In the eye of the world, Coca-Cola is one of the largest beverage companies of all times. With its net worth of approximately 208 billion US dollars this year, we perceive it as a very powerful brand. But according to an unbelievable story from 2006, it is now clear that the corporation behind this renowned name has its Achilles heel as well.
You are probably asking yourself, what did I mean by that. But if we look at where Coca-Cola’s huge success stems from, we realise that this whole beverage empire and its future stand on practically only one thing – the secret formulas of its drinks. Without keeping them safe, the recipes could, in no matter of time, become publicly known and used by other manufacturers as well, which would of course result in a collapse of Coca-Cola. That is why the formulas are hidden in a highly confidential vault, for which supposedly only two people in the world know about, according to The Hustle. As they wrote, these two persons, whose names are unknown, have such valuable information that they are, for safety reasons, for example not allowed to fly in the same airplane.
Although Coca-Cola has a very strict regime of keeping their important documents safe, such a huge corporation needs many assistants and other employees to keep everything running smoothly. But the problem they face with it is their trustworthiness, and the story from 2006 is a proof how things can quickly get out of control. According to a story in The Hustle’s article, it all began with an employee named Joya Williams who, with her $50 000 annual salary, did not feel treated right. Having been an administrative assistant of the Global Head of Marketing, she had access to sensitive emails, internal documents, and yet-to-be-released products, according to Atlanta magazine. These data were then used as the core of her wicked plan, with which she completely betrayed the company.
In 2005, she met a 40-year-old Edmund Duhaney, who had just got out of prison on cocaine charges and was then searching for a job, as The Hustler reported. The magazine wrote how Williams explained to him that she had planned on selling those exclusive documents she had access to at work to PepsiCo which has been Coca-Cola’s biggest competitor. But, having signed a non-disclosure agreement, she couldn’t execute it herself and therefore needed a helper. Duhaney recommended her his buddy he had met in prison, named Ibrahim Dimson, who would have been a prefect middleman for this operation. Dimson agreed to collaborate and, under the alias “Dirk”, sent a letter in an official Coca-Cola envelope to PepsiCo’s Senior Vice President and presented himself as a high-level executive with extremely confidential trade secrets.
A few weeks later, much to the delight of the evil trio, a supposedly PepsiCo employee named “Jerry” gave Dimson a call and requested some kind of proof. He received a few top-secret documents via fax, and then, in return, paid $5 000 to show he was a serious partner. At this point, the real heist started. One night, Williams was at Coca-Cola’ s Head Quarters in Atlanta, collecting exclusive folders of paperwork and, as well as a vial of a not-yet-released secret product, putting them in her bag. Jerry agreed to purchase the collected material for $75 000, and later met with Dimson at Atlanta’s Hartsfield-Jackson International Airport in June to exchange the first part of the goods, packed in a brown Armani Exchange duffle bag, for $30 000 in cash, stuffed in a Girl Scout cookie box. Although a box of cookies always brings us joy, I bet Dimson has never been in such a whirlwind of excitement for getting one before!
Joking apart, let’s continue with the story. So, the middleman left the airport and joined his two partners in crime to divide their first payment. Ten days later, they were even more blown away of how well their plan went, because Jerry unexpectedly offered $1.5 million for the remaining trade secrets. Nevertheless, doesn’t it sound a bit too good to be true?
Right, and here we come to the plot twist – Jerry wasn’t actually a PepsiCo employee, he was a FBI Agent Gerald Reichard. About the letter they had received, PepsiCo kindly and without hesitation informed Coca-Cola which then asked FBI for help in further investigation. On July 5, 2006, the trio got arrested on charges of wire fraud and unlawfully stealing and selling trade secrets. All three of them ended up with a few years of prison sentence, with Williams getting the longest one of 8 years.
Coca-Cola and PepsiCo have been the biggest rivals since their beginnings in the 19th century, both fighting for their place in the market. They invested a lot on money into ads against each other, and in 1975, PepsiCo organized even a Blind Taste Test Challenge, according to History. Pepsi won over Coke, which heated up the so known Cola Wars in 1980s. Both of the companies brought many celebrities to their side and were trying to predominate over another. In 1996, Coca-Cola officially won the “war” with a 47% higher profit than PepsiCo, but even that was not the end. With all the ups and downs they’ve both had through history, they are still fighting for the throne these days.
Despite the rivalry, I believe PepsiCo showed its best qualities with the deed they’ve done. Playing a fair game is worth so much more than ads worth millions of dollars and having no matter how many celebrities by your side. They’ve proven their customers that they do not measure success in profit only. If they had destroyed another company, which would also result in thousands of people losing their jobs, to have put their own in a better position, what would their success be anyway? With their integrity, they have not only set an example to other corporations, but have also shown how strongly they stand behind their own brand and believe in their work. And that is powerful.
What they’ve done wasn’t just a kind, but also a very smart move. Although they did not benefit from Coca-Cola’s secret documents, the story definitely caught media attention, which has been, in this case, a good advantage for them, making their reputation even better. Also, in the world of businesses, the network that companies build with others is very important. They should never burn bridges in the good times, because they might want to cross them when having hardships.
Coca-Cola’s formulas and some of their exclusive documents belong into a group of trade secrets (also including patterns, compilations, programs, devices, methods, techniques or processes, according to US Patent and Trademark Office) – a type of intellectual property, which is crucial to companies’ development because it enables them to protect their creations and stay competitive, with their opponents not being able to copy their work. It is not only crucial for the business itself, but actually for the whole humankind. If all our new ideas and everything we had made be easily stolen and somebody else could write his name under anything just like that, we would have got caught in a vicious circle of stealing from others over and over again. As a result, nobody would have any motivation to continue researching and developing new things, so the whole world would have probably been stuck somewhere in the middle ages. That is why it is so important to give innovators and creators the credit they deserve and protect their work.
Nevertheless, stealing trade secrets has not been so uncommon in the business world. According to Los Angeles Times, Uber allegedly stole self-driving car program from Waymo. The Hustle reported about how Samsung stole information from another chip-maker, TSMC, and Facebook being accused of stealing trade secrets from a virtual-reality company named Oculus. Many of these companies are now in big trouble and the responsible people are spending their time in court, arguing for years on what really happened. So, we can only imagine how complicated might the ending of the story be, if PepsiCo would have accepted the offer. Or, who knows, maybe they did take a little sneak peek into the secret paperwork… 🙂