Thursday, October 28, 1999
Coke testing machines that boost can prices as temperatures rise
By Constance L. Hays
New York Times
Taking full advantage of the law of supply and demand, the Coca-Cola Co. has quietly begun testing a vending machine that can automatically raise prices for its drinks in hot weather.
"This technology is something the Coca-Cola Company has been looking at for more than a year," said Rob Baskin, a company spokesman, adding that it has not yet been placed in any consumer market.
The potential was heralded, though, by the company's chairman and chief executive in an interview earlier this month with a Brazilian newsmagazine. M. Douglas Ivester, the chairman, described how desire for a cold drink can increase during a sports championship final held in the summer heat.
"So, it is fair that. it should be more expensive," Ivester was quoted as saying in the magazine Veja. "The machine will simply make this process automatic."
The process appears to be done simply through a temperature sensor and a computer chip, not any breakthrough technology, though Coca-Cola refused to provide any details Wednesday.
Although the concept might seem unfair to a thirsty person, it essentially extends to another industry what has become the practice for airlines and other companies that sell products and services to consumers. The falling price of computer chips, and the increasing ease of connecting to the Internet have made it practical for companies to pair daily and hourly fluctuations in demand with fluctuations.
Vending machines have become an increasingly important source of profits for Coca-Cola and its archrival, Pepsico. Over the past three years, the softdrink giants have watched their earnings erode as they waged a price war in supermarkets.
Industry reactions to the heatsensitive Coke machine ranged from enthusiastic to sanctimonious.
"It's another reason to move to Sweden," one beverage industry executive said with a sniff. "What's next? A machine that X-rays, people's pockets to find out how much change they have and raises the price accordingly?"
but im hoping the machine malfunctions in our hot arizona deserts where it can hit 122 gives out free cokes.