be rejected out of nutritional concerns as well as outright rejection of American ephemera into the twenty-first century.

The purpose of this article is not to argue against “cocacolonization” or to reject the conflation of globalization as Americanization, but to reexamine and reassess what “cocacolonization” means in the twenty-first century. The expansion into global markets requires The Coca-Cola Company and PepsiCo to respond to consumer tastes and demands around the globe rather than simply dictating them. Though soda still generates billions of dollars in revenue and remains a popular fixture in the United States and around the world, “cocacolonization” is not the just mass presence of Coke and Pepsi products. The two soda giants have increasingly turned to other beverages and now rely on global markets, Coke and Pepsi depending on the “peripheries” for revenue growth rather than expanding as a statement of power. As various countries continue to develop economically and consumer tastes shift and change both at home and abroad, it will be interesting to see and analyze the development of the worldwide beverage industry as well as the place and presence of Coke, Pepsi, and soda within it.

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