Cynical Marketing Case Study: Coca Cola Amatil & Mt Franklin Rip Off Breast Cancer Charity

Read on for an example of how low CCA will go to make a fast buck out of Breast Cancer, one of the most worthy charities around.

Mt Franklin is a 300M+ water brand. Coca Cola Amatil love to mention it in their annual reports because it has fat margins (cost of water: almost nothing, bottle cost declining). Nice for shareholders. Mt Franklin has enjoyed strong growth for years on end. And one of the things that has driven their growth has been an association with the breast cancer charity, National Breast Cancer Foundation.

Recently, Mt Franklin switched from NBCF (which funds research) and put their money into the McGrath foundation (breast care nurses). When they switched, they saved (i.e. effectively withdrew from charity) $100,000 a year, and kept up the “pink lids” strategy.

Now even though I’ve worked with the NBCF, I don’t have a major problem with CCA switching horses. I do have a major problem with them SAVING money on the best sponsorship platform these guys have ever had – and at the direct expense of the Breast Cancer world.

Let’s have a look at a media release typical of the muck trotted out by these clowns.

MEDIA RELEASE 18 September 2012:

‘MOUNT FRANKLIN’ EXTENDS ITS ICONIC

PINK LIDS CAMPAIGN

In a bid to empower consumers to share the McGrath Foundation message, donate and engage with the charity, ‘Mount Frankin’ has revamped and extended its famous pink lids campaign to help fund additional McGrath Breast Care Nurses in communities right across Australia.

Let’s be honest. If they really wanted to “empower” consumers to “donate” they would make a very clear per-unit donation on ALL the pink lid bottles. Something like 10c a bottle would be an absolute minimum amount I’d want to see. In fact, I’m sure most people assume the’re donating more like 20cents a bottle on what is often a $3.50 or more purchase. As you’re reading this, consider how much of your $3.50 at the corner store you’d expect to go to the nominated charity? Exactly my point. Facts are, on a standard bottle, the REAL donation to charity is a fraction of a cent. “But this year,” they would say if they were reading this, “we’re doing a 10c donation per 6L multipack.” Hmm. That’s ok. Oh, wait, hang on a minute – no it ISN’T OK! That’s 10 cents in 6.99. That’s PATHETIC TOO. Per 400ml equivalent, that’s just 0.6 cents. Well, gee, that’s SUPER generous. And this is only on the giant multipack which is a tiny fraction of their sales and only available through a sliver of independent retailers. No wonder they don’t like transparency. Hey, Mt Franklin team. I’m talking to you. When will you put your donation amount on EVERY bottle? Hey? One day I hope they’re forced to by legislation or sheer embarrassment. What CCA are really doing is USING a great charity to grow their highest margin product each year. And at a rate that costs them almost nothing. Their new base sponsorship for McGrath is $250,000. This, by the way, is NOTHING for a sponsorship being leveraged at the scale of Mt Franklin. Oh, by the way, CCA MD Terry Davis’s last reported salary & super was a blistering $7,900,000.

In addition to donating $250,000 in 2012 to the McGrath Foundation

Sorry, this needs repeating. $250k is a pathetically small donation for a brand this size. Compared to the category, compared to other sponsorships, compared to Terry’s pay, compared to what consumers  think they are donating when they choose a pink lid. Then they say this…

the multi-phased ‘Message’ campaign will see ‘Mount Franklin’ donate its most valuable real estate – its bottle – to the McGrath Foundation, enabling Australians to view and share video messages of support, using QR code technology.

Oh Please. What a press release GEM. So… Mt Franklin needs a nice sponsorship platform – but are too stingy to donate an appropriate amount. Then they claim using their pack to promote their association is a “donation.” Give me a break from this sheer bullshit. When any other sponsor gets the rights to use a platform to promote their brand, they don’t pretend that their most valuable contribution back to the charity partner is the on-pack sponsorship leverage. Helloooo CCA? Um, the stuff on the bottle is your ON PACK PROMO for your sponsorship. It’s what you do to make people buy more of your water, remember?

Remember the meetings about brand fit and sponsorship? About brand equity and making women loyal to Mt Franklin? The brand tracking from Nielsen? The brand health pyramids? Remember? Go look in your brand plans if you’ve forgotten – it’s all in there. Then take a look at your brand P&L and work out what % return you are getting from your stingy donation. And you try to tell us it’s your pleasure to give away some of your oh-so-precious label space. On it goes…

From mid-September, bottles of ‘Mount Franklin’ spring water will become a voice for the McGrath Foundation, encouraging consumers to get involved, either by donating, passing on a message or creating their own message of support.

Which all would be great – if it wasn’t for the fact that a) the sponsorship base donation of $250,000 is woefully inadequate b) the actual donations consumers are making are TINY – far less than half a cent per 400ml bottle.

‘Mount Franklin’ bottles will be given a makeover to promote the ‘Message’ campaign, with various packaging designs being rolled out over the 5- month campaign in an aim to draw attention to the cause and encourage participation. With the first phase of packaging features the phrase ‘A Message Just for You’.

Oh reading this makes me want to spew. CCA are running a 5 month promotion on Mt Franklin using Breast Cancer and have only donated $250,000 (just 50k a month). $250k incidentally was the SAME amount they donated to NBCF back in 2007 when the brand was much smaller. So in real terms their sponsorship of breast cancer charity has dropped while the costs of the charities and research have increased and Mt Franklin has grown volume year after year. (And all while they boast about their new lightweight bottles saving 35% of input PET costs). If Mt Franklin were remotely geniuine about Pink Lids being a Corporate Social Responsibility campaign, they would be committing $1M as base sponsorship. Now let’s look at this through the lens of the “CCA Behaviours” they expect of employees:

Empowering: I trust you to do your job

(No matter who it hurts).

Communicative: I hear it how it is, I say it how it is

(Unless I don’t want the consumer to know how little we contribute to the cause we leverage for 5 months a year).

Customer-Centric: The customers’ business is my business

(But screw the end consumer).

Initiating: I am proactive and positive

(At saving money).

Collaborative: CCA first, my team second

(And breast cancer victims last).

Reader John writes:

Hi, ref your rant about CCA, just bought Ansell Handy Clean disposable gloves. Woolworths price was $7.33. Pack says” 30 cents from the sale of this product will be donated to breast cancer research” and also has National B C Foundation gold partner. About 4% of retail paid, interesting comparison with the 6 pack of water I thought.
Cheers

2 thoughts on “Cynical Marketing Case Study: Coca Cola Amatil & Mt Franklin Rip Off Breast Cancer Charity

  1. I applaud you for the above information
    Mount Franklin is trying to quash any competition out there like the small spring water companies. Did you know that their spring water is acidic , about 5.2Ph which would be a great point to put across seeing cancer cell’s live in this state
    CCA are greedy and I know when there is another player out there they either smash them with price lowering or buy them out
    Good on you for bringing this to light
    Cheers
    Nathan

    • Hi Nathan

      Thanks for your comment. I’m not sure about the pH thing -are you sure their water would be that acidic, I would have expected more like 6.5 or so, slightly off neutral?

      Mt Franklin have a 25% market share of the bottled water category which is worth at least $600,000,000 and growing at 5%; they’ve managed to consistently grow much faster than this over many years in large part thanks to their pink association and its resonance with consumers.

      However, Mt Franklin still pay a flat donation of $250,000 to breast cancer charities (first National Breast Cancer Foundation, then McGrath Foundation).
      They haven’t raised this amount even by inflation! They were paying the same amount to National Breast Cancer foundation in 2007.

      This means they are, in real terms, REDUCING their donation! They should be giving McGrath $287,000 just to hold still – still an embarrassingly inadequate amount by the way – but they are saving some pennies instead.

      And Mt Franklin studiously avoids naming a per-bottle donation rate (on a per-bottle basis we’re talking teeny-tiny fractions of a cent on what is often a $3.50 purchase). Given the gap between what we know consumers will be thinking when they buy the bottle (“I’m making a difference”) and what actually happens (closer to no difference) then this looks pretty misleading and deceptive from where I stand.

      Mt Franklin PINK LIDS now seem to last 6 months, not just the original October promotion period? Getting 3 times the value from their minute sponsorship just there. Meanwhile they secure Jennifer Hawkins to promote their sparkling version (how much did she get paid I wonder)?

      So in summary we have the largest food company in Australia, with its highest margin brand (cost of goods on water….not much; plastic savings, lots) growing the brand ahead of the category by using pink lids and references to breast cancer.
      All while…
      – Misleading customers by allowing them to think they are contributing meaningfully to breast cancer when they buy a bottle (when in fact the amortised contribution is tiny)
      – Reducing their already tiny donation in real terms by not even adjusting the donation for inflation or in line with their sales increases
      – Expanding the period of time they take advantage of the association from a couple of months to half a year, to increase their leverage
      – Having the gall to proclaim an on-pack promotion for their brand is in fact “giving away their most valuable real estate for the cause”

      If the Mt Franklin brand team can sleep at night I’ll be astounded.

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