The Coke Machine Part 3

Not that the food company execs at c.o.ke or any other brand were evilly plotting to make America fat-they were thinking about their own survival. "When you come in in the morning, there is no sheet that says you get 50 altruism points if you do something charitable," says c.o.ke's former marketing director Hank Cardello, now an anti-obesity advocate at the University of North Carolina. "The sheet says here's how many cases I sold and is it above or below the target." Besides, he says, no one was thinking about soft drinks in terms of obesity or diabetes. "At the time, the product was perceived so positively, it was feel-good stuff. I talk to executives now and they feel like they woke up one day with a target on their back. It's like you wake up one day and all of a sudden someone is saying your kid is ugly."

If Cardello and his fellow executives thought about health at all, it was during periodic flare-ups such as the program CBS did about health concerns over aspartame-the sweetener better known as NutraSweet-which both c.o.ke and Pepsi had started using to sweeten their diet beverages starting in 1983 (moving to a 100 percent aspartame formula by the end of 1984). Complaints about the chemical more than doubled in the latter half of that year, from 108 to 248, with regular diet soda drinkers complaining about headaches, dizziness, fatigue, depression, and insomnia within a few days of starting to drink the beverages. It's telling that the company treated the issue as one of brand image-not health. Cardello nervously wrote a memo to his superiors telling them it wasn't a big deal "unless the CBS story s...o...b..lled," which it never did. Eventually the Centers for Disease Control declared concerns about aspartame of minor importance, even as more than seven thousand complaints-three thousand concerning soft drinks-were received by the FDA in the first fifteen years. Concerns over the chemical continue to persist, with a comprehensive, if controversial, study conducted in Italy and published in 2006 over seven years that found aspartame statistically linked to an increase in cancer in rats. (The FDA dismissed the study as flawed by preexisting disease in the rat population.) Faced with the catastrophic upheaval that would come with a reformulation of Diet c.o.ke, the Coca-Cola Company has reflexively held the line on aspartame, sending representatives to lobby against a bill to ban the substance introduced in New Mexico in 2006.

c.o.ke intervened even more directly when another potentially dangerous chemical was discovered in diet sodas in 1990s. During product tests, chemists at rival company Cadbury-Schweppes discovered excessive levels of benzene-a chemical linked to leukemia and other forms of cancer-in some of its sodas, particularly diet orange sodas. The chemical, which apparently was formed from a reaction of the preservative sodium benzoate with as...o...b..c acid (vitamin C), was found in levels of more than 25 parts per billion (ppb), well above the legal limit of 5 ppb.

Representatives of the National Soft Drink a.s.sociation-of which c.o.ke was a member-met promptly with the FDA and expressed concern over the "potential for adverse publicity a.s.sociated with this problem," according to a memo from the meeting. The government agency agreed to let the companies quietly reformulate their drinks to prevent a scare. (Earlier that year, Perrier water was found contaminated with benzene at levels up to 22 ppb, and the company forced to recall more than 160 million bottles worldwide at a cost of $263 million.) It hardly policed their efforts, however; the FDA's own tests from 1995 to 2001 show that 79 percent of diet soda samples tested were contaminated with benzene at an average of 19 ppb.

The public wasn't alerted until 2005, when one of the original chemists who discovered the benzene fifteen years earlier found it still present in some drinks. Under pressure, the FDA released its own tests, finding among other beverages that c.o.ke's Fanta Orange Pineapple soda contained benzene at nearly 24 ppb. c.o.ke's public relations team flew into action, stating "unequivocally that our products are safe," even while not denying the presence of benzene. Not trusting the companies this time, some consumers brought a cla.s.s-action lawsuit against c.o.ke, Pepsi, Cadbury, and other companies. c.o.ke settled in May 2007, agreeing to reformulate the drinks and pay $500 each to four plaintiffs.

These kinds of strategies set the tone for the Coca-Cola Company's early responses to the obesity epidemic, in which it made common cause with its compet.i.tors to try to fly under the radar-worried above all about the possible damage done to the Coca-Cola brand. Almost from the beginning, however, the obesity fight would be different-dragging c.o.ke kicking and screaming into the public arena to defend itself against attack. set the tone for the Coca-Cola Company's early responses to the obesity epidemic, in which it made common cause with its compet.i.tors to try to fly under the radar-worried above all about the possible damage done to the Coca-Cola brand. Almost from the beginning, however, the obesity fight would be different-dragging c.o.ke kicking and screaming into the public arena to defend itself against attack.

The opening salvo was fired by a nonprofit group called the Center for Science in the Public Interest (CSPI), which released a report about soda in 1998 called Liquid Candy Liquid Candy that teased out the connections between soda and health issues. "I had been watching soda sales rise for decades, ever since World War II," says CSPI president Michael Jacobson. "We always knew that soda was the quintessential junk food, but the concern was tooth decay. No one talked about obesity." The report would change that-drawing the connection for the first time between the corresponding rise in soda sales and obesity rates over the previous twenty years, and sparking a debate that eventually spilled out into a national backlash against sugary soda. that teased out the connections between soda and health issues. "I had been watching soda sales rise for decades, ever since World War II," says CSPI president Michael Jacobson. "We always knew that soda was the quintessential junk food, but the concern was tooth decay. No one talked about obesity." The report would change that-drawing the connection for the first time between the corresponding rise in soda sales and obesity rates over the previous twenty years, and sparking a debate that eventually spilled out into a national backlash against sugary soda.

CSPI was founded in 1971, one of the first of the many "public interest" groups that proliferated in a period that business historian David Vogel calls the last of the "three major political waves of challenge to business that has taken place in the United States in [the twentieth] century" (the first two being the Progressive Era and the strong push by organized labor in the post-Depression 1930s). Groups such as the Sierra Club, Common Cause, and Ralph Nader's Public Citizen used any means possible to curb the power of big business at a time when public support for corporations was at a low ebb.

In CSPI's case, the group has held vocal press conferences, slapped complaints against companies with government agencies, and even threatened lawsuits in its usually successful attempts to remove what it sees as deceptive advertising and nutrition labeling for food. For its actions, CSPI has been labeled the "food police" and derided as a reactionary group for taking on everything from cheese to hamburgers. (Most recently, it has gained notoriety for its push to ban trans fats in New York City restaurants and its fight for calorie counts in chain restaurants.) But Jacobson makes no apologies for sounding the alarm over soda. As he watched the parallel rise of obesity statistics and soda consumption, he says, he couldn't help putting the two together. All of that emphasis on growth pushed by Goizueta and Ivester, he argued in Liquid Candy Liquid Candy, had created collateral damage-especially with some of the most vulnerable of the nation's citizens-children. According to the report, even young children drank more than a can of sugary soda a day. A typical teenage boy who drank soda consumed nearly two and a half cans-with some drinking up to five. Not that girls fared much better, averaging nearly two cans a day. To put that into perspective: One 12-ounce can of soda contains about 10 teaspoons of sugar; a Double Gulp has more than 50-just over one cup. Other statistics in the report spelled out the aggressive marketing tactics that the company was using to push even greater sales of soft drinks. (Indeed, when CSPI did an update of Liquid Candy Liquid Candy in 2005, the percentage of calories from soft drinks in the average person's diet had gone up 25 percent.) in 2005, the percentage of calories from soft drinks in the average person's diet had gone up 25 percent.) The report was catnip to the media, which ran story after story about the findings-singling out c.o.ke more often than Pepsi as a harmful substance fed to youth. The Coca-Cola Company sat back silently, even as its surrogate, the National Soft Drink a.s.sociation, aggressively contradicted CSPI's claims. "Soft drinks make no nutritious [sic] claims," said a spokesperson for the trade group. "We are simply one of the nice little refreshments people can enjoy as part of a balanced diet." Furthermore, the group said, there was no conclusive evidence that soda caused obesity any more than any other added calories to the diet. The NSDA went on to dismiss CSPI's attack as a histrionic overreaction to a food that the vast number of people enjoy-akin to its previous attacks against theater popcorn and fast-food hamburgers.

If there was a corporate playbook to respond to public-interest group attacks, the soda companies had taken a page directly from it. The cla.s.sic response had been established several decades before by the makers of an even more obviously harmful product-cigarettes. When studies first started casting aspersions on smoking in the 1950s, the tobacco companies hired the industry consulting group Hill & Knowlton, which in turn established the Tobacco Industry Research Committee (later the Center for Tobacco Research) in order to respond to the claims.

Rather than face them head-on, however, the group pulled a rope-a-dope, calling scientific studies into question all the while it stalled by holding out for more evidence, which eventually took decades to emerge. "Industry has learned that debating the science is much easier and more effective than debating the policy," writes David Michaels in his recent book Doubt Is Their Product Doubt Is Their Product, a t.i.tle taken directly from a statement in an actual memo from a tobacco company exec. Knowing that it is nearly impossible to establish proof beyond a reasonable doubt in science, industry execs-whether from tobacco companies speaking on secondhand smoke or from oil companies addressing global warming-have very effectively changed the terms of the debate by encouraging further research as a way of holding off any government action-or as another tobacco executive wrote in a memo, "creating doubt about the health charge without actually denying it . . . encouraging objective scientific research as the only way to resolve the question of health hazard."

Cardello admits that c.o.ke and its compet.i.tors followed a similar tactic of stalling on scientific evidence in dealing with early health concerns. "Clearly that is the playbook, and I think most companies whether it's sugar or salt or whatever the demon du jour is, follow that playbook," he says. "I'm not even making a moral judgment on it." But he also insists there are limits to the kind of stall tactics that a company will employ. "If someone finds salmonella in a product, I get that off in five seconds," he says. But c.o.ke and other soft drink companies were taken aback by the way they were singled out for obesity-after all, many marketing executives in the industry had made a conscious decision not to apply for positions in liquor or tobacco companies because they didn't want to push harmful products on the populace. Now suddenly, they were the problem. "Without a crisis you don't change your core business model," says Cardello. "It took the crisis of obesity to make a change."

That a.s.sessment gives c.o.ke too much credit, perhaps, ignoring the fact that even as it was adjusting its business model in the face of the obesity epidemic, it was continuing to use advertising and public relations efforts to deflect attention from its role in that crisis. When that didn't work, it followed a dual strategy of simultaneously denying its role and positioning itself as a partner in developing solutions to the problem. At no point did c.o.ke seriously disavow its strategy of pus.h.i.+ng more and bigger sizes of sugary soft drinks-in fact, after drawing back temporarily in the face of public opposition, it has redoubled its efforts in that core market.

One thing, however, is for sure-for c.o.ke, the obesity crisis could not have come at a worse time. Faced with an increasingly saturated market, the company failed for the first time in years to meet earnings expectations in 1998. Ivester, meanwhile, went through a series of missteps-first a contamination scare in Belgium, in which the company seemed to drag its feet and not respond fast enough when some two hundred people, many of them children, got sick. Then came news that Ivester was considering a new type of vending machine overseas that would change its prices depending on the temperature outside-a cynical form of price-gouging even for c.o.ke.

The coup de grace, however, came when a certified public accountant in Indiana named Albert Meyer took a closer look at c.o.ke's books one day, setting in motion a chain of events that would bring down all of Goizueta and Ivester's financial machinations. Meyer determined that through c.o.ke's majority owners.h.i.+p in its bottlers it was able to exercise near complete control over their financials, ensuring the parent company would always make a profit. If c.o.ke reported its bottlers' profit alongside its own, Meyer concluded, it would show nearly none at all. "One cannot transact with oneself," he told the Philadelphia Daily News Philadelphia Daily News. "If you are labeled America's most admired company, you should have accounting policies that live up to the name." Another a.n.a.lyst later called c.o.ke's shenanigans simply "smoke and mirrors."

As c.o.ke's sales stagnated, the bottlers began to balk. Ivester raised syrup prices, and they further dug in their heels, enlisting two of c.o.ke's largest shareholders in their cause. In a private meeting in December 1999, they told Ivester he was through. If they hoped to rescue the stock price with the ouster, however, they failed. c.o.ke's share price continued to fall, leading the company to lay off a third of its ten thousand U.S. workers, along with a similar amount overseas. Most of the lost jobs were outsourced to contract workers or private companies, even as longtime workers lamented the end of c.o.ke's image as a benevolent employer. Meanwhile, new CEO Douglas Daft, who replaced Ivester, downgraded volume targets to 5 to 6 percent for the year 2000-and still missed them. When Daft tried to orchestrate a purchase of Quaker, maker of Gatorade, he was voted down by the board.

All of this bad news, however, was just a prelude to c.o.ke's biggest crisis, when the anti-obesity activists opened up a new front in the fight against soda-one that took aim directly at the core of c.o.ke's strategy to increase sales among its most valuable set of consumers-schoolchildren.

FOUR.

The Battle for Schools The first time Jackie Domac heardof her school's soda contract, it was an early fall day at the beginning of the school year in 1999. The high school health teacher was having lunch with students in her cla.s.sroom in Venice, California, when one of them pulled out a can of 100 percent juice she'd brought from home. "Do you think we could have this in the vending machines?" she asked. Domac hadn't been aware that the school didn't have juice for sale, but she figured it would be an easy fix. After lunch, she dropped a quick note in the financial manager's mailbox. The reply she received in her own box was short: "No. Selling juice would conflict with our exclusive soda contract." Domac was taken aback. "I said soda contract, what's a soda contract?" she recalls now from her home in Southern California, where she has been studying to be a lawyer.

She asked the school office for a copy of the contract, and after some initial denials was given one. Sure enough, the deal the school had signed with the Coca-Cola Company prohibited it from selling juice. In fact, the school wasn't allowed to sell anything that hadn't been approved by c.o.ke, which had inked a deal to sell its drinks, and only its drinks, in the vending machines. For the privilege, c.o.ke gave the school $3,000 a year-about $1 per student.

"I was pretty much horrified," says Domac. "As a health teacher, it was pretty disturbing to discover that a private industry had more influence over students' health than their own teachers did. Even if a student wanted to drink something else, it didn't matter because we had sold all of our rights to this one company." She promptly sent the contract to the Los Angeles Times Los Angeles Times, and was rewarded with a sharp rebuke by the school, which censured her for violating the contract's confidentiality agreement.

But Domac wasn't just the school's health teacher. She was also the leader for a school "peace and justice" club. After she told the students what she had learned, some formed a new group, called the Public Health Advocacy Club, to investigate. What they found went far beyond their high school. As they picked apart the contract, they found that high schools across the country had adopted similar contracts with similarly restrictive beverage choices. Eventually that simple question asked by that one high school student would grow into a national movement combating soda for its role in the epidemic of childhood obesity. After all, the increase in consumption of sugar-filled soft drinks over the last three decades of the twentieth century wasn't a happy accident for c.o.ke; it was a deliberate strategy. And schools were right at the center of it.

By the late 1990s, c.o.ke had hit a wall. Despite executives' push for ubiquity, the company was running into the inevitable fact that the market for soft drinks in America was beginning to be saturated. Beverage a.n.a.lysts began to wonder aloud whether Coca-Cola would be able to continue to expand in its home country. Now with the unraveling of the bottling scheme and sales starting to lag, the company redoubled its efforts to find whatever new markets it could-and found a captive one in schools that could not only ensure a steady source of new sales but also inspire the early brand loyalty that was so important.

In fact, the soda companies, led by c.o.ke, had been slowly pus.h.i.+ng open the door to school contracts for decades. In the 1960s and 1970s, sales of soda and other food of "minimal nutritional value" were strictly regulated during school hours. In the 1980s, the National Soft Drink a.s.sociation fought back, suing the federal government on the grounds that the regulations were "arbitrary, capricious, and an abuse of discretion." Though they lost in district court, the soda companies won on appeal when the court ruled the United States Department of Agriculture could restrict vending machine sales only during lunch hour. The USDA reluctantly revised its rulings, which went without challenge for more than a decade. When Vermont senator Patrick Leahy tried to bar soda machines again in 1994, c.o.ke leaped to action with a letter-writing campaign that enlisted school princ.i.p.als, teachers, and coaches to complain about lost revenue. Unsuccessful in his efforts, a frustrated Senator Leahy complained that "the company puts profit ahead of children's health. . . . If c.o.ke wins, children lose."

With the door now ajar to selling soda in schools, however, c.o.ke pushed it open even further with a new strategy to win big in the hallways. So-called pouring-rights contracts began as agreements by soda companies to sell their products in fast-food restaurants, such as c.o.ke in McDonald's and Pepsi in Burger King. Sometime in the early 1990s, they began to expand into sports stadiums and state fairgrounds, gaining exclusive access to sell only their own brand's products in exchange for a premium paid to the facility.

Based on this model, the first school contracts followed with little fanfare: Woodland Hills, Pennsylvania, for example, signed a ten-year contract with c.o.ke in 1994 for twenty-five c.o.ke machines in exchange for $30,000 up front and commissions on further sales. Sam Barlow High School in Gresham, Oregon, signed a contract with c.o.ke in 1995 and received four scoreboards valued at $27,000.

For schools hamstrung by budget cuts, the contracts were a G.o.dsend, promising easy money for big purchases they couldn't squeeze into their yearly numbers. After all, schools had recently been hit hard by the double whammy of the "tax revolt" in the 1980s that lowered property tax revenues and decreased federal funding in the 1990s. The soda money offered discretionary income administrators could use as they saw fit; some put the cash toward awards for gifted students; others funded field trips or parties. (A $2 million district-wide contract in DeKalb County, Georgia, even included $41,000 set aside for all fifth-graders to visit the World of Coca-Cola.) In some of the contracts, schools could even earn additional money by selling more c.o.ke. An early report to hit the media was the strange affair of the "c.o.ke Dude"-the self-chosen moniker of John Bushey, a superintendent in Colorado Springs. Bushey wrote his princ.i.p.als explaining the district had to top 70,000 cases annually or risk reductions in the payments from c.o.ke, which ranged from $3,000 to $25,000 per school. He suggested they place machines in cla.s.sroom corridors and allow kids to buy drinks throughout the day. Even if soda wasn't allowed in cla.s.s, he urged teachers to consider allowing juices, teas, and waters. Sadly, the district fell short, in part because of loopholes that counted only direct sales from vending machines, and not c.o.ke sales at sporting events. "Quite honestly, they were smarter than us," Bushey later told The New York Times The New York Times.

c.o.ke sweetened the pot for some educational honchos, paying the heads of the National Parent Teacher a.s.sociation and the National School Boards a.s.sociation $6,000 each in "consulting fees" to fly to Was.h.i.+ngton and Atlanta as part of a group called the Council for Corporate and School Partners.h.i.+ps. In a testimonial on the group's website that was later removed, a Coca-Cola official raved about the quality of consulting the educators provided, claiming, "They have become our friends!"

Perhaps the person most responsible for the growth in pouring-rights contracts nationwide, however, was a former college athletic director from Colorado named Dan DeRose, who reinvented himself as DD Marketing, a consulting company to guide schools on striking the hardest bargain with soda companies. Between 1995 and 1999, DeRose inked $300 million in contracts (the consultant pocketing a healthy 25 to 35 percent of the total).4 "My basic philosophy," he told "My basic philosophy," he told The Denver Post The Denver Post in 1999: "Schools have it; they're offering it. If we can a.s.sist them in maximizing their revenue then I think we're doing a great, great service." He even used his own daughter Anna to underscore the value of soda contracts, boasting to school administrators when his daughter was in first grade: "From now until she's graduated, all she'll drink is c.o.ke. . . . She doesn't even know how to spell Pepsi." in 1999: "Schools have it; they're offering it. If we can a.s.sist them in maximizing their revenue then I think we're doing a great, great service." He even used his own daughter Anna to underscore the value of soda contracts, boasting to school administrators when his daughter was in first grade: "From now until she's graduated, all she'll drink is c.o.ke. . . . She doesn't even know how to spell Pepsi."

As the contracts got more and more lucrative, however, some parents and activists began expressing misgivings about the amount of advertising by soda companies in schools. "There should never be a situation on public property where commercial advertising is permitted," says Ross Getman, a self-described "obsessive-compulsive" from Syracuse, New York, who launched a website to track the contracts nationwide, starting with the one signed by Cicero-North Syracuse High School in 1998. That one included up-front payments from c.o.ke of $900,000 to construct a new football stadium-in which the c.o.ke logo would be prominently displayed on a six-foot-high scoreboard provided by the company, with athletes on the field required to drink out of red c.o.ke cups.

The deal was inked with the help of the president of the state a.s.sembly, Michael Bragman, who had a home filled with antique Coca-Cola memorabilia that would set the collectors at the g.a.y.l.o.r.d Texan to drooling, including two fully stocked c.o.ke machines in the bas.e.m.e.nt. Over the years, Bragman had been a good friend to c.o.ke, helping to repeal a 2-cent-per-container soda tax imposed back in the 1990s. In exchange, Coca-Cola had consistently been one of the biggest contributors to Bragman's reelection campaigns.

Now, standing next to Bragman at the announcement, Coca-Cola Enterprises CEO Bob Lanz gave a heartfelt speech, saying that c.o.ke "wanted to give something back to the community." Neither of them mentioned that the majority of the money for the stadium-some $4.6 million-would come from state funds.

The floodgates had now been opened-the school stadium success was written up in c.o.ke's hometown newspaper The Atlanta Journal-Const.i.tution The Atlanta Journal-Const.i.tution , and once administrators began hearing about the cash payments, school districts from Portland, Oregon, to Edison, New Jersey, got religion in a big way. By 2000, according to the Centers for Disease Control and Prevention, 92 percent of high schools had long-term soda contracts, along with 74 percent of middle schools and 43 percent of elementary schools. And at almost all of them, the number of vending machines increased, jumping from a lonely c.o.ke machine by the locker room to dozens of machines scattered around the cafeteria, the auditorium, or even in the halls outside cla.s.srooms. , and once administrators began hearing about the cash payments, school districts from Portland, Oregon, to Edison, New Jersey, got religion in a big way. By 2000, according to the Centers for Disease Control and Prevention, 92 percent of high schools had long-term soda contracts, along with 74 percent of middle schools and 43 percent of elementary schools. And at almost all of them, the number of vending machines increased, jumping from a lonely c.o.ke machine by the locker room to dozens of machines scattered around the cafeteria, the auditorium, or even in the halls outside cla.s.srooms.

While the additional revenue for the company added only slightly to its ma.s.sive balance sheet, the schools gave c.o.ke access to customers at an early-and vulnerable-age. "If a high school student drinks a c.o.ke while he's at school, the likelihood that he'll turn to c.o.ke again when he's outside school and actually has a choice becomes much greater," says former brand manager Cardello. "Thus in the end, the goal is not just about getting kids to spend money, it's about getting kids to choose the right brand." for the company added only slightly to its ma.s.sive balance sheet, the schools gave c.o.ke access to customers at an early-and vulnerable-age. "If a high school student drinks a c.o.ke while he's at school, the likelihood that he'll turn to c.o.ke again when he's outside school and actually has a choice becomes much greater," says former brand manager Cardello. "Thus in the end, the goal is not just about getting kids to spend money, it's about getting kids to choose the right brand."

Getting inside the school building with the active support of administrators also gave c.o.ke a back door around its long-standing strictures against advertising to children. For years, after all, c.o.ke had directly targeted kids with special come-ons, from nature cards with the c.o.ke logo in the 1920s to "Know Your Airplanes" decks of cards during World War II. Even back then, however, the company fretted about appearing to advertise a sugary drink to young children. The D'Arcy Agency's ad rules included a proscription against showing "children under 6 or 7 years old," which by the 1950s, McCann extended to children under twelve-a policy c.o.ke supposedly continues to the present day.

Despite its restraint, however, c.o.ke has been remarkably successful in penetrating even the youngest minds. Research has shown that babies recognize brands at anywhere from six to eighteen months, specifically requesting them by age three. Of those brands they know best, c.o.ke is in the top five, along with Cheerios, Disney, McDonald's, and Barbie. In a society where c.o.ke is within an arm's reach of desire-or part of a 360-degree landscape-even children can't escape the ubiquitous c.o.ke logo. But familiarity and brand loyalty, of course, are very different things. As another former c.o.ke marketing chief once said, "With soft drink consumption, early preferences translate into later life preferences. It's a lot easier than getting consumers to switch their brand preferences later on."

And so, c.o.ke has constantly found ways to do that. For decades, for instance, it has blithely produced "collectors' items," including Barbie dolls, playing cars, board games, delivery trucks, and other toys supposedly targeted to adults. Then there are all of those Santa ads, which subtly package the meaning of Christmas in the delivery of a bottle of c.o.ke, imprinting the two concepts together in minds that aren't cognitively well developed enough to distinguish the difference. Those cute polar bears serve a similar purpose. "You take any character that is cute and cuddly and fun and have them drinking down a Coca-Cola and smiling," says Daniel Acuff, an industry ad consultant for years who created the M&M's characters and worked on campaigns for Cap'n Crunch cereal. "That is very clearly playing on the soft spot in people in general and the cognitive un-awareness of children under twelve in particular."

c.o.ke has found other ways to get around its policies as well, especially on television, where it defines kids' shows as those in which 50 percent of the audience is under twelve. At least since the last decade, however, the programs children watch most are those originally intended for teens or adults. In 2000, c.o.ke helped foment the concept of "product placement" with a $6 million deal for primary sponsors.h.i.+p of the WB show Young Americans Young Americans, in which characters were seen drinking Coca-Cola in ways one television critic called "ludicrously conspicuous." But c.o.ke found absolute product placement gold with its sponsors.h.i.+p of the runaway television hit American Idol American Idol, which happens to be the second most popular show among children under twelve (second only to SpongeBob SquarePants SpongeBob SquarePants).

In addition to commercials during the program, c.o.ke puts c.o.ke cups into the hands of judges and brands a backstage "red room" with c.o.ke pictures on the walls, c.o.ke coolers, and a "red couch," where performers are interviewed among c.o.ke logos. "You couldn't ask for better TV," enthused one c.o.ke VP in USA Today USA Today. "If you look at ratings, it's got universal appeal-everything from kids to 35- to 64-[year-olds]."

Television shows aren't the only realm where c.o.ke has used product placement to appeal to kids. In 2001, Creative Artists Agency brokered a $150 million deal for c.o.ke to be the exclusive sponsor for the Harry Potter movies-based on the wildly popular book about a child wizard that spurred a generation of tweens to start reading. In the deal worked out with Warner Bros., c.o.ke wouldn't appear in the movie, nor would any of the characters be seen drinking it (after all, the film's young star, Daniel Radcliffe, was only eleven years old at the time). However, characters and symbols from the film were plastered on packages for c.o.ke, Minute Maid juices, and Hi-C, leaving no doubt who the company was pitching to. "Kids love Harry Potter, and we are confident the affiliation will be very good for us," said a spokesman for Minute Maid, even as a c.o.ke spokeswoman insisted, "The target is really families and not just just kids." kids."

The movie earned nearly $1 billion worldwide-the second-highest-grossing film at the time behind t.i.tanic t.i.tanic-and Coca-Cola Enterprises spokesperson John Downs called Potter the most successful campaign of the year. It was enough to spur a push to product placement in movies. c.o.ke appeared in eighty-five of them between 2001 and 2009, third behind Apple and Ford in frequency. While many were marketed to adults, several were even more conspicuously aimed at kids, including the 2005 Dream Works film Madagascar Madagascar, featuring animated zoo animals escaping from New York, as well as such preteen fare as Elf Elf, Are We There Yet? Are We There Yet?, s...o...b..-Doo s...o...b..-Doo, and the Disney live-action princess fantasy Enchanted Enchanted.

Finally, in 2002, c.o.ke made the leap to online advertising with c.o.ke Studios, an online world where users could create avatars called "V-Egos" and put together their own music mixes with different virtual instruments. In 2007, the company followed it up with an entire branded world, CC Metro-which must look much like what Doug Ivester imagined when he envisioned the concept of a "360-degree landscape" of c.o.ke. In this world, avatars move around an entire three-dimensional city, buying cool clothes, riding on hovercraft and skateboards, and talking with fellow fans of c.o.ke. And while they are doing all these cool things, they are surrounded by c.o.ke's advertising images-with logos on billboards, blimps, and park benches, fountains and statues in the shape of c.o.ke's hobbleskirt bottle, and various stores and restaurants where you can spend real money to buy virtual gla.s.ses and bottles of c.o.ke products. (Strangely, there are very few ads for anything but c.o.ke Cla.s.sic.) Soon after it opened, it was getting more than 100,000 visitors a month-no doubt many of them children, given the video game interface and the range of activities available.

With that kind of success reaching young audiences, schools must have seemed to c.o.ke just another avenue to "getting them young." But in doing so, it failed to see how cynical it seemed to sell to children who had no other choice but to spend eight hours a day in the glow of the c.o.ke machine.

Almost immediately after forming the new Public Health Advocacy Club, Jackie Domac and her students took action, attempting to persuade the school to cancel its contract with c.o.ke and implement healthier choices in the vending machines. They knew it would be difficult to convince their fellow students that the soft drinks they enjoyed were actually bad for them. after forming the new Public Health Advocacy Club, Jackie Domac and her students took action, attempting to persuade the school to cancel its contract with c.o.ke and implement healthier choices in the vending machines. They knew it would be difficult to convince their fellow students that the soft drinks they enjoyed were actually bad for them. Liquid Candy Liquid Candy had only just been published, and studies were only beginning to link soda to obesity and other health problems. Even so, the students worked to raise awareness, creating whimsical T-s.h.i.+rts and holding taste tests for organic soy milk in the cafeteria. had only just been published, and studies were only beginning to link soda to obesity and other health problems. Even so, the students worked to raise awareness, creating whimsical T-s.h.i.+rts and holding taste tests for organic soy milk in the cafeteria.

Momentum grew after Domac and her students met directly with a representative from c.o.ke's bottler, who reluctantly agreed to stock half of the slots with juice and other more healthful beverages (but only if the school accepted a 15 percent commission on those items, compared to 36 percent on soft drinks). When Domac triumphantly took a French film crew to show them the vending machines a few weeks later, she found the company had changed virtually nothing. "I had asked them to meet us halfway, and now I just embarra.s.sed myself," she remembers. "That was it, they were out." She adopted more confrontational tactics, running for and winning a spot on the parents' advisory council and bringing students in to raise the issue during meetings.

It was money, however, that eventually did the talking. Domac and her students applied for a state health grant in 2002 to serve as a model school for nutrition. When they received a windfall of $250,000, the administration agreed to cancel the deal with c.o.ke on a trial basis to see if the new strategy could work. "You can scream all you want about how healthy beverages prevent obesity and diabetes, but unless you can show a school that it has enough money to run its programs, that's going to fall on deaf ears," Domac says. With the new money, the students worked to get an array of juices and soy beverages into the vending machines at last, along with baked chips and trail mixes. While vending machine sales initially dipped, they eventually rose higher than before-$6,163 in 2002 versus $7,358 in 2003, according to Domac, who still keeps the figures.

Flush with their sense of victory, the student health club took the issue to a higher authority even before those numbers came in-arguing for a ban on soda in the entire Los Angeles Unified School District, the second largest school district in the country, with more than 700,000 students. Again, they used creativity to make their point, storming meetings dressed in necklaces of plastic fruits while performing a foot-stomping chant, "Take Back the Snack." "Facts are great, but they are also quite boring," says Domac. "Having kids being vivacious and happy with a positive message went a long way." The students made impa.s.sioned speeches about the new health craze at their school, at the same time marshaling data from a new UCLA study showing that 40 percent of students in the Los Angeles district were already obese.

c.o.ke waged a creative campaign of its own, threatening to pull its sponsors.h.i.+p of the district's Academic Decathlon events at the school in a blunt attempt to silence opposition. But in the end, the gra.s.sroots strategy worked: In August 2002, the Los Angeles Unified school board unanimously voted to cut their contract with c.o.ke. Starting with the 2004 school year, the district would sell no soda at all, stocking its vending machines with only milk, water, and drinks with at least 50 percent juice and no added sweeteners.

After three years of struggle, the students had won-an empowering and humbling experience. "I've never been part of anything like that where people so young can have so much sway," says Faisal Saleh, one of the student leaders, who is now majoring in theater arts at Santa Monica State College. "That's something I take pride in." The success in Los Angeles, however, was hardly the end of the battle against c.o.ke in schools-in fact, it was only the beginning. Even while c.o.ke was losing ground in California, the company soon roared back, determined not to lose out on a hard-won new market for its products at a critical time.

By the time L.A. pa.s.sed its resolution, word had already spread to other school districts, sp.a.w.ning similar resolutions in San Francisco, Sacramento, Madison, and Oakland. It wasn't just c.o.ke that stood to lose from the backlash-but Pepsi as well. The two companies, bitter rivals in the press, closed ranks to defend themselves through their trade organization, the National Soft Drink a.s.sociation. As with the initial criticism of CSPI's report, the group painted Domac and her students as misguided. "This is like using a squirt gun to put out a forest fire," said NSDA spokesman Sean McBride. "The LAUSD missed an important opportunity to stem rising obesity rates by having more physical education in their schools and better nutrition education."

That notion that "it's the couch, not the can," became a rallying cry for Big Soda. c.o.ke quickly launched a pilot program in Houston, Philadelphia, and Atlanta called "Step with It!"-distributing c.o.ke-red pedometers to kids to encourage them to exercise more by taking 10,000 steps a day. The program won praise from Health and Human Services secretary Tommy Thompson, and expanded to 250 schools around the country by 2003. Even as c.o.ke was playing nice in the media, however, it was funding studies to cast doubt on the connection between soft drinks and obesity.

Along with Tyson Chicken and Wendy's, c.o.ke reportedly "donated" $200,000 to a new group called the Center for Consumer Freedom (CCF), which took the lead in ridiculing the fight against soda and other unhealthy food, all without revealing its funding. (Pepsi publicly disavowed the group.) "There is a rush to blame soda companies that far outstrips any scientific evidence," said CCF senior a.n.a.lyst Dan Mindus. He pointed to competing studies, one showing that soda had no effect on weight gain, another contending that it was lack of exercise that caused weight increases. What CCF doesn't advertise, of course, is who is paying for those studies. A recent review by David Ludwig-the author of the previously mentioned study on kids and soft drinks-found that beverage studies paid for by industry sources were four to eight times more likely to deny the connection between soda and weight gain than those funded by government or private sources. He makes the connection between soda and the tobacco industry, which funded studies attacking the connection between smoking and lung cancer for forty years. "Is that happening today with the soft drink industry?" Ludwig asks. "Only time will tell, but there certainly is a precedent." As its name implies, CCF argues that consumers should be free to eat what they want-without the "food police" looking over their shoulder at the dinner table. "Their ultimate goal is to restrict our access to certain food," says Mindus. "If they don't believe that we are to be trusted with the decision of choosing the food we eat, how can Americans be trusted with anything?" The argument has resonance. Shouldn't Americans be free to choose what they eat and drink? And if it makes them fat, isn't that their own fault? The argument hits deep in the American psyche, evoking images of founding fathers dumping tea and the Marlboro Man bestriding the Western plains. It also evokes the spirit of free-market capitalism, which enshrines free choice as its highest value.

Ultimately, however, the argument is a cynical one-since the very success of c.o.ke and its fellow companies has given the company the ability to narrow kids' choices. In 2009 alone, c.o.ke spent $2.8 billion in advertising to push its products to the general public. And in schools, the deck is even more stacked against students, since they can choose only from a preselected array of beverages, all the while subjected to the advertis.e.m.e.nts of the exclusive brand. "Certainly students should be taught to make healthful choices and take individual responsibility," says Lori Dorfman, of the Berkeley Media Studies Group, who has a.n.a.lyzed the way that the soda/obesity issue has played out in the media. "But students do not determine what is made available to them in the vending machines. It's the adults who are responsible for ensuring that schools are doing right by children in their care."

Even so, the Coca-Cola Company appealed to "choice" in 2001 when it staged a strategic retreat with a new school beverage policy. c.o.ke would continue to allow its products in schools but prohibit exclusive school contracts or up-front payments to school districts. "We just don't think that schools are an appropriate venue for marketing," said Coca-Cola America president Jeffrey Dunn during a luncheon announcement in Was.h.i.+ngton. c.o.ke received a rush of positive publicity, but there was only one problem-n.o.body bothered to tell the bottlers. Whether by design or benevolent neglect, Coca-Cola Enterprises was caught flat-footed by the announcement. A spokesperson for CCE promised that the bottlers would comply if schools stopped putting out requests for proposals. That promise lasted for all of a week-until Portland, Oregon, put out a request and Coca-Cola Enterprises ponied up a bid.

When the Los Angeles plan pa.s.sed in August 2002, CCE president John Alm appealed to his chief lobbyist and public relations head John Downs, asking, "What is the plan?" Truth is, the bottler didn't have one. It would take ten months to declare that it was keeping exclusive contracts, even as the bottler encouraged salespeople to offer schools more choices and eliminated big up-front payments. While Alm was announcing the policy, he also produced a private video for friendly politicians calling obesity "a war that's been declared on our company." At the same time, CCE proactively became a chief sponsor of the National Parent Teacher a.s.sociation in June 2003 with an undisclosed contribution; Downs was placed on its board.

In partnering with teachers and parents, Big Soda emphasized the importance of the money they provided to schools. "They are a win for the students and the schools and the taxpayer," said the NSDA's McBride. "I think everybody benefits as a result of these business partners.h.i.+ps." It was a meme that was picked up by the media. A review by the Berkley Media Studies Group of news articles in 2001 and 2002 found 103 references to obesity threatening children's health but 115 references to soda sales providing money for schools.

Later a.n.a.lyses, however, showed they weren't quite the panacea they seemed. A review by Oregon nonprofit Community Health Partners.h.i.+p found contracts yielded on average only $12 to $24 per student annually-and most of that money came from commissions on purchases themselves. Another a.n.a.lysis by CSPI found that soda commissions averaged only 33 percent-meaning that schools made back only a third of each dollar students spent. The most detailed sections of the contracts, CSPI found, were those delineating just where and how the c.o.ke logo was to be displayed-with stiff penalties to schools for noncompliance.

When Coca-Cola Enterprises finally announced its own new policy at the end of 2003, it did little to change any of the existing pouring-rights contracts. According to Downs, the company would prohibit sales of soda to elementary school kids during school hours-an empty gesture, as most elementary schools didn't sell soft drinks anyway. In addition, it would encourage bottlers to voluntarily control vending machine operating hours in middle schools and high schools. As a response to the criticism against advertising to kids, it announced, it would also end the practice of distributing book covers with the c.o.ke logo (even while the vending machine signs and scoreboards stayed).

As soft drink executives hunkered down at an industry conference in New York City at the end of 2003, the mood was grim. c.o.ke's sales growth for the year was a disappointing 2 percent overall, and sales volume of Coca-Cola Cla.s.sic actually declined declined 3 percent. Then there were other problems: A young accountant recently laid off by c.o.ke, Matthew Whitley, had lashed out with allegations that c.o.ke had committed fraud in consumer tests for a new frozen c.o.ke drink at Burger King. According to Whitley, the company had hired thousands of young people to buy the drink, skewing results. Eventually c.o.ke admitted the scheme, settling for $21 million. In separate proceedings, c.o.ke's practice of "channel stuffing"-selling more syrup to bottlers than they could sell in order to pump up c.o.ke's growth targets-finally caught up with it when the Securities and Exchange Commission opened a case against the company, eventually finding that the company had made "false and misleading statements," though c.o.ke paid no fine. 3 percent. Then there were other problems: A young accountant recently laid off by c.o.ke, Matthew Whitley, had lashed out with allegations that c.o.ke had committed fraud in consumer tests for a new frozen c.o.ke drink at Burger King. According to Whitley, the company had hired thousands of young people to buy the drink, skewing results. Eventually c.o.ke admitted the scheme, settling for $21 million. In separate proceedings, c.o.ke's practice of "channel stuffing"-selling more syrup to bottlers than they could sell in order to pump up c.o.ke's growth targets-finally caught up with it when the Securities and Exchange Commission opened a case against the company, eventually finding that the company had made "false and misleading statements," though c.o.ke paid no fine.

Far from c.o.ke's glory days in the 1990s, the picture was one of a company willing to do anything, legal or illegal, to sell more soft drinks. Nothing made the company look so bad, however, as its insensitivity on childhood obesity. In one 2003 poll in California, 92 percent of respondents declared obesity a serious problem; 65 percent blamed food and beverage company advertising as an important contributor; and 66 percent felt the best solution was tougher regulation in schools. At the soft drink industry's year-end meeting, CEO Douglas Daft directly acknowledged the issue, calling obesity the biggest challenge the industry had faced in fifty years. Giving cheer to his fellow executives, however, he a.s.sured them "a simplistic piece of government regulation will not solve the problem," an idea he brushed off as "absurd and outrageous." But that was exactly what activists were now gearing up to do.

The first anti-soda bill was submitted by longtime health advocate and state senator Deborah Ortiz in California in 2002, shortly after Jackie Domac's health cla.s.s booted c.o.ke out of Venice schools. If pa.s.sed, it would categorically ban all soda in schools K-12. Immediately, c.o.ke's lobby machine descended upon Sacramento. According to Domac, legislators would slip out the back door while she and her colleagues were waiting to meet them, later emerging in the hall talking with a c.o.ke lobbyist. At the same time, a host of industry-paid experts testified against the bill on nutritional grounds (including one nutritionist representing CCF who did not disclose his affiliation). In the end, the bill pa.s.sed, but only after being watered down to apply solely to elementary and middle schools, exempting high schools. That effectively gutted the bill, since most soda in California was sold just in high schools anyway. was submitted by longtime health advocate and state senator Deborah Ortiz in California in 2002, shortly after Jackie Domac's health cla.s.s booted c.o.ke out of Venice schools. If pa.s.sed, it would categorically ban all soda in schools K-12. Immediately, c.o.ke's lobby machine descended upon Sacramento. According to Domac, legislators would slip out the back door while she and her colleagues were waiting to meet them, later emerging in the hall talking with a c.o.ke lobbyist. At the same time, a host of industry-paid experts testified against the bill on nutritional grounds (including one nutritionist representing CCF who did not disclose his affiliation). In the end, the bill pa.s.sed, but only after being watered down to apply solely to elementary and middle schools, exempting high schools. That effectively gutted the bill, since most soda in California was sold just in high schools anyway.

Over the next few years, the California experience would be repeated over and over in other states, with c.o.ke leading the way to kill anti-soda bills. "When it came to the two major companies, Coca-Cola stood out as the particularly bad actor," says Michele Simon, head of the Center for Informed Food Choices and author of Appet.i.te for Profit Appet.i.te for Profit. "They were just nefarious and nasty in their tactics, sending teams of lobbyists to state capitals to lobby hard against the bills."

The most notorious example of c.o.ke's lobbying was in Connecticut, where legislators introduced the most sweeping anti-junk food bill to date in 2005, proposing a complete ban on selling anything but water, milk, and juice during school hours. For this battle, c.o.ke and Pepsi spent a combined $250,000 on lobbying, c.o.ke paying $80,000 up front and an additional $8,000 a month to hire Sullivan and LeShane, the most influential lobbyist in the state. Patricia LeShane, in fact, was a large contributor and campaign advisor to Connecticut governor Jodi Rell.

"It's not a level playing field," says Simon. "Here we are doing cute things like putting sugar in a bag to show how much is in a can of c.o.ke, and meanwhile, c.o.ke is having these closed-door meetings making deals over campaign contributions. These multinational companies have many times more over the resources than the average mother or teacher or nutrition advocate." In the debate over the bill, lawyers for c.o.ke, which had the majority of pouring-rights contracts in the state, selectively shared revenue data with legislators in opposition. The debate in the House was the longest in the Connecticut legislature in 2005, stretching for eight hours, during which time opponents, according to The New York Times The New York Times, "derided their colleagues for second-guessing local superintendents and school boards"; some even reminisced about painful times when their parents had denied them candy as children. Pus.h.i.+ng the situation to the point of absurdity, a "well-stocked" cooler of c.o.ke mysteriously appeared in the Democratic caucus room on the night of the vote.

Lost in the debate was the support of 70 percent of the public, according to one poll, along with the American Academy of Pediatrics, the state PTA, and other public-interest groups. Once again, the bill pa.s.sed, but not without a provision allowing sales in high schools. The biggest shock, however, came when Connecticut governor Jodi Rell vetoed the bill, accusing it of "undermin[ing] the control and responsibility of parents with school-aged children." The justification was ironic, to say the least, given the lack of control parents and teachers had over the exclusive beverage contracts.

Even while, for the time being, it held the line against the onslaught of anti-soda legislation, c.o.ke was reeling from the suddenness of the backlash against soft drinks-not only in the United States but in Europe as well. The United Kingdom's Food Standards Agency was already making noises about binding regulations against soft drinks; and in France, lawmakers voted to ban all vending machines from elementary and middle schools in the summer of 2004, forcing companies to remove them entirely by the end of the school year. Back in the United States, CCE's John Downs admitted to The Atlanta Journal-Const.i.tution The Atlanta Journal-Const.i.tution that the company was blindsided by the attack. "Clearly we are playing catch up," he said. that the company was blindsided by the attack. "Clearly we are playing catch up," he said.

By late 2004, however, industry began to formulate a line of defense, not just in the back rooms of state legislatures, but in its public image as well. For starters, the National Soft Drink a.s.sociation changed its name to the American Beverage a.s.sociation "to better reflect the expanded range of nonalcoholic beverages the industry produces." Shortly afterward, the group's president of fifteen years resigned, putting in charge a new director, Susan Neely.

Most recently a PR exec in the Department of Homeland Security, Neely had previously created the "Harry and Louise" ads that torpedoed the proposed health-care legislation during the early years of the Clinton administration. Now she took the helm specifically to deal with the obesity crisis. She laid out an immediate new strategy: simultaneously denying soda's role in causing obesity and presenting industry as part of the solution. "The industry thinks [obesity] is a real concern and something we as a country need to address," she said. "What we are concerned about is when state legislators or anyone else tries to leap to quick solutions to a complex problem."

At the same time, a new white knight rode in to rescue c.o.ke itself. Since Goizueta died and Ivester was pushed out, the company had drifted aimlessly under the leaders.h.i.+p of CEO Douglas Daft. Buffeted by the obesity crisis, he turned the company away from sugary soft drinks, emphasizing other brands such as Powerade and the new diet drink c.o.ke Zero. In March 2004, c.o.ke created the Beverage Inst.i.tute for Health and Wellness, a new organization with an Orwellian name, whose mission was to promote "global health and nutrition." The new inst.i.tute sponsored a conference in Mexico City that fall to explore the ways in which sugar might be nutritionally beneficial. But that did little to restore investor confidence. While PepsiCo's stock rose 74 percent, c.o.ke's fell 28 percent during Daft's stewards.h.i.+p. Morgan Stanley's Bill Pecoriello, the dean of beverage a.n.a.lysts, predicted stagnation in the U.S. soft drink market for the next five years, writing that "the glory days of the big ma.s.s-marketed soft drink brands are probably over."

c.o.ke's board had had enough. By the middle of 2004, it had quietly pushed Daft out. Amid intense speculation, the man who emerged to take his place was Neville Isdell, a thirty-five-year veteran of the company who had retired after being twice pa.s.sed over for the top job. A patrician-looking man of Irish descent, Isdell had grown up in Zambia and studied social work before deciding-as he put it-that he could "help more people by working for Coca-Cola than I would be able to individually as a social worker." From the moment he arrived, he made his message clear: The future of c.o.ke lay not overseas or in health beverages, but in the core of the brand-carbonated soft drinks, and in its core markets-the United States and Europe.

Isdell predicted it would take eighteen to twenty-four months to turn around the company's fortunes-a remarkably accurate prediction in retrospect. "I came back to the Coca-Cola Company to make sure that we are the leading growth company in our industry," he said, reiterating on another occasion: "Regardless of what the skeptics may think, I know that carbonated soft drinks can grow." Almost immediately, he committed an extra $400 million to marketing and innovation, mostly for cola drinks. In public appearances, he adopted an almost identical tack to the ABA's Neely-denying soft drinks' role in the obesity epidemic, while at the same time offering up the industry as part of the solution to the problem. "Carbonated soft drinks are going to be carriers of health and wellness benefits," he a.s.sured a.n.a.lysts in a November 2004 conference call. At a food industry conference, he added without irony: "Healthier consumers are going to be good for us. . . . They will grow older, healthier, wealthier, and hopefully therefore able to buy more from us. Which at the end of the day, let's face it, is our goal."

In the meantime, the juggernaut of anti-soda legislation continued to roll over statehouses. By this time, Chicago and New York had joined Los Angeles and Philadelphia in banning soda on the city level. The first hole in the dike keeping sugar-sweetened soda in high schools, however, started at a small middle school in New Jersey. In April 2005, students at the East Hampton Middle School boycotted food from their cafeteria, demanding they receive healthier options. A few months later, New Jersey pa.s.sed the first state junk food ban with a ban of soft drinks in high schools. The soft drink companies got together to debate new guidelines, emerging in August with rules nearly identical to those c.o.ke had pushed all along-no sugar soda in elementary schools; no soda in middle schools during the day; and half non-soda choices in vending machines in high schools.

But that wasn't enough to stave off soda's biggest defeat yet. Three years after California's anti-soda bill went down in defeat, new governor and former bodybuilder Arnold Schwarzenegger championed a new bill to victory that included a blanket ban on all soda in schools-including even diet drinks. When Jackie Domac heard the news, she was ecstatic. "I was very, very happy because I felt like my students' efforts had really come to fruition," she says. Her only disappointment was that the law included a long phase-in period; schools wouldn't be required to comply until July 2009.

No Sundblom Santa Claus could cheer the c.o.ke faithful when it got the news just before Christmas 2005 that PepsiCo had for the first time ever pa.s.sed c.o.ke in total market capitalization-$98.4 billion to $97.7 billion. Much of that rise was based on Pepsi's food divisions; c.o.ke was still the undisputed leader in selling soda. At least there was a bright spot with the first inkling that Isdell's strategy paid off. The company saw a 4 percent increase in all products, including a 2 percent rise in carbonated drinks in the last quarter. "There is growth still in carbonated soft drinks and we have demonstrated that," crowed Isdell.

Emboldened by the rising tide against soft drinks, however, activists were preparing for their endgame. Finally, they had a plan to make Big Soda into the next Big Tobacco and turn the c.o.ke polar bears into Joe Camel. They were going to sue.

The window outside d.i.c.k Daynard's office at Boston's Northeastern University still says "Tobacco Control Research Project." Inside, the decor includes several antique tin cigarette advertis.e.m.e.nts ("Chesterfield-They outside d.i.c.k Daynard's office at Boston's Northeastern University still says "Tobacco Control Research Project." Inside, the decor includes several antique tin cigarette advertis.e.m.e.nts ("Chesterfield-They Satisfy Satisfy!") and a stuffed Joe Camel atop a bookcase stuffed with binders labeled "Philip Morris," "Brown & Williamson," and "R. J. Reynolds," along with bound back issues of the Tobacco Industry Litigation Reporter Tobacco Industry Litigation Reporter. Daynard has been called the "intellectual G.o.dfather of tobacco litigation," and that's by his detractors. He was one of the original lawyers behind the lawsuits against the tobacco industry for fraudulent practices in the 1990s. That campaign succeeded in 1998 with a $250 billion settlement by the tobacco companies, who admitted they'd lied about the addictiveness of their products, followed five years later by a global tobacco treaty to limit cigarette sales overseas.

In the summer of 2005, however, he was pursuing a new quarry-soda. "The number of a.n.a.logies [is] very surprising," says Daynard, now director of something called the Public Health Advocacy Inst.i.tute (PHAI). "You are dealing with an addictive product sold to kids, where, if not the addiction, at least the taste is acquired at a young age. You are dealing with a product that, at least when initially produced, was not understood to be deleterious, yet as the evidence kept coming in, companies kept marketing it and stonewalling."

The idea of suing the soda companies over the issue of childhood obesity had been percolating since a conference organized by PHAI in 2003. As long as the anti-obesity advocates were forced to go after soda one school or one state at a time, they reasoned, c.o.ke and Pepsi could stone-wall indefinitely. If they were going to succeed, they'd have to speak the language companies understood-hitting their bottom lines with legal damages, or besmirching their brands so badly they'd be forced to settle.

Shortly after the confab, one of the lawyers, John Banzhaf, threatened to sue the Seattle School Board if it renewed its contract with c.o.ke, but eventually backed down. It was one thing to brand multinational corporations as greedy, but it was simply too risky to go after a school that was already hurting for cash. It took another two years for lawyers to get up the courage to go after those they argued were really calling the shots: the companies themselves. "I look at c.o.ke and Pepsi as the Colombian cartel, the bottlers are the middlemen, the school is the one who is actually selling the drugs," reasons Stephen Gardner, litigation director for the Center for Science in the Public Interest, whic