Coke's swoon tough for Atlanta to swallow

ATLANTA — For nearly a decade, Theodore Parrish, a 33-year-old investment-portfolio manager, has championed PepsiCo stock from Atlanta, the hometown of Coca-Cola.

"Oh, man," he said, "it's a difficult path to take."

His belief in PepsiCo's diversification — soda makes up less than 20 percent of PepsiCo's sales, compared with 80 percent of Coca-Cola's — leads to awkward silences with Coke executives at golf tournaments and irate phone calls from Coke investors who hear him on the local radio.

Recently, when PepsiCo surpassed Coca-Cola in market value for the first time in 112 years, Parrish enjoyed a moment of vindication.

"I just regret it's taken so long," he said. "People here take Coke too seriously, absolutely too seriously."

In Atlanta, a Coke is not just a Coke: The caramel-colored soda invented by a local pharmacist more than a century ago is an elixir; it cures headaches and boosts civic pride.

Dr. John Pemberton invented Coca-Cola in 1886. Atlanta's fortune has been bound with Coca-Cola's ever since.

Throughout the 20th century, the iconic American soda — arguably the world's most recognizable product — poured money into Atlanta.

The news that Coke shares have declined 1.2 percent in the past year, while PepsiCo shares have increased by 14 percent, has caused discomfort in the city that recently named its downtown entertainment complex Pemberton Place.

Almost every important institution here has a connection with Coke.

The Centers for Disease Control and Prevention is based in Atlanta thanks to the lobbying of longtime Coke magnate Robert Woodruff.

Emory University is known as the Coca-Cola University because more than $1 billion of its endowment is in Coke stock.

Yet things have changed since 1991, when D. Raymond Riddle, the then-president of the Metro Atlanta Chamber of Commerce, claimed that no decision was made in Atlanta without knocking on the door of Coke's headquarters.

A decade ago, Coke's market capitalization was $133 billion, more than double PepsiCo's value of $59 billion, but this year it dropped below $100 billion. Investors believe Coke has been slow to target health-conscious consumers.

In Atlanta, Coke fans insist that the company's declining stock value is temporary.

For most of the 20th century, it was almost impossible to buy Pepsi in Atlanta. Yet now Pepsi is sold at every chain supermarket and gas station in Atlanta.

Perhaps more significant, Atlantans drink Gatorade sports drinks, Aquafina water and Tropicana juices without realizing they are Pepsi products.

"Atlanta is not as Coke-centric as you might think," Parrish said. "Pepsi is already here. It has snuck in the back door."