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Cokes Water Bomb the Dasani Fiasco

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Cokes Water Bomb the Dasani Fiasco Cokes Water Bomb The Dasani Fiasco NARRATOR: Coca Cola is the most successful soft drinks company in the world. But the UK launch of its bottled water, Dasani, turned into disaster when the source of the water was revealed. MALE SPEAKER: And those last two words, tap water, just suddenly made me think well, can it really be tap water? NARRATOR: As calamity followed calamity and Dasani had to be pulled off shelves completely, it seems as though Coca Cola had lost their golden touch. SIMON MOWBRAY: Week by week you were just looking at this brand and going, my god, right. What's it going to be this week? NARRATOR: Tonight the Money Programme goes behind the Dasani disaster and with exclusive access to Coca Cola tells how the launch blew up into a marketing fiasco. [MUSIC PLAYING] It was late afternoon on Thursday the 18th of March. Behind closed doors at Coca Cola's headquarters in London a crisis meeting was taking place. Coca Cola's new beverages director had just learned that new water brand Dasani has been contaminated with a carcinogenic chemical. PATRICIA MACNAMARA: Literally 1 o'clock in the afternoon I was made aware of it. And we immediately put a freeze on production and letting any other product go. NARRATOR: Coke's management gathered together to decide the fate of the brand they'd launched only five weeks before. PATRICIA MACNAMARA: The people who are on these instant management teams know who they are, it's well rehearsed. We all have bleepers so that when the call comes we instantly attend. NARRATOR: The team were facing a stark choice. Struggle on with Dasani and face even more damaging publicity or withdraw it. And that would mean derailing plans for Coca Cola to break into bottled water around the globe. The next day, the president of Coca Cola appeared on national TV to announce they were pulling out. CHARLOTTE OADES: We are simply withdrawing this as a precautionary measure. There is no, and I reiterate, there is no immediate health or safety risk at all. NARRATOR: The withdrawal of Dasani was estimated to have cost Coca Cola tens of millions of pounds. But the damage to the company's reputation was far worse. SIMON MOWBRAY: Dasani had turned out to be one of the biggest failures in UK marketing history. NARRATOR: So how could the company behind the world's most successful consumer product end up with a launch slated as the worst PR disaster of all time? Atlanta, Georgia has been the home of the Coca Cola Company since the first fizzy brown cola drink was served here in 1886. Coke was created by John Pemberton, an inventor of patent medicines on the lookout for a headache cure to sell to his customers. It was a hit from the start and before long the magic formula was selling across the globe. 1 CONSTANCE HAYS: The world seemed to love Coke. It's a distinctly American invention. There was no cola before Coca Cola, which a lot of people don't realize. Other countries had ginger ale or orange drinks, but cola is a distinctly American contribution to the world of beverages. NARRATOR: Aggressive international expansion brought Coke profits in the billions and turned them into the world's number one drinks manufacturer. Success led Coca Cola to believe that there was just no limit to the world's thirst for Coke. CONSTANCE HAYS: They coined this fairly awful phrase called share of stomach. And they figured out that their share of stomach was two out of the twenty or so drinks that people have per day. And then they thought well, let's double that. And then we'll double it after that. NARRATOR: Coca Cola's best known rival was Pepsi Cola. Invented just a few years after Coke, it had never been able to match their sales. But tastes were changing and while cola was still a big seller, Coca Cola and Pepsi were increasingly developing other drinks to meet demand. KEITH PARDY: I think if you go back to the late '70s and early '80s and everybody was into fitness and jogging and running and there was obviously a need there for people to find products that had less sugar in them. NARRATOR: Coke and Pepsi continued their battle over new brands, competing to buy in the most successful drinks. Finally Pepsi got their chance to steal a march on Coke with one of the fastest growing markets, water. By the late 1990s as interest in healthy living increased, water was booming in popularity. Aquafina was launched by Pepsi in 1997 and quickly became the number one selling bottled water in America. But while Pepsi celebrated, Coke seemed to be holding back. FEMALE SPEAKER: It just seemed that Coke has been a little slower perhaps than Pepsi in getting into these new areas. Why has that been? KEITH PARDY: I don't believe that we've been slow in moving into any of the areas. We are the largest beverage company in the world, both in terms of the carbonated side of the business as well as the non- carbonated side of the business. NARRATOR: But while the health kick had been boosting water sales, it was having the opposite effect on cola. After so many years of expansion Coke faced a defining moment. The growth in sales of Coca Cola was slowing down. CONSTANCE HAYS: I think they did reach a certain point at which the world was saturated with Coke. And I think that was a huge rude reality check for them when they finally accepted that they could not continue to grow their volume at 8% to 10% a year and their profits at 15% to 20% a year. NARRATOR: Coke couldn't afford to sit back any longer. They launched bottled water brand Dasani in the USA in 1999. By 2001 it was Americ's second biggest brand. KEITH PARDY: When we launched Dasani it was a runaway freight train. It did exceptionally well and we're just thrilled with the business. NARRATOR: Rather than selling a pure mineral water, Coca Cola, like Pepsi with Aquafina before them, used tap water from the local supply as the source for Dasani. KEITH PARDY: We get a raw material source of water and it can come from various sources because we have plants all over the country. And then we run that through a five step filtration process. And then we 2 spend a great deal of time trying to add back just the correct blend of minerals to get the taste and flavor of that water exactly on the bulls eye for what consumer is after. NARRATOR: The great American public always knew that Dasani was purified water. And it's sales just continue to grow, up 16% in the last year alone. Although spring waters had been big sellers before it was launched, Americans didn't seem to mind where Dasani started out. FEMALE SPEAKER: Dasani is one of those brands that I can trust. So it really doesn't bother me. MALE SPEAKER: No it really doesn't. MALE SPEAKER: No, it's just water. MALE SPEAKER: No, not at all. Water's water. NARRATOR: With America guzzling Dasani by the crate load, it seemed nothing would stop the brand repeating its success worldwide. But the picture looks very different on this side of the Atlantic. Europe is home to some of the biggest mineral water brands. And 97% of bottled water drunk is mineral or spring water. In the UK, sales of bottled water had been growing 20% year on year, rising to a value of GBP 1.2 billion by 2003. Behind this growth are people like Josie Anderson and Olivia Biggs, friends since school and now young 20-something professionals. Both women are pretty health conscious. The message that drinking water is good for you has certainly got through to them. OLIVIA BIGGS: You read so many articles about how it's bad for you to be drinking fizzy drinks and then you read at the same time that water's so good for you. And I think you have to actually try quite hard to be healthy and drink water and eat healthy. And drinking water's quite an easy, healthy thing to do. JOSIE ANDERSON: I am quite lucky because I actually like water. Sounds quite crazy but I do like it and I would kind of choose it as, rather than a health thing, just a drink that I like. NARRATOR: Coca Cola saw enormous potential for Dasani in the UK. And they had another incentive, Pepsi hadn't launched Aquafina in Britain. A clause in their contract with distributor Britvic prevented them launching water brands. The job of launching Dasani and shaking up the UK water market was given to Patricia MacNamara. PATRICIA MACNAMARA: Well the UK's actually fairly underdeveloped water market right now. And that's why we were interested in bringing a new water and bringing new innovation to a water category which has frankly, up till now, been fairly uninteresting. NARRATOR: Patricia's aim to liven up the boring water market was about to come true in spades. In August, 2003 Coca Cola revealed to industry insiders they were bringing a new product UK. What they called the purest water you could buy. Simon Mowbray, Marketing Editor of trade magazine The Grocer, was one of the first people to hear that Dasani was on its way.
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