Corperate Crisis - The Belgium Incident

On June 13, 1999, the Coca-Cola Company recalled over 15 million containers of the soft drink after the Belgian Health Ministry announced a ban on Coca-Cola's drinks, which were suspected of making over 100 school children ill in the preceding six days. This problem shook the entire country of Belgium not only because there was suspect that the product made school children sick, but especially because the Coca-Cola Company was a trusted corporation. As a result, The Coca-Cola Company, in cooperation with the Belgian Health Ministry, recalled its products from Belgian stores.

Coca-Cola made a great effort to eradicate the problems in production that caused this crisis. The company quickly identified the two specific production and distribution problems that were linked to the sickness in the school children. The two problems that were identified by Coca-Cola were:

(1) ‘‘Off-quality’’ carbon dioxide that affected the taste and odor of some bottled drinks.

(2) An offensive odor on the outside of some canned drinks. The odor appeared to intensify when the cans were stored in vending-machines.

After the investigation of the recalled product and due to Coca-Cola's commitment to its consumers, "on 22 June 1999, the Belgian Health Ministry lifted its ban on CCC trade-mark products (except for those products sold in vending-machines, pending further review) on the condition that CCC and CCE use fresh basic materials, conduct a thorough cleansing of the plants, enhance current safety measures, as well as take other steps." Ivester followed up this progress with a company statement:

"We respect the Ministry’s obligation to the people in these times of deep sensitivity to public health issues. Nothing is more important than protecting the public’s health, and we have worked very closely and intensively with the Ministry, providing significant amounts of information confirming complete confidence in the safety of our products and packages. He announced: We let down the people of Belgium, and we’re sorry for that, but now we’re committed to do what it takes to earn their complete trust again"

The only thing that I was taken back on was the fact that it took Coca-Cola one full week to make their initial public statement. During the company's silence it is no doubt that rumors had run rampant about the quality and safety of Coca-Cola beverages; not only in Belgium, but also around the world. The Coca-Cola chairman and CEO, Doug Ivester, responded with the company's first public statements addressing the production and distribution problems and offering the company's apology to those affected and the people of Belgium.

"The Coca-Cola Company’s highest priority is the quality of our products. For 113 years our success has been based on the trust that consumers have in that quality. That trust is

sacred to us. I want to reassure our consumers, customers, and government officials in Europe that The Coca-Cola Company is taking all necessary steps to ensure that all our products meet the highest quality standards. Nothing less is acceptable to us and we will not rest until we ensure that this job is complete. We deeply regret any problems encountered by our European consumers in the past few days"

If I were in charge of Coca-Cola's PR department I would make sure that the company was always on its toes just in case an event like this was to occur. That way, if a crisis like this was occur the public statement would be made without delay. It is very important that a company takes the blame for any situation and/or crisis it is responsible for and to address the issue quickly. In Coca-Cola's case, the PR team was slow to respond to this issue; which may have played against their favor. The cooperation and efforts that the Coca Cola company made after the fact to rebuild their image and to show dedication the people of Belgium and the world were sincere, which is why the Belgian Health Ministry re-instituted Coca-Cola into the country again.

source: http://www.fh-fulda.de/fileadmin/Fachbereich_SW/Downloads/Profs/Wolf/Studies/belgians/belgians_crisis_management.pdf

Investor Relations

The Coca-Cola Investor Relations information and Annual Report can be found here.

Coca-Cola Annual Report:

The Coca-Cola annual report incorporates a mixture of both straightforward marketing and economical information regarding the past performance, current performance and predicted performance of the company. There is no "slick-marketing" techniques being carried out in the 2008 Annual Report, but rather an attractive angle on the performance of the company in which the company boasts its success. The Annual Report uses many graphics and images and puts impressive figures in bold, large font. It is beneficial for a company such as Coca-Cola to boast its success to investors considering the main goal of these reports is to give investors confidence and a reason to put money into the company. Coca-Cola posted their annual SEC (Securities and Exchange Commission) 10-K (annual) filing in addition to a personable description of the Coca-Cola company of the year 2008; its goals it had set, achieved, and is making. To me, the goal of the Coca-Cola annual report was to tell a little about its impact on the world in 2008. The annual report gives Coca-Cola the ability to reach out to its consumers, investors, and employees in an honest and straight-forward fashion. Sure the report contains figures, but it also contains a little perspective from within the inner workings of the company to see the direction in which the company plans to take in the future.

Letter from the CEO:
The messages that the CEO and President of Coca-Cola are sending to investors are that Coca-Cola is a company of a long standing reputation of impressive growth and prospering business. The CEO and President address the problem of the economic crisis in 2008 and assure investors that Coca-Cola is not only still performing above expectation, but also expanding.

The tone of this letter is assuring, confident, and sincere. It was definitely constructed to be an instrument of confidence. Although the letter boasts Coca-Cola's success since its incorporation, It does not brag; it only states its achievements. It is definitely a credible publication that is glowing yet humble; there is always work to be done (which is the feeling I get when I read the annual report). Coca-Cola is one of the top trademarks in the world for a reason, and that reason is because Coca-Cola strives for better even when they have the best. Investors should be confident and assured when reading this letter based on the Company's performance and its bold intentions for the future.

Most Recent News Release

The latest news release relating to the company's earnings is written in a reader-friendly language which promotes all those who are interested in the company's business, including, but not limited to investors, consumers, employees; a chance to be able to track Coca-Cola's performance. An interesting note to ad about the involvement of those who are interested in the business of Coca-Cola is that the Coca-Cola Enterprise is making their quarterly conference call with the cheif executives a live podcast online for anyone with an internet connection to tune into. This makes people interested in becoming involved with the company thus creating more investors which ultimately increases stock value. Very nice PR Coke, very nice...

The news release is believable because the quotes that are made are back by figures of the year's and quarter's earnings from around the world. I would assume that this would instill confidence in the investors based on the great performance Coca-Cola pulled out of the 2009 third quarter. There is no bad news within this news release because it deals mostly with financial performance. The CEO of Coca-Cola Enterprises, John F. Brock, is quoted saying "“Year to date, we have achieved strong profit growth through successful execution of brand and marketplace initiatives and efficiency and effectiveness programs,” said John F. Brock, chairman and chief executive officer. “Going forward, we continue to develop solid business plans for 2010 that will enable us to increase the efficiency and synergy of our system and deliver consistent, balanced growth.” If I was an investor I would surely be confident in this company. I mean...let's be real it has it all, a world renown image, financial growth, and a CEO that won't settle for the best. Could an investor as for more?