Part 3 (1/2)

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.”