Coke’s Recent Divestment Can Tell Us A Lot About American Capitalism
Bartow J. Elmore
Author, Citizen Coke: The Making of Coca-Cola Capitalism
Last week, the Coca-Cola Company announced that it was slimming down. Reeling from a dramatic 25-percent decline in US consumption of sugary soft drinks over the past two decades, a trend in part stimulated by consumer concerns about the link between soft drinks and obesity, Coke decided it was time to trim the fat.
No, Coke was not abandoning its full-calorie beverages; rather, the Atlanta-based firm was eliminating costly overhead. As the Wall Street Journal reported last week, Coke planned to reduce its workforce from 123,000 to 39,000 worldwide employees. The firm would refranchise much of its bottling and manufacturing plants to others as Coke corporate got back to basics: producing Coke concentrate.
If Asa Candler, the Atlanta pharmacist who incorporated the Coca-Cola Company in the 1890s, were around today, he’d likely quip: welcome back. After all, Coke had perfected this form of corporate capitalism beginning in the Gilded Age.
From its founding, the Coca-Cola Company’s secret formula for success had always been to get others to do work for it.