Sunday, May 24, 2009

Squeezed New Book

Squeezed:A new book by Alissa Hamilton is hitting the bookshelves May 26. The book chronicles the history of orange juice and deals with some of the sharp tactics used by Pepsi (NYSE:PEP) which owns Tropicana and Coca Cola (NYSE:KO) which owns Minute Maid. The glass of OJ that you like to enjoy is not as fresh as you may think.

According to the author when fresh squeezed OJ is processed its flavour is altered. In order to restore the finished product to something that tastes like fresh OJ, flavour packs are added to the juice. The flavour packs are individual chemicals sourced from OJ and then recombined. This explains why the corporate product tastes different from fresh squeezed home made.

Not a crime, but the Pepsi and Coke have been very quiet about the whole thing because they do not want you to know about this secret process. As consumers become more aware of food sources and processing Pepsi and Coke will have to account more and more for this sleight of hand. The financial ramifications for Pepsi and Coke are huge. The governance issues for Boards of Directors and senior officers are growing as they continue to promote an inaccuracy.

Watch for this one to eventually bite Pepsi and Coke. They will probably resist and not want to change their old short term profitable ways. Are they killing valuable brands with this Trojan Horse?

210 very readable pages. See where these two companies will have problems tomorrow. Squeezed Alissa Hamilton published by Yale Books I wonder how many food analysts on Wall Street even understood that the issue existed.