What Coca-Cola Can Do to Your Brand

Published on August 13th, 2010 | by

A few weeks ago, I wrote a piece on the minority stake that Coca-Cola had taken in Honest Tea. As a follow up to a New York Times small business case study, the article looked at how a small business built on specific social and environmental standards would fair with investment from a large beverage producer (with what some would say a less than stellar CSR record).

More recently I came across another small(er) company from England called Innocent. Innocent is in the business of making smoothies and Coca-Cola, from the looks of it, is interested in buying as many beverage companies as possible. In a move similar to that of the Honest Tea deal, Coca-Cola began with an 18% stake in the company last year and has since upped the ante 40% to 58%. Like Honest Tea, the CEO of Innocent has stated that the mission and the values of the company have not changed due to the investment and that the company is functioning the way it always has, with an important new partner. This maybe true, but perhaps there is something else for Innocent to consider.

The Ethical Consumer Research Association, which is a UK organization that rates businesses based on, believe it or not, various ethical metrics relating to business operations has dropped Innocent’s score from 8.5 to 5 based on the new partnership with Coca-Cola (admittedly the ratings were out of 20 so one can not exactly claim that Innocent was all that “innocent” in the first place nor was it a major change, but that’s another issue). Issues cited which resulted in the score reduction have been Coca-Cola’s excessive water usage, trade union suppression and the general unhealthy nature of parts of the company’s product line.

While The Ethical Consumer may not be the Global Reporting Initiative, it is interesting to consider not only the tangible changes that a business may experience due to investments made by larger companies with questionable records, but the effect on brand reputation for the small guy. Of course, goodwill is always much tougher to quantify, but it is an important aspect of the business that small businesses must consider when the money is on the table.

Image Credit by viZZZual.com via Flickr under a CC license


About the Author

Jonathan has worked in both journalism and various facets of small business development over the past eight years. Most recently, he graduated from the Monterey Institute of International Studies (graduate school of Middlebury College) in 2010 with an MBA and an MA in International Development Policy. His interests include SME development and its role in economic growth, particularly in Sub-Saharan Africa as well as how CSR/Sustainability measures impact both business operations and the communities in which businesses operate. While at MIIS he worked as a summer fellow involved in small business consulting in Accra, Ghana and was an active member of the MIIS Net Impact chapter. As a life long traveler, Jonathan has been fortunate to have lived in, worked in or visited over 20 countries on 5 continents and he truly hopes that he will be able to continue this trend.