Coke's Uncomfortable Nazi Ties
Coca Cola's social division and political bias have placed the business on the wrong side of history on multiple occasions. Unfortunately, it's becoming a pattern.
The manufactured image of Coke as an American patriotic drink, sending the message both at the front and at home that drinking Coca-Cola was synonymous with fighting against the enemies of freedom and democracy. Yet Coca-Cola was sending this message to its public. It was also doing business in Nazi Germany, where apparently the "Coca-Cola logo rested comfortably next to the swastika." This leads one to question whether or not the Company should have attempted to curtail its business in Germany, and whether it was deceptive not to do so. We can argue that companies are in the business of making money, not in the business of entering political conflicts. This is true, but perhaps if managers of a company choose to enter politics (and indeed make their product a symbol of politics) then they should feel a certain responsibility to be consistent with the side they have chosen to fight along. Not all companies set out, the way Coca-Cola did, to make their product a symbol of patriotism, democracy, purity, tradition, and America--these are large concepts that are, by their very nature, political. Thus, although all companies should have some sense of corporate social responsibility beyond mere profits, a company which has molded its image purposely to represent the very country from which it sprung should have an even greater sense of social and ethical responsibility to conduct itself honestly and consistent with the image it has created Coca-Cola had established a presence in Germany prior to WWII.
Ray Powers, an American expatriate, had started bottling Coca-Cola in Germany in 1929. During the first four years of the business, Coca-Cola sales skyrocketed from just under 6,000 cases to over 100,000 in 1933. In 1933, the same year that Hitler came to power, a German named Max Keith (pronounced "Kite") went to work for Coca-Cola GmbH, and soon Woodruff gave Keith full control of bottling operations in Germany. Keith was an ambitious man with a strong work ethic who was determined to increase Coke sales. There were several obstacles that had to be overcome; for starters, nonalcoholic beverages were considered "a syrupy concoction for children," and were not popular among German adults who preferred beer. There was also a great deal of anti-American sentiment in Germany in the years prior to WWII, and so the situation was not conducive to the high-profile marketing of American brands. Yet "[Coca-Cola] learned to combine its interests with those of Germany's Nazi rulers after 1933 in an overall harmonic symbiosis and thus even managed the impossible task of surviving the war intact as an American-owned company." Perhaps Coca-Cola's survival throughout the war is not so surprising, however, considering how deeply entrenched it was in Germany by the time the war broke out.
Ironically, Coca-Cola survived and prospered in Germany by disassociating itself from its American roots. While at home Coca-Cola was the all-American drink, Keith's strategy in Germany before and during WWII was to market Coke as a German drink, appealing to industrial workers to "Mach doch mal Pause" (Come on, take a break). One year after 1933, Coke's output had already more than doubled to 234,000 cases. Some suggest that Coke's success was directly related to the "striking parallels" between Coca-Cola GmbH and the nation at large. Hitler was a proponent of American mass-consumption and welcomed America's efficient methods of production (although he was anti-American in all other respects). Keith's looks, and personality have been compared to those of Hitler, and Keith's enthusiasm for Coke was seen by some of his employees, who were often overworked, as evidence of his fanatical tendencies. It seems fairly clear that Coca Cola and German government interests overlapped. The Nazis regarded mass-production and mass-consumption as crucial building blocks of their new society, and they must have been impressed by Coca-Cola's modern means of producing a uniform product. Additionally, Coke's advertising strategies reflected values central to the Nationalist-Socialist society.
Keith supplied Coca-Cola for the athletes and visitors at the 1936 Berlin Olympics, where Hitler was the proud host to the nations of the world, and where Woodruff was a guest. An abundance of Coke advertising supported the Third Reich. Keith zeroed in on special events (as Woodruff had done in America) to further Coke's image, not as an American drink this time, but as a German drink in Nazi Germany. For example, Coca-Cola appeared at Hitler youth rallies, as "Coca-Cola trucks accompanied the marchers, hoping to capture the next generation." In 1937, at a "Working People" Exhibit displaying the accomplishments of the German worker during the first five years of Hitler's rule, Coca-Cola set up a miniature bottling plant "with a miniature train carting Kinder beneath it...at the very center of the fair, next to the Propaganda Office." In March 1938, when Hitler's troops went into Austria, Keith convened the annual concessionaire convention, with 1,500 people in attendance. Keith sat at the main table (a large swastika draped in front of him) and encouraged his workers to continue their "march to success." The ceremony ended with a "Sieg-Heil" to Hitler. In April 1939, at the tenth anniversary of the German Coca-Cola business, Keith gloated that the past year had been historic because Hitler had annexed Austria and Sudentland; yet the spread of Coca-Cola during 1938 was a close second. This strategy of direct association with Nazi leaders and of lending support to events propagandized by Nazi ideology sent a powerful message to the German consumers and government by signaling that Coca-Cola was on Germany's side.
This show of support for Nazis was perhaps an aggressive advertising technique designed to combat slander against the company. In 1936, Herr Flasch, who manufactured an imitation drink called Afri-Cola, began circulating flyers depicting Coca-Cola bottle caps from the U.S. with Hebrew inscriptions. Although the inscriptions were nothing but a sign that Coke was kosher, the flyers claimed to prove that Coca-Cola was a Jewish company. Sales plummeted, and Nazi party headquarters cancelled their orders. Keith denounced the accusations in The Stuermer, the official Nazi publication renowned for its vicious attacks against Jews. Coke was able to survive the fiasco, probably through the aggressive marketing techniques described above. Again, ironically, the Coke bottles in question pronounced that they were kosher to appeal to the American Jewish population at home; yet here was Keith, denying that Coca-Cola was a Jewish company, because to be a Jewish company would be a terrible thing.
Coca-Cola faced other problems in Germany, problems that the company dealt with through behind the scenes of political maneuvering. In 1936, Hermann Goring, Hitler's designated successor, introduced a Four-Year Plan, which restricted imports to a bare minimum in order to make Germany self-sufficient and ready for war. Although Coca-Cola tried hard to convince Goring that it really was a German business that deserved government support (it certainly conducted itself as a German business), Goring wouldn't budge. The supply of U.S. concentrate to Germany seemed doomed, "until Robert Woodruff pulled his magic strings." Woodruff used his New York banking connections to influence Goring to permit the importation of Coca-Cola concentrate. Some suggest that the Company may have offered a bribe to Goring to secure the import license. In order to reduce the imports to a minimum, Keith began making his own concentrate so that he needed only Merchandise No. 5 and 7X (comprising the secret formula) from America. Woodruff at the time apparently toyed with the idea of producing even these ingredients inside Nazi Germany if war broke out, but he finally abandoned the plan as impractical. This is the same man who pushed the image of Coca-Cola as the American patriotic drink, the same man who, in a show of patriotism, swore that all U.S. soldiers would have Coca-Cola wherever they went. Woodruff had obviously expected the war when he considered the possibility of making the ingredients in Germany and clearly had no qualms about providing Coca-Cola to both Germans and Americans. Yet by perpetuating the image of Coca-Cola as a symbol of freedom and democracy grounded in America, Woodruff should have felt more of an obligation to be true to the image he had created. If Coca-Cola had not done business in Nazi Germany, undoubtedly profits would have been lost, but surely a company that prides itself on its image should not abandon its image simply to turn a profit.
It is interesting to note that in 1939, when Hitler's troops rolled into Poland, and England and France finally declared war, Coke (fearing supply of concentrate would be cut off by the exigencies of war) invented Fanta as an alternative drink to see the Company through the war. Fanta is still a brand of the Coca-Cola Company in wide circulation today around the world; what many may not know are those origins in Nazi Germany.
It is not surprising that Coca-Cola survived the war, since Coca-Cola was part of the Nazi state. The Company went well beyond mere complicity to outright endorsement of the regime at different times, as the examples above show. Strangely enough Americans were not aware of Coca-Cola's activities in Germany and so did not appreciate the contradictions inherent in Coca-Cola's advertising during WWII. However, in the years to come, people would question the image of Coke as a symbol of goodness, both in the U.S. and in countries abroad.