Why Even Diet Soda Is Bad For You

November 4, 2012

First of all, let’s be clear that I know nothing! I’m just quoting books and stuff I’ve read.

With that qualifier out of the way, I just recently learned that there is a soda conspiracy.

More specifically, Dr Lustig calls it the Coca Cola conspiracy:

Forward to 10:55 to hear the coke conspiracy part of speech.

Reason there is a soda conspiracy:

1. Soda has a lot of salt in it: 55mg sodium/can

2. Soda has a lot of caffeine in it: stimulant, diuretic (lose free water) & addictive

3. Soda has a lot of sugar in it: to mask the salt

End result: Caffeine is a diuretic, meaning it makes us lose free water. It is a stimulant & addictive. Salt combined with losing free water makes us thirstier. Sugar masks the salt and makes the drink palatable. Sugar also gets a reward response in our brain and is addictive.

As a side note Coke also mastered their flavor profile so that the taste doesn’t get stale after drinking multiple cokes. For example, drinks like orange soda – you will get sick of it after a few cans a day. Coke on the other hand leaves no flavor trace and you can drink can after can without ever getting sick of the taste.

Thus, the end result is coke is like a self-replicating virus.

You drink it because it’s available everywhere & is a cold beverage (helping us cool down). It’s addictive & makes you thirstier. The more you drink coke, the more you’ll be thirsty and want more coke. And you’ll never get tired of the taste!

The perfect drug!

All of this equals huge profits for Coca Cola.

Diet Soda is Also Bad:

Of course, diet soda has no calories but includes all the same ingredients as regular coke: caffeine, salt, sugar substitute, zero calories & 100% addictive.

And there are studies that show diet soda wrecks our appetite, messes with our good gut bacteria and makes us gain weight. So don’t just count calories, there is a whole another layer of trickery at play here.

See: The Strange Reason Diet Soda Makes Us Fat (Men’s Health)

Warren Buffett & Charlie Munger’s Love of Coke:

We all roll our eyes because conspiracy theories are a bit out there. Even though this coke conspiracy is a proven system explained to us by a doctor, we may not want to believe it.

So imagine my surprise as I saw a capitalist’s point of view as to why Coke is one of the best companies ever.

Berkshire of course owns a large portion of Coca Cola’s shares. Relatives say Buffett drinks cokes all day and never touches water. He’s seen drinking cherry cokes at all public events & tells the crowd how great it is.

In many of his speeches, he mentions how coke is the perfect company. Its cheap syrup water means high profit margins. It’s available everywhere. It cools you down on a hot day. And the more you drink coke – the more you want coke. The Coca Cola brand is so valuable that he suggests even if someone gave him $1 billion to compete with coke, he couldn’t do it.

Buffett is the first person I ever heard mention how coke doesn’t leave a flavor profile. You can never get sick of it. (See that speech here)

Now let’s take a look at why Charlie Munger loves Coke

Here is a speech by Munger on how to turn $2 million into $2 trillion in 150 years. It’s just a brain exercise he uses to show us how to evaluate businesses using mental models from vastly different fields.

He uses Coca Cola as an example.

These are his tips on how to dominate the world if you had $2 million dollars to expand the Coca Cola business in 1884 and needed to turn it into $2 trillion dollars (even after paying billions in dividends) by 2034.

Link to full speech below – a must read for business lovers.

To start out, it is easy to decide to design our beverage for consumption cold. There is much less opportunity, without ingesting beverage, to counteract excessive heat, compared with excessive cold. Moreover, with excessive heat, much liquid must be consumed, and the reverse is not true. It is also easy to decide to include both sugar and caffeine. After all, tea, coffee, and lemonade are already widely consumed. And it is also clear that we must be fanatic about determining, through trial and error, flavor and other characteristics that will maximize human pleasure while taking in the sugared water and caffeine we will provide. And, to counteract possibilities that desired operant-conditioned reflexes, once created by us will be extinguished by operant conditioning employing competing products, there is also an obvious answer: we will make it a permanent obsession in our company that our beverage, as fast as practicable, will at all times be available everywhere throughout the world. After all, a competing product, if it is never tried, can’t act as a reward creating a conflicting habit. Every spouse knows that.

We must next consider the Pavlovian conditioning we must also use. In Pavlovian conditioning powerful effects come from mere association. The neural system of Pavlov’s dog causes it to salivate at the bell it can’t eat. And the brain of man yearns for the type of beverage held by the pretty woman he can’t have. And so, Glotz, we must use every sort of decent, honorable Pavlovian conditioning we can think of. For as long as we are in business, our beverage and its promotion must be associated in consumer minds with all other thing consumers like or admire.

Moreover, Pavlovian effects from mere association will help us choose the flavor, texture, and color of our new beverage. Considering Pavlovian effects, we will have wisely chosen the exotic and expensive-sounding name “Coca-Cola,” instead of a pedestrian name like “Glotz’s sugared, caffeinated water.” For similar Pavlovian reasons, it will be wise to have our beverage look pretty much like wine, instead of sugared water. And so we will artificially color our beverage if it comes out clear. And we will carbonate our water, making our product seem like champagne, or some other expensive beverage, while also making its flavor better and imitation harder to arrange for competing products. And, because we are going to attach so many expensive psychological effects to our flavor, that flavor should be different from any other standard flavor so that we maximize difficulties for competitors and give no accidental same-flavor benefit to any existing product.

What else, from the psychology textbook, can help our new business? Well, there is that powerful “monkey-see, monkey-do” aspect of human nature that psychologists often call “social proof.” Social proof, imitative consumption triggered by mere sight of consumption, will not only help induce trial of our beverage. It will also bolster perceived rewards from consumption. We will always take this powerful social-proof factor into account as we design advertising and sales promotion and as we forego present profit to enhance present and future consumption. More than with most other products, increased selling power will come from each increase in sales.

We can now see, Glotz, that by combining (1) much Pavlovian conditioning, (2) powerful social-proof effects, and (3) wonderful-tasting, energy-giving, stimulating and desirably-cold beverage that causes much operant conditioning, we are going to get sales that speed up for a long time by reason of the huge mixture of factors we have chosen. Therefore, we are going to start something like an autocatalytic reaction in chemistry, precisely the sort of multi-factor-triggered lollapalooza effect we need.

Being unable to get a patent or copyright on our super important flavor, we will work obsessively to keep our formula secret. We will make a big hoopla over our secrecy, which will enhance Pavlovian effects.

Original Source: Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger (Appendix D).

Secondary Source: Thanks to this site for having the transcript of the full speech.