McDonald’s and Coke's Marriage Might Need a Refresher

**Heather Haddon** (0:00)
Hey, it's Ryan.

**SPEAKER_2** (0:02)
Our colleague Imani Moise is here to guest host today's episode. Here it is.

**Imani Moise** (0:11)
McDonald's and Coca-Cola are two of the world's most recognizable brands. And their success has been in part due to their more than 70 year collaboration.
It all began in an Illinois parking lot in 1955

**Heather Haddon** (0:28)
So Waddy Pratt was a salesman at Coca-Cola, and he was looking to develop new business for the company. And he met with a new franchise restaurant CEO named Ray Kroc.

**Imani Moise** (0:41)
Our colleague Heather Haddon covers restaurants.

**Heather Haddon** (0:44)
And he found Ray Kroc outside of a restaurant he had just opened in the Chicago suburbs, and they struck up a friendship and a business relationship that would span for decades and decades.

**Imani Moise** (0:58)
McDonald's was basically a startup back then.
This was the first location east of the Mississippi. But Kroc had plans to go bigger.

**Heather Haddon** (1:08)
One thing Ray Kroc was really known for is uniformity and consistency in his restaurant. So he wanted to pick suppliers that could scale as much as his ambitions for the company. So he was seeing this very small restaurant chain that he had just embarked on as one day operating restaurants all over the country. And so he wanted products that he could serve in these restaurants all over the country and they wanted to be uniform, whether that was ketchup or cola.

**Imani Moise** (1:40)
So in the parking lot that day, Wadi Prat had a pitch. Coke should be the signature drink at McDonald's.
Kroc liked the idea.

**Heather Haddon** (1:49)
And so he decided that Coca-Cola, the regular Coke, would be the beverage of choice in his McDonald's restaurant.

**Laura Cooper** (2:00)
Striking a storied handshake agreement to just marry these two brands, you know? So it's really very all-American, the story.

**Imani Moise** (2:10)
That's our colleague Laura Cooper. She covers the beverage industry.

**Laura Cooper** (2:14)
So while this, you know, started out as Coca-Cola, it's grown to involve, for instance, Sprite and all kinds of different drinks over the years.

**Imani Moise** (2:26)
The partnership has helped make both brands into American icons. But the relationship is having issues because McDonald's is no longer content planning all of its drinks around Coke.

**Heather Haddon** (2:40)
Tastes are changing. People are looking for things other than just soda at McDonald's.

**Imani Moise** (2:48)
Welcome to The Journal, our show about money, business, and power. I'm Imani Moise. It's Thursday, June 25th.
Coming up on the show, for 70 years, Coke and McDonald's have been joined at The Sip. But customers are thirsty for something new.

**SPEAKER_5** (3:19)
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**Imani Moise** (3:58)
Back in the 50s, when McDonald's and Coca-Cola first went into business together, brand partnerships weren't really a thing.

**Heather Haddon** (4:07)
Fast food was in its infancy then, so there really wasn't big national chains like we know today. You know, there was regional burger players, there was regional restaurants.

**Imani Moise** (4:17)
Ray Kroc wanted deals with national suppliers to keep things simple and cheap.

**Heather Haddon** (4:22)
And it also meant that the quality and what you could expect at a McDonald's has uniformed all over the country as it grew. And clearly McDonald's has grown and grown.

**Imani Moise** (4:32)
And since that fateful parking lot handshake, one of its longest standing suppliers has been Coca-Cola. The company has been part of McDonald's DNA as the chain has grown to become a global franchise.

**SPEAKER_6** (4:43)
Remember those old fashioned fountain glasses made famous by Coca-Cola? Well, right now you can take home one of those classic glasses for 29 cents when you buy a medium sized Coke at McDonald's.

**Heather Haddon** (4:53)
You know, for Coke, McDonald's really helped it expand all over the world because McDonald's had a lot of these existing relationships and existing franchisees in other countries.

**Imani Moise** (5:05)
McDonald's helped introduce Coke products to Russia as a restaurant expanded there. It became a huge market for Coca-Cola.

**SPEAKER_7** (5:11)
Well, it's been 14 years in the making and today finally McDonald's threw open the doors to its first restaurant in Moscow. And make no mistake, this was an event of major gastronomic proportions.