The Coca-Cola Fiasco

The world of sports is no stranger to fame, and fame as it is brings along controversy.
Recently, Portuguese professional footballer and global icon, Cristiano Ronaldo caused quite
a stir at one of his pre-match press conferences. Since it is one of the main sponsors of UEFA
Euro 2020, Coca-Cola is being placed in front of players and managers at press conferences
before and after matches, but the company could not have known what this marketing
strategy will prove to be. On June 14, when the Juventus forward was seated for a pre-match
press conference, he picked up and removed two bottles of the sugary drink and pleaded with
the people to drink water instead. This little action triggered a large number of reactions.

People have always found the relationship between financial markets and news, to be very
peculiar. Every major news agency reported that Ronaldo's stunt had wiped away $4 billion
from the world's leading soft drink producer's market capitalization. But as a matter of fact,
this was not the case at all.

Coca-Cola, the US-based multinational has a total market capitalization of around $235
billion, $4 billion of what is just about a 1.7%. On 11th June, two days before the press
conference, the Coca-Cola stock (KO) closed at $56.21. Fast-forward to 14th June, Monday,
the morning of the press conference, when the markets opened after a two-day break. At 9:30
a.m. EST, the stock opened lower than Friday's close, and at 9:40 a.m. EST, the stock had
rallied downwards with an LTP of $55.26 and a loss in market capitalization of 1.6%. The
same morning, 7000km away from the New York Stock Exchange, in Budapest, Ronaldo
picked up those two coke bottles, but at exactly 9:43 a.m. EST, when the $4 billion loss had
already taken place. Thus, it was not Ronaldo who drove the market down. But what was it
after all?

The Coca-Cola Fiasco 1

 In fact, on June 14th, the whole market was generally trading down and the soft drink
multinational was suffering from becoming ex-dividend. Heading into that press conference,
Coca-Cola had just reached a new short-term high. This newly reached high matched up with
the level of coke's Resistance, which is, in simpler terms, a ceiling which the stock price
generally bounces off and goes down. As observed in the candlestick chart of KO, this has
been a general movement in this stock price.
Keeping aside the overly popularized financial impact, this action by Ronaldo did stir up
some other things. Ronaldo set off a trend in the UEFA Euro 2020. Soon after some time,
Italian midfielder Manuel Locatelli copied Cristiano's actions, moved two bottles of Coca-
Cola placed before him, and then laughed it off. Another midfielder, Scotland's John McGinn
asked "Any Coke?", sitting down at an empty table for the press conference.

Among others, French National Paul Pogba, a devout Muslim, picked up a bottle of Heineken
and put it down on the floor ahead of his game, as drinking alcohol is forbidden in Islam. In
the meantime, Ukraine captain Yarmolenko moved both Coca-Cola and Heineken bottles
closer and asked the sponsors to get in touch with him. The Russian coach Cherchesov
countering Ronaldo’s stance picked up the Coke bottle and took a sip at the press conference.

As we have established, the action did not have any major financial implications, but it was
pretty successful at spinning the world of marketing and media management into a frenzy.
Every big and small company used this event to put out marketing campaigns featuring press
conference-based graphics and pun-based ads. From Paytm editing two "Lemon Soda"
bottles at Ronaldo's table to Fevicol sticking their bottle to the table, we saw it all.

The Coca-Cola Fiasco 2

 The little incident went viral and as everyone in the world was tweeting and chatting about
the same, each corner of the marketing world saw a different aspect of this action. Most of
the people believed that this would cause a few dents in the brand image of the soft drink.
With an increasing trend of healthy eating and a gradual transition into nutritional and healthy
alternatives of living, this could also prove to be the start of something catastrophic. The
company, despite owning over 400 brands, is still heavily dependent on the flagship product,
Coke.

Another tangent to this little stunt could be seen in the form of positives that arise from sports
sponsorships and the newly formed, influencer marketing. Even though the price of Coca-
Cola rose by 30 US Dollar Cents immediately after the press conference went live, and the
brand name was in the news for a whole two-three days, calling this positive publicity would
be too far of a stretch.

Living in 2021, we have seen sports persons, movie stars, and all other famous personalities
endorsing a huge variety of brands. We have seen players such as Virat Kohli bagging deals
worth $110 Crore INR, back in 2017 and every startup trying to get as big a star as they can
for their advertisements. The promotion industry is a hollow one, and the person endorsing a
product is very rarely a user of the same. But seeing a global superstar, endorse something
out of his own will, was surely a treat for all of us.

The Coca-Cola Fiasco 3