How Coca-Cola and Pepsi achieved global domination

Updated by Julia Belluz on May 6, 2016, 2:20 p.m. ET @juliaoftoronto julia.belluz@voxmedia.com

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For years, we've known that soda is a major contributor to the obesity epidemic. But lately, major soda companies have gotten a lot of really bad press for trying to obscure that fact. 

There was the New York Times revelation that Coca-Cola had been quietly funding researchers and organizations that diverted the conversation about obesity away from too many calories and toward the notion that people simply aren't exercising enough.

RelatedLook at who Coca-Cola funded over the last 5 years

The company published on its website a list of all the external organizations it has funded over the past five years, to the tune of nearly $120 million. (We searched and sorted the data here. It's an astonishing list that includes the American Diabetic Association, the American Academy of Family Physicians, and the American Academy of Pediatrics.)

This didn't come as a surprise to Marion Nestle, a New York University professor who wrote the seminal tome on the politics of food (appropriately namedFood Politics). For years, she's been tracking how American eating practices are shaped by the invisible forces of industry and powerful lobbying groups.

In Soda Politics, she investigates how PepsiCo and Coca-Cola — which sell nothing more than sweet tap water — managed global domination and how that has had a terrible impact on public health.

But the tale isn't a sad one. Sales of soft drinks in the US have been declining for more than a decade. Health advocates are, in Nestle's words, winning.

Julia Belluz: How exactly did soda companies become some of the most powerful corporations in the world?

Marion Nestle: They have a product people like that’s cheap and easy to make. And they set up a business model in which everybody makes money. Within very short order, they had worked out a model in which the bottlers, transporters, servers, soda fountains — everyone was making money hand over fist. Sales grew and grew within the first half of the 20th century.

There was also a big push during World War II. Coke made a deal with the Army to provide a Coke to any soldier anywhere in the world at a nickel a piece, and they got the Army to support that. This means the Army did all the transportation and helped build bottling plants. At the end of the war — this infrastructure in place in practically any country in the world — they had a whole generation of GIs and their families totally devoted to Coke.

Afterward, it was all marketing to increasing numbers of groups, increasingly sophisticated marketing, and making sure governments allowed them to do whatever they needed to do to keep the sugar water plants up running.

All soda is is tap water, with a secret formula that isn't so secret — and an enormous amount of marketing behind it, not only in ways people are aware of, like the TV or print ads, but also all the behind-the-scenes ways these companies operate.

JB: You describe in the book how these companies used science to expand their empires and divert messaging around obesity, which only now seems to be a more widely appreciated Big Soda tactic.

(LI CHAOSHU/Shutterstock)

MN: Soda companies — and I'm talking about Coke and Pepsi — completely dominate the industry and the American Beverage Association, which is a trade association for the makers and producers of these drinks. Coke and the American Beverage Association fund a lot of research. That research — over the last 10 years or so at least — almost invariably come out with results that favor the interests of the soda companies.

There's so much research now that shows people who drink soda have more obesity, Type 2 diabetes, tooth decay, and other health problems compared with people who don't.

Companies have gone to a great deal of effort to get research that will counter that. They've been successful at partnering with scientists at universities willing to do studies for them.

In August, there was a huge revelation in the New York Times about Coke sponsorship of something called the Global Energy Balance Network. The network's purpose was to say that you didn't have to worry about what you ate or drank if you were more active. That would take care of your obesity problem.

Unfortunately, that’s not true. There was some lack of transparency on the website for the network that didn't expose Coke had paid for it — and investigators who were involved had disclosed that Coke had given them the grant funding.

There was an enormous public reaction. The president of Coke wrote an op-ed in theWall Street Journal in which he said they were suitably chastised and that he would start a transparency initiative and list all the [organizations] he funded. Now, everybody is looking to see who's been funded by Coke.

JB: In response to the New York Times investigation, Coke just published a list of all the groups it's funded over the past five years on its site. On there is everyone from medical associations to sports teams and community groups. What did you make of that? Does it go far enough?

MN: It’s astonishing. Who could possibly believe that one company would fund so many organizations, every one of them strategically identified? It would be helpful to have similar information about scientists on the company’s committees and boards.

Their funding of these groups makes a lot of sense. The funding buys brand loyalty, silences critics, heads off efforts to advise drinking less soda, and gains support for the companies when they need it.

The only company I can think of [that's done something like this] is Philip Morris, which generously funded arts organizations all over the US, putting every one of them in an awkward position. But it’s much worse for all the health organizations funded by Coca-Cola.

JB: Michelle Obama made fighting childhood obesity a priority. Do you think the White House has done enough to curb the influence of sugar-sweetened beverages on the American diet?

First Lady Michelle Obama Launches Let's Move with the NFL. (Chris Graythen/Getty Images Sport)

MN: The fact that the first lady took on childhood obesity took my breath away. I couldn't believe it. What I didn't know and still don't know is — did she know at the time she took this on how controversial it would be? Or did she think, in a naive way, that everybody would be against childhood obesity and want to fix the problem and it would be a terrific bipartisan issue?

"CHILDHOOD OBESITY SEEMS LIKE IT’S THIS LOVELY BIPARTISAN ISSUE, LIKE PLANTING FLOWERS ON A HIGHWAY. BUT IT'S HUGELY CONTROVERSIAL."

Childhood obesity seems like it’s this lovely bipartisan issue, like planting flowers on a highway. Who could be against doing something about childhood obesity? But I knew from the get-go that it’d be hugely controversial. You would have to get kids to eat less of some products, and makers of those products would be very upset.

What the first lady tried to do was partner with food companies to get them to voluntarily make changes. She has no regulatory authority, no statutory authority. She had to do it with persuasion and leadership.

So you’re really questioning her ability to persuade and lead. I don't think that's the right question. Did she go about it in a way that seems most politically feasible, and did she make any gains at all? I'd say yes. She brought the issue to the public attention in a way it had never been brought to public attention before.

JB: In the book, you chart how long it took to get soda out of schools — that health advocates started petitioning in the '60s. Why was this such a difficult battle?

MN: There are a lot of food companies who sell to kids, who expose their brands to children in schools. There's a substantial amount of money in that. There's brand loyalty.

Go beyond that, and you get into the question of nanny state-ism and personal responsibility — the idea that parents are responsible for what kids eat, not government. There are First Amendment rights to market our products to schoolkids. There are political ways in which food companies try to protect their sales.

JB: Today, Big Soda's tactics aren't as powerful as they once were — sales have been on the decline for about 15 years. What do you think were the key changes?

MN: Advocacy is working. We're taking on Big Soda and winning. There are so many examples of successes. The Berkeley soda tax was an enormous success. It passed with a 76 percent majority. They organized in every community and framed it as Berkeley against Big Soda. So anytime the soda industry did anything — like raise questions about the "nanny state" — it backfired, because everybody could see it was Big Soda exercising its muscle. It wasn't about public health.

Soda sales have fallen in recent years. (Graphic by Javier Zarracina)

The soda tax passed in Mexico because people are so worried there about what obesity is going to do to their health-care system and the population as a whole.

JB: Do you think soda has a place in the American diet?

MN: The story of Big Soda is an example of the ways food companies operate. These companies are not evil. They’re not cigarette companies. Nobody is interested in putting them out of business.

I am interested in getting them to stop marketing to children, to minorities, and to stop doing everything they can to undermine public health initiatives. Do I think sodas have a place in the American diet? Sure — just not a big one.

If I had one thing I could teach the American people, it would be that larger portions have more calories. In the case of soda, larger portions have more sugar. The amount of sugars in sodas are staggering: roughly a teaspoon per ounce. If you have a 12-ounce can, it's 10 teaspoons. If you sat and put 12 packets of sugar into a 12-ounce glass of water, you wouldn't want to drink it.

We know most people eat more than they need. In a diet where you’re eating more than you need, sugar water is not a good idea. Everybody would be healthier eating less sugar.