Coke vs. kvas

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Kvas I suppose after the attention it got with the Big Mac Index, the Economist couldn't help but continue to rely on mass-produced food items as economic indices. In this week's Economist, there's an article that purports that Coke can serve as an index of happiness. In this case, the analysis is restricted to Africa. The Economist argues that "[a]t a macro-level, when Coke fails, the country whose market it is trying to penetrate usually fails too." By this measure, it predicts a bright future for Africa:

...if Coca-Cola's predications are anything to go by, Africa's future is mostly bright. The company expects sales in Africa to grow by an annual 10-13% over the next few years.

If we were to extend this index to other parts of the world, we'd find one country experiencing a troubling trend - Russia.

An article in the Associated Press reports that Coke is being pushed out of the market by kvas. If you've never had the pleasure of drinking kvas, this wikipedia entry will give you an idea of what you're missing. It's a mildly alcoholic drink made from bread. While it was popular during Soviet times, it fell to the wayside in the 1990s. But it has been making a comeback in a big way - sales of bottled kvas have tripled in the last three years.

Can this trend really tell us anything about happiness or even prospects for economic growth? Obviously, the case isn't really comparable with many African states. But I think it says something. The transition from communism in Russia and in many other countries can in many ways be seen as a form of globalization, as most communist states were not integrated into the global economy. Perhaps the rise of kvas and the decline of Coke indicates in a small way the high water mark of that process of globalization that began two decades ago. What that says for economic growth, much less happiness, is hard to know.


Ryan Hahn

Operations Officer

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