New Coke
Encyclopedia
New Coke was the reformulation of Coca-Cola
introduced in 1985 by The Coca-Cola Company
to replace the original formula of its flagship soft drink
, Coca-Cola (also called Coke). New Coke originally had no separate name of its own, but was simply known as "the new taste of Coca-Cola" until 1992 when it was renamed Coca-Cola II.
The American public's reaction to the change was negative and the new cola
was a major marketing failure. The subsequent reintroduction of Coke's original formula
, re-branded as "Coca-Cola Classic", resulted in a significant gain in sales, leading to speculation that the introduction of the New Coke formula was just a marketing ploy.
, the market share for the Coca-Cola Company's flagship beverage was 60%. By 1983 it had declined to under 24% because of competition from Pepsi-Cola. Pepsi had begun to outsell Coke in supermarket
s; Coke maintained its edge only through soda vending machines and fast food restaurants. Market analysts believed baby boomer
s were more likely to purchase diet drinks as they aged and remained health- and weight-conscious. Therefore, any future growth in the full-calorie segment had to come from younger drinkers, who at that time favored Pepsi and its sweetness by even more overwhelming margins than the market as a whole. When Roberto Goizueta
took over as CEO
in 1980, he pointedly told employees there would be no sacred cows in how the company did its business, including how it formulated its drinks.
Coca-Cola's most senior executives commissioned a secret effort named "Project Kansas" — headed by marketing vice president Sergio Zyman
and Brian Dyson, president of Coca-Cola USA — to test and perfect the new flavor for Coke itself. It took its name from a famous photo of that state's renowned journalist
William Allen White
drinking a Coke that had been used extensively in its advertising and hung on several executives' walls. The company's marketing department again went out into the field, this time armed with samples of the possible new drink for taste tests, survey
s, and focus group
s.
The results of the taste tests were strong — the sweeter mixture overwhelmingly beat both regular Coke and Pepsi. Then tasters were asked if they would buy and drink it if it were Coca-Cola. Most said yes, they would, although it would take some getting used to. A small minority, about 10-12%, felt angry and alienated at the very thought, saying that they might stop drinking Coke altogether. Their presence in focus groups tended to skew results in a more negative direction as they exerted indirect peer pressure
on other participants.
The surveys, which were given more significance by standard marketing procedures of the era, were less negative and were key in convincing management to move forward with a change in the formula for 1985, to coincide with the drink's centenary
. But the focus groups had provided a clue as to how the change would play out in a public context, a data point that the company downplayed but which was to prove important later.
Management also considered, but quickly rejected, an idea to simply make and sell the new flavor as yet another Coke variety. The company's bottlers were already complaining about absorbing other recent additions into the product line in the wake of Diet Coke. Many of them had sued over the company's syrup
pricing policies. A new variety of Coke in competition with the main variety could, if successful, also dilute Coke’s existing sales and increase the proportion of Pepsi drinkers relative to Coke drinkers.
Early in his career with Coca-Cola, Goizueta had been in charge of the company's Bahamian subsidiary
. In that capacity, he had improved sales by tweaking the drink's flavor slightly, so he was receptive to the idea that changes to the taste of Coke could lead to increased profits. He believed it would be "New Coke or no Coke", and the change must take place openly. He insisted that the containers carry the "NEW!" label, which gave the drink its popular name.
Goizueta also made a visit to his mentor
and predecessor as the company's chief executive, the ailing Robert W. Woodruff
, who had built Coke into an international brand following World War II
. He claimed he had secured Woodruff's blessing for the reformulation, but even many of Goizueta's closest friends within the company doubt that Woodruff truly understood what Goizueta intended. Goizueta always said he had.
, who had expected a major move but not something so drastic.
Despite a negative reaction by top Pepsi executives to a smuggled preview six-pack of the new flavor, they nevertheless concluded it was a serious threat. Roger Enrico
, then director of North America
n operations, wasted no time taunting Pepsi's older rival. He declared a companywide holiday and took out a full-page ad in The New York Times
proclaiming that Pepsi had won the long-running "cola wars
". Since Coke officials were preoccupied over the weekend with preparations for the big day, their Pepsi counterparts had time to cultivate skepticism among reporters, sounding themes that would later come into play in the public discourse over the changed drink.
The press conference at New York City
's Lincoln Center to introduce the new formula did not go over very well. Reporters present had already been fed questions by Pepsi, which was extremely worried that New Coke would erase all its gains. Also, Goizueta's description of the new taste, given his background as one of the company's flavor
chemists, was less than impressive:
Goizueta defended the change by pointing out that the drink's secret formula was not sacrosanct and inviolable. (As far back as 1935, Coca-Cola sought kosher certification from an Atlanta rabbi
, and made two changes to the formula so that the drink could be certified kosher [and, incidentally, halal
and vegetarian
] and also kosher for Passover
.)
But Goizueta also refused to admit that taste tests had in any way led the company to make the change (which he called "one of the easiest decisions we have ever made") to avoid giving Pepsi any credit, yet gave no other real reason for the change, further alienating reporters who had already heard from Pepsi representatives in advance on this very issue. A reporter asked whether Diet Coke would also be reformulated "assuming this is a success," Goizueta curtly replied, "No. And I didn't assume that this is a success. This is a success."
The emphasis on the sweeter taste of the new flavor also ran contrary to previous Coke advertising, in which spokesman Bill Cosby
had touted its less-sweet taste as a reason to prefer Coke over Pepsi.
Nevertheless, the company's stock went up on the announcement, and market research showed 80% of the American public was aware of the change within days.
were symbolically the first Americans given cans to take home) and Washington, D.C. (where thousands of free cans were given away in Lafayette Park). Sales figures from those cities, and other regions where it had been introduced, showed a reaction that went as the market research had predicted. In fact, Coke's sales were up 8% over the same period the year before.
Most Coke drinkers resumed buying the new drink at much the same level as they had the old one. Surveys indicated, in fact, that a majority liked the new flavoring. Three-quarters of the respondents said they would buy New Coke again. The big test, however, remained in the Southeast
, where Coke was first bottled and tasted.
, as another surrender
to the "Yankee
s".
Company headquarters in Atlanta started receiving letters expressing anger or deep disappointment. Over 400,000 calls and letters were received by the company, including one letter, delivered to Goizueta, that was addressed to "Chief Dodo, The Coca-Cola Company". Another letter asked for his autograph, as the signature of "one of the dumbest executives in American business history" would likely become valuable in the future. The company hotline, 1-800-GET-COKE, received 1,500 calls a day compared to 400 before the change. A psychiatrist
Coke hired to listen in on calls told executives some people sounded as if they were discussing the death of a family member.
They were, nonetheless, joined by some voices from outside the region. Chicago Tribune
columnist
Bob Greene
wrote some widely reprinted pieces ridiculing the new flavor and damning Coke's executives for having changed it. Talk show
hosts and comedian
s mocked of the switch. Ads for New Coke were booed heavily when they appeared on the scoreboard
at the Houston Astrodome. Even Fidel Castro
, a longtime Coke drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence. Goizueta's own father expressed similar misgivings towards his son; the only time the younger man recalled him ever agreeing with Castro, the man whose revolution
had driven him and his son, nearly penniless, to America a quarter-century before.
Pepsi took advantage of the situation, running ads in which a first-time Pepsi drinker exclaimed "Now I know why Coke did it!" However, Pepsi actually gained very few converts over Coke's switch, despite claiming a 14% sales increase over the same month the previous year, the largest sales growth in the company's history. The most alienated customers simply refused to buy New Coke rather than switch to Pepsi, or purchased large amounts of remaining old Coke, including one Texan who spent $1,000 on his hoard of the old formula. Coca-Cola's director of corporate communications, Carlton Curtis, realized over time that they were more upset about the withdrawal of the old formula than the taste of the new one.
Gay Mullins, a Seattle retiree looking to start a public relations
firm with $120,000 of borrowed money, formed the organization Old Cola Drinkers of America on May 28 to lobby Coca-Cola to either reintroduce the old formula or sell it to someone else. His organization eventually received over 60,000 phone calls. He also filed a class action
lawsuit
against the company (which was quickly dismissed by a judge who said he preferred the taste of Pepsi), while nevertheless expressing interest in landing Coca-Cola Company as a client of his new firm should it reintroduce the old formula. In two informal blind taste tests, Mullins either failed to distinguish New Coke from old or expressed a preference for New Coke.
Still, despite ongoing resistance in the South, New Coke continued to do well in the rest of the country. But executives were uncertain of how international markets would react. Zyman heard doubts and skepticism from his relatives in Mexico
, where New Coke was slated to be introduced later that summer, when he went there on vacation.
Goizueta publicly voiced a complaint many company executives had been making in private as they shared letters the company had received thanking them for the change in formula, that bashing it had become "chic" and that, as had happened in the focus groups, peer pressure was keeping those who liked it from speaking up in its favor as vociferously as its critics were against it. Donald Keough
, the company's president and chief operating officer
, reported overhearing this exchange at his country club
outside Atlanta:
In addition to the noisier public protests, boycott
s and bottles being emptied into the streets of southern cities, the company had more serious reasons to be concerned. Its bottlers, and not just the ones still suing the company over syrup pricing policies, were expressing concern. While they had given Goizueta a standing ovation when he announced the change at an April 22 bottlers' meeting at Atlanta's Woodruff Arts Center
, glad the company had finally taken some initiative in the face of Pepsi's advances, they were less enthusiastic about the taste. Most of them saw great difficulty having to promote and sell a drink that had long been marketed as "The Real Thing", constant and unchanging, now that it had been changed.
The 20 bottlers still suing Coca-Cola had even more sport with the change in their legal arguments. Coca-Cola had argued in its defense when the suit was originally filed that the formula's uniqueness and difference from Diet Coke justified different pricing policies from the latter - but if the new formula was simply an HFCS-sweetened Diet Coke, Coca-Cola could not argue the formula was unique. Bottlers, particularly in the South, were also tired of facing personal opprobrium over the change. Many reported that some acquaintances had stopped speaking to them, or had expressed displeasure in other emotionally hurtful ways. On June 23, several of the bottlers took these complaints to Coca-Cola executives in a private meeting. With the company now fearing boycotts not only from its consumers but its bottlers, talks about reintroducing the old formula moved from "if" to "when".
Finally the board of Coca-Cola changed their mind and decided to bring back the old Coke. The president Donald Keough
revealed years later in the documentary "The people vs Coke" from 2002 that they realized that this was the only right thing to do when they visited a small restaurant in Monaco and the owner of the restaurant proudly said that they had "the real thing, it's a real coke" offering them a bottle of old coke.
' Peter Jennings
interrupted General Hospital
to share the news with viewers. On the floor of the U.S. Senate, David Pryor
called the reintroduction "a meaningful moment in U.S. history
". The company hotline received 31,600 calls in the two days after the announcement.
The new product continued to be sold and retained the name Coca-Cola (until 1992, when it was officially renamed Coca-Cola II), so the old product was named Coca-Cola Classic, also called Coke Classic, later just Coke and for a short period of time it was referred to by the public as Old Coke. Many who tasted the reintroduced formula were not convinced that the first batches really were the same formula that had supposedly been retired that spring. This is partially true because Coca-Cola Classic differed from the original formula, as all bottlers who hadn't already done so were using high fructose corn syrup
instead of cane sugar to sweeten the drink.
"There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years," said Keough at a press conference. "The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people."
The company gave Gay Mullins the first case of Coke Classic.
New Coke's sales dwindled to a three percent share of the market, although it was doing quite well in Los Angeles
and some other key markets. Later research, however, suggested that it was not the reintroduction of Classic Coke, but instead the less-heralded rollout of Cherry Coke
, that can be credited with the company's success that year.
Coke spent a considerable amount of time trying to figure out where it had made a mistake, ultimately concluding that it had underestimated the public impact of the portion of the customer base that would be alienated by the switch. This would not emerge for several years afterward, however, and in the meantime the public simply concluded that the company had, as Keough suggested, failed to consider the public's attachment to the idea of what Coke's old formula represented. While that has become conventional wisdom in the ensuing years, some analyses have suggested otherwise.
This populist version of the story served Coke's interests, however, as the whole episode did more to position and define Coca-Cola as a brand embodying values distinct from Pepsi than any deliberate effort to do so probably could have done. Allowing itself to be portrayed as a somewhat clueless large corporation forced to back off a big change by overwhelming public pressure flattered customers (as Keough put it, "We love any retreat which has us rushing toward our best customers with the product they love the most."). Bottles and cans continued to bear the "Coca-Cola Classic" title until 2009 when the company announced that it would discontinue the use of "Classic" to avoid confusion with the younger generation.
While in the short term the fiasco led Cosby to end his advertising for Coke, saying his commercials that praised the superiority of the new formula had hurt his credibility, no one at Coca-Cola was fired or otherwise held responsible for what is still widely perceived as a misstep, for the simple reason that it ultimately wasn't. When Goizueta died in 1997, the company's share
price was at a level well above what it was when he had taken over 16 years earlier and its position as market leader even more firmly established. At the time Roger Enrico
, then head of Pepsi's American operations, likened New Coke to the Edsel
. Later, when he was himself PepsiCo's CEO, he modified his assessment of the situation, saying that had people been fired or demoted over New Coke, it would have sent a message that risk-taking was strongly discouraged at the company.
In the late 1990s, Zyman summed up the New Coke experience thus:
New Coke continued to do what it had originally been designed to do: win taste tests. In 1987, The Wall Street Journal
surveyed 100 randomly selected cola drinkers, the majority of whom indicated a preference for Pepsi, with Classic Coke accounting for the remainder save two New Coke loyalists. When this group was given a chance to try all three in a blind test, New Coke slightly edged out Pepsi - yet many drinkers reacted angrily to finding they had chosen a brand other than their favorite.
Goizueta never once regretted the decision, even throwing an anniversary party for New Coke in 1995, and continued to drink it until his own death.
But confusion reigned at the company's marketing department, which had to come up with a plan to market two Cokes where such plans had been completely off the table mere months before. Classic Coke did not need much help, with a "Red, White and You" campaign showcasing the American virtues many of those who had clamored for its reintroduction had pointedly reminded the company it embodied. But the company was at a loss to sell what was now just Coke. "The Best Just Got Better" could no longer be used. Marketers fumbled for a strategy for the rest of the year. Matters were not helped when McDonald's
announced shortly after the reintroduction that it was switching over to Classic Coke at every store across the country.
At the beginning of 1986, however, Coke's marketing team found a strategy by returning to their original motives for changing the drink: the youth market so beholden to Pepsi. Max Headroom
, the purportedly computer-generated media personality played by Matt Frewer
, was chosen to replace Cosby as the spokesman (of sorts) for Coke's new "Catch the Wave" campaign. A very stylish figure in his jacket and sunglasses
, he was already known to much of the U.S. youth audience through appearances on MTV
, where he had first appeared in the Art of Noise's "Paranoimia
" video
, and Cinemax
. The campaign was launched with a memorable television commercial, produced by McCann-Erickson New York, with Max saying in his trademark stutter, "C-c-c-catch the wave!" and referring to his fellow "Cokeologists". In a riposte to Pepsi's televisual teasings, one showed Headroom asking a Pepsi can he was "interviewing" how it felt about more drinkers preferring the new Coke to it and then cut to the condensation forming on the can. "S-s-s-s-sweating?" he asked.
It was a huge success, and surveys likewise showed that more than three-quarters of the target market were aware of the ads within two days. Coke's corporate hotline received more calls about Max than any previous spokesperson, some even asking if he had a girlfriend. The ads and campaign continued throughout the year and were chosen as best of 1986 by Video Storyboard of New York.
In 1985, New Coke was sold only in Canada
, the United States
, and United States territories
, while the original formula continued to be sold in the rest of the world (had the new version been a success it would presumably have been introduced worldwide). New Coke was eventually returned to the company's product portfolio; it was test-marketed in certain U.S. cities under the name Coke II in 1990 and officially renamed Coke II in 1992, despite the company's original intention not to create a second brand. Filmmaker Miranda July
is said to have suggested the name of Coke II while working as a tastemaker for an ad agency.
However, Coca-Cola did little to promote or otherwise distinguish it. In a market already offering far more choice of drinks calling themselves "Coke" in some fashion or another, the public saw little reason to embrace a product they had firmly rejected seven years earlier, and within about a year, Coke II was largely off the American shelves again. By 1998, it could only be found in some scattered Midwestern
markets, and in 2002, Coke II was discontinued entirely. On August 16 of that year, Coke announced a change of the label in which the word "Classic" was no longer so prominent, leading to speculation that it would eventually be removed and the last legacy of New Coke eliminated from the company's packaging. In 2009, Coca-Cola permanently removed "Classic" from its North American packaging.
It has found acceptance in some foreign markets. , it was still selling in Yap
(one of the four Federated States of Micronesia
), along with Coca-Cola C2
. It is also still very popular in the U.S. Territory
American Samoa
, where it is still sold in most Coke
vending machines.
"For a product so widely despised," noted AdWeek
blogger Tim Nudd in 2006, more than two decades later, "New Coke (a.k.a. Coke II) still gets an admirable amount of ink." He noted Blink
and Why Most Things Fail that dealt with it at some length, as well as two recent mentions in Forbes and Sports Illustrated
.
Within Coca-Cola, the role the company's bottlers had played in forcing its hand led executives to create a new subsidiary, Coca-Cola Enterprises
, which bought out several of the larger bottlers and placed distribution and marketing efforts more tightly under its control.
s and conspiracy theories
that have circulated in the years since to explain how a company with the resources and experience of Coca-Cola could have made such an apparently colossal blunder.
Some explanations that have been proffered are:
, author Malcolm Gladwell
relates his conversations with market researchers in the food industry who put most of the blame for the failure of New Coke on the flawed nature of taste test
s. They claim most are subject to systematic biases.
Tests such as the Pepsi Challenge
were what are called in the industry "sip tests", meaning that drinkers were given small samples (less than a can or bottle's worth) to try out. Gladwell contends that what people say they like in these tests may not reflect what they will actually buy to sit at home and drink over a week or so. Carol Dollard, who once worked in new product development for Pepsi, told Gladwell, "I've seen many times where the sip test will give you one result and the home-use test will give you the exact opposite." For example, although many consumers react positively to the sweeter taste of Pepsi when drinking it in small volumes, it may become unattractively sweet when drunk in quantity. Coke, on the other hand, may be more attractive for drinking in volume, precisely because it is less sweet. A more comprehensive testing regimen could possibly have revealed this, Gladwell's sources believe.
Gladwell reports that other market researchers have criticized Coke for not realizing that much of its success as a brand came from what they call sensation transference, a phenomenon first described by marketer Louis Cheskin in the late 1940s: tasters unconsciously add their reactions to the drink's packaging into their assessment of the taste. For example, one of the researchers told Gladwell that his firm's research had found 7-Up drinkers offered a sample from a bottle with a distinctly more yellowish label believe the flavor to be more lemon
y, although it wasn't.
In Coke's case, it is alleged that buyers, subject to sensation transference, were "tasting" the red color of the container and distinctive Coca-Cola script as much as the drink itself. It was thus, in their opinion, a mistake to focus solely on the product and its taste. "The mistake Coke made," said Darrel Rhea, an executive with the firm Cheskin founded, "was in attributing their loss in share entirely to the product". He points to Pepsi's work in establishing a youth-oriented brand identity from the 1960s onward as having more bearing on its success.
Coke considered but rejected gradually changing the drink's flavor incrementally, without announcing that they were doing so. Executives feared that the public would notice and exaggerate slight differences in taste. In 1998, Joel Dubow, a professor of food marketing at St. Joseph's University
, tested this "flavor balance hypothesis" and argued that it was not true. He and fellow researcher Nancy Childs tested mixtures of classic Coke and Coca-Cola II and found that the gradual changes of taste were not noticed by a significant number of tasters. Coke, he said, would have succeeded had it chosen this strategy.
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
introduced in 1985 by The Coca-Cola Company
The Coca-Cola Company
The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia...
to replace the original formula of its flagship soft drink
Soft drink
A soft drink is a non-alcoholic beverage that typically contains water , a sweetener, and a flavoring agent...
, Coca-Cola (also called Coke). New Coke originally had no separate name of its own, but was simply known as "the new taste of Coca-Cola" until 1992 when it was renamed Coca-Cola II.
The American public's reaction to the change was negative and the new cola
Cola
Cola is a carbonated beverage that was typically flavored by the kola nut as well as vanilla and other flavorings, however, some colas are now flavored artificially. It became popular worldwide after druggist John Pemberton invented Coca-Cola in 1886...
was a major marketing failure. The subsequent reintroduction of Coke's original formula
Coca-Cola formula
The Coca-Cola formula is The Coca-Cola Company's secret recipe for Coca-Cola. As a publicity, marketing, and intellectual property protection strategy started by Robert W...
, re-branded as "Coca-Cola Classic", resulted in a significant gain in sales, leading to speculation that the introduction of the New Coke formula was just a marketing ploy.
Background
Just after World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the market share for the Coca-Cola Company's flagship beverage was 60%. By 1983 it had declined to under 24% because of competition from Pepsi-Cola. Pepsi had begun to outsell Coke in supermarket
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
s; Coke maintained its edge only through soda vending machines and fast food restaurants. Market analysts believed baby boomer
Baby boomer
A baby boomer is a person who was born during the demographic Post-World War II baby boom and who grew up during the period between 1946 and 1964. The term "baby boomer" is sometimes used in a cultural context. Therefore, it is impossible to achieve broad consensus of a precise definition, even...
s were more likely to purchase diet drinks as they aged and remained health- and weight-conscious. Therefore, any future growth in the full-calorie segment had to come from younger drinkers, who at that time favored Pepsi and its sweetness by even more overwhelming margins than the market as a whole. When Roberto Goizueta
Roberto Goizueta
Roberto Críspulo Goizueta was Chairman, Director, and Chief Executive Officer of The Coca-Cola Company from August 1980 until his death in October 1997....
took over as CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
in 1980, he pointedly told employees there would be no sacred cows in how the company did its business, including how it formulated its drinks.
Market research
Sergio Zyman
Sergio Zyman is a Mexican marketing executive best known as the marketer behind the failed launch of New Coke now regarded as one of the greatest marketing blunders of all time. In a May 1, 1995 cover story Fortune Magazine referred to New Coke as the biggest marketing blunder since the launch of...
and Brian Dyson, president of Coca-Cola USA — to test and perfect the new flavor for Coke itself. It took its name from a famous photo of that state's renowned journalist
Journalist
A journalist collects and distributes news and other information. A journalist's work is referred to as journalism.A reporter is a type of journalist who researchs, writes, and reports on information to be presented in mass media, including print media , electronic media , and digital media A...
William Allen White
William Allen White
William Allen White was a renowned American newspaper editor, politician, author, and leader of the Progressive movement...
drinking a Coke that had been used extensively in its advertising and hung on several executives' walls. The company's marketing department again went out into the field, this time armed with samples of the possible new drink for taste tests, survey
Statistical survey
Survey methodology is the field that studies surveys, that is, the sample of individuals from a population with a view towards making statistical inferences about the population using the sample. Polls about public opinion, such as political beliefs, are reported in the news media in democracies....
s, and focus group
Focus group
A focus group is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement, idea, or packaging...
s.
The results of the taste tests were strong — the sweeter mixture overwhelmingly beat both regular Coke and Pepsi. Then tasters were asked if they would buy and drink it if it were Coca-Cola. Most said yes, they would, although it would take some getting used to. A small minority, about 10-12%, felt angry and alienated at the very thought, saying that they might stop drinking Coke altogether. Their presence in focus groups tended to skew results in a more negative direction as they exerted indirect peer pressure
Peer pressure
Peer pressure refers to the influence exerted by a peer group in encouraging a person to change his or her attitudes, values, or behavior in order to conform to group norms. Social groups affected include membership groups, when the individual is "formally" a member , or a social clique...
on other participants.
The surveys, which were given more significance by standard marketing procedures of the era, were less negative and were key in convincing management to move forward with a change in the formula for 1985, to coincide with the drink's centenary
Century
A century is one hundred consecutive years. Centuries are numbered ordinally in English and many other languages .-Start and end in the Gregorian Calendar:...
. But the focus groups had provided a clue as to how the change would play out in a public context, a data point that the company downplayed but which was to prove important later.
Management also considered, but quickly rejected, an idea to simply make and sell the new flavor as yet another Coke variety. The company's bottlers were already complaining about absorbing other recent additions into the product line in the wake of Diet Coke. Many of them had sued over the company's syrup
Syrup
In cooking, a syrup is a thick, viscous liquid consisting primarily of a solution of sugar in water, containing a large amount of dissolved sugars but showing little tendency to deposit crystals...
pricing policies. A new variety of Coke in competition with the main variety could, if successful, also dilute Coke’s existing sales and increase the proportion of Pepsi drinkers relative to Coke drinkers.
Early in his career with Coca-Cola, Goizueta had been in charge of the company's Bahamian subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
. In that capacity, he had improved sales by tweaking the drink's flavor slightly, so he was receptive to the idea that changes to the taste of Coke could lead to increased profits. He believed it would be "New Coke or no Coke", and the change must take place openly. He insisted that the containers carry the "NEW!" label, which gave the drink its popular name.
Goizueta also made a visit to his mentor
Mentor
In Greek mythology, Mentor was the son of Alcimus or Anchialus. In his old age Mentor was a friend of Odysseus who placed Mentor and Odysseus' foster-brother Eumaeus in charge of his son Telemachus, and of Odysseus' palace, when Odysseus left for the Trojan War.When Athena visited Telemachus she...
and predecessor as the company's chief executive, the ailing Robert W. Woodruff
Robert W. Woodruff
Robert Winship Woodruff was the president of The Coca-Cola Company from 1923 until 1954. With his enormous Coke fortune, he was also a major philanthropist, and many educational and cultural landmarks in the U.S...
, who had built Coke into an international brand following World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. He claimed he had secured Woodruff's blessing for the reformulation, but even many of Goizueta's closest friends within the company doubt that Woodruff truly understood what Goizueta intended. Goizueta always said he had.
Marketing response by Pepsi
Coke let the media know on April 19, 1985 that a major announcement was planned for the following Tuesday, April 23, concerning a change in the product. While its press release did not explicitly say so, many recipients correctly guessed it meant a change in the flagship brand's formulation. So, too, did officials at PepsiCoPepsiCo
PepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company...
, who had expected a major move but not something so drastic.
Despite a negative reaction by top Pepsi executives to a smuggled preview six-pack of the new flavor, they nevertheless concluded it was a serious threat. Roger Enrico
Roger Enrico
Roger Enrico is an American businessman.Enrico was educated at Babson College.He is the former Chairman/CEO of PepsiCo form 1996 to 2001, and current Chairman of DreamWorks Animation SKG Inc....
, then director of North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
n operations, wasted no time taunting Pepsi's older rival. He declared a companywide holiday and took out a full-page ad in The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
proclaiming that Pepsi had won the long-running "cola wars
Cola wars
The Cola Wars are a campaign of mutually-targeted television advertisements and marketing campaigns since the 1980s between soft drink manufacturers Coca-Cola Company and PepsiCo Incorporated.- Competition :...
". Since Coke officials were preoccupied over the weekend with preparations for the big day, their Pepsi counterparts had time to cultivate skepticism among reporters, sounding themes that would later come into play in the public discourse over the changed drink.
Official launch
New Coke was introduced on April 23, 1985. Production of the original formulation ended that same week.The press conference at New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
's Lincoln Center to introduce the new formula did not go over very well. Reporters present had already been fed questions by Pepsi, which was extremely worried that New Coke would erase all its gains. Also, Goizueta's description of the new taste, given his background as one of the company's flavor
Flavor
Flavor or flavour is the sensory impression of a food or other substance, and is determined mainly by the chemical senses of taste and smell. The "trigeminal senses", which detect chemical irritants in the mouth and throat as well as temperature and texture, are also very important to the overall...
chemists, was less than impressive:
Goizueta defended the change by pointing out that the drink's secret formula was not sacrosanct and inviolable. (As far back as 1935, Coca-Cola sought kosher certification from an Atlanta rabbi
Rabbi
In Judaism, a rabbi is a teacher of Torah. This title derives from the Hebrew word רבי , meaning "My Master" , which is the way a student would address a master of Torah...
, and made two changes to the formula so that the drink could be certified kosher [and, incidentally, halal
Halal
Halal is a term designating any object or an action which is permissible to use or engage in, according to Islamic law. The term is used to designate food seen as permissible according to Islamic law...
and vegetarian
Vegetarianism
Vegetarianism encompasses the practice of following plant-based diets , with or without the inclusion of dairy products or eggs, and with the exclusion of meat...
] and also kosher for Passover
Passover
Passover is a Jewish holiday and festival. It commemorates the story of the Exodus, in which the ancient Israelites were freed from slavery in Egypt...
.)
But Goizueta also refused to admit that taste tests had in any way led the company to make the change (which he called "one of the easiest decisions we have ever made") to avoid giving Pepsi any credit, yet gave no other real reason for the change, further alienating reporters who had already heard from Pepsi representatives in advance on this very issue. A reporter asked whether Diet Coke would also be reformulated "assuming this is a success," Goizueta curtly replied, "No. And I didn't assume that this is a success. This is a success."
The emphasis on the sweeter taste of the new flavor also ran contrary to previous Coke advertising, in which spokesman Bill Cosby
Bill Cosby
William Henry "Bill" Cosby, Jr. is an American comedian, actor, author, television producer, educator, musician and activist. A veteran stand-up performer, he got his start at various clubs, then landed a starring role in the 1960s action show, I Spy. He later starred in his own series, the...
had touted its less-sweet taste as a reason to prefer Coke over Pepsi.
Nevertheless, the company's stock went up on the announcement, and market research showed 80% of the American public was aware of the change within days.
Early acceptance
The company, as it had planned, introduced the new formula with big marketing pushes in New York (workers renovating the Statue of LibertyStatue of Liberty
The Statue of Liberty is a colossal neoclassical sculpture on Liberty Island in New York Harbor, designed by Frédéric Bartholdi and dedicated on October 28, 1886...
were symbolically the first Americans given cans to take home) and Washington, D.C. (where thousands of free cans were given away in Lafayette Park). Sales figures from those cities, and other regions where it had been introduced, showed a reaction that went as the market research had predicted. In fact, Coke's sales were up 8% over the same period the year before.
Most Coke drinkers resumed buying the new drink at much the same level as they had the old one. Surveys indicated, in fact, that a majority liked the new flavoring. Three-quarters of the respondents said they would buy New Coke again. The big test, however, remained in the Southeast
Southern United States
The Southern United States—commonly referred to as the American South, Dixie, or simply the South—constitutes a large distinctive area in the southeastern and south-central United States...
, where Coke was first bottled and tasted.
Backlash
Despite New Coke's acceptance with a large number of Coca-Cola drinkers, a vocal minority of them resented the change in formula and were not shy about making that known — again just as had happened in the focus groups. Many of these drinkers were Southerners, some of whom considered the drink a fundamental part of regional identity. They viewed the company's decision to change the formula through the prism of the Civil WarAmerican Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
, as another surrender
Battle of Appomattox Courthouse
The Battle of Appomattox Court House, fought on the morning of April 9, 1865, was the final engagement of Confederate States Army General Robert E. Lee's Army of Northern Virginia before it surrendered to the Union Army under Lt. Gen. Ulysses S. Grant, and one of the last battles of the American...
to the "Yankee
Union (American Civil War)
During the American Civil War, the Union was a name used to refer to the federal government of the United States, which was supported by the twenty free states and five border slave states. It was opposed by 11 southern slave states that had declared a secession to join together to form the...
s".
Company headquarters in Atlanta started receiving letters expressing anger or deep disappointment. Over 400,000 calls and letters were received by the company, including one letter, delivered to Goizueta, that was addressed to "Chief Dodo, The Coca-Cola Company". Another letter asked for his autograph, as the signature of "one of the dumbest executives in American business history" would likely become valuable in the future. The company hotline, 1-800-GET-COKE, received 1,500 calls a day compared to 400 before the change. A psychiatrist
Psychiatry
Psychiatry is the medical specialty devoted to the study and treatment of mental disorders. These mental disorders include various affective, behavioural, cognitive and perceptual abnormalities...
Coke hired to listen in on calls told executives some people sounded as if they were discussing the death of a family member.
They were, nonetheless, joined by some voices from outside the region. Chicago Tribune
Chicago Tribune
The Chicago Tribune is a major daily newspaper based in Chicago, Illinois, and the flagship publication of the Tribune Company. Formerly self-styled as the "World's Greatest Newspaper" , it remains the most read daily newspaper of the Chicago metropolitan area and the Great Lakes region and is...
columnist
Columnist
A columnist is a journalist who writes for publication in a series, creating an article that usually offers commentary and opinions. Columns appear in newspapers, magazines and other publications, including blogs....
Bob Greene
Bob Greene
Robert Bernard Greene, Jr. is an American journalist. He worked for 24 years for the Chicago Tribune newspaper, where he was an award-winning columnist. Greene has written books on subjects varying from Michael Jordan, to small towns, to U.S. presidents. His Hang Time: Days and Dreams with Michael...
wrote some widely reprinted pieces ridiculing the new flavor and damning Coke's executives for having changed it. Talk show
Talk show
A talk show or chat show is a television program or radio program where one person discuss various topics put forth by a talk show host....
hosts and comedian
Comedian
A comedian or comic is a person who seeks to entertain an audience, primarily by making them laugh. This might be through jokes or amusing situations, or acting a fool, as in slapstick, or employing prop comedy...
s mocked of the switch. Ads for New Coke were booed heavily when they appeared on the scoreboard
Scoreboard
A scoreboard is a large board for publicly displaying the score in a game or match. Most levels of sport from high school and above use at least one scoreboard for keeping score, measuring time, and displaying statistics. Scoreboards in the past used a mechanical clock and numeral cards to...
at the Houston Astrodome. Even Fidel Castro
Fidel Castro
Fidel Alejandro Castro Ruz is a Cuban revolutionary and politician, having held the position of Prime Minister of Cuba from 1959 to 1976, and then President from 1976 to 2008. He also served as the First Secretary of the Communist Party of Cuba from the party's foundation in 1961 until 2011...
, a longtime Coke drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence. Goizueta's own father expressed similar misgivings towards his son; the only time the younger man recalled him ever agreeing with Castro, the man whose revolution
Cuban Revolution
The Cuban Revolution was an armed revolt by Fidel Castro's 26th of July Movement against the regime of Cuban dictator Fulgencio Batista between 1953 and 1959. Batista was finally ousted on 1 January 1959, and was replaced by a revolutionary government led by Castro...
had driven him and his son, nearly penniless, to America a quarter-century before.
Pepsi took advantage of the situation, running ads in which a first-time Pepsi drinker exclaimed "Now I know why Coke did it!" However, Pepsi actually gained very few converts over Coke's switch, despite claiming a 14% sales increase over the same month the previous year, the largest sales growth in the company's history. The most alienated customers simply refused to buy New Coke rather than switch to Pepsi, or purchased large amounts of remaining old Coke, including one Texan who spent $1,000 on his hoard of the old formula. Coca-Cola's director of corporate communications, Carlton Curtis, realized over time that they were more upset about the withdrawal of the old formula than the taste of the new one.
Gay Mullins, a Seattle retiree looking to start a public relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
firm with $120,000 of borrowed money, formed the organization Old Cola Drinkers of America on May 28 to lobby Coca-Cola to either reintroduce the old formula or sell it to someone else. His organization eventually received over 60,000 phone calls. He also filed a class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
against the company (which was quickly dismissed by a judge who said he preferred the taste of Pepsi), while nevertheless expressing interest in landing Coca-Cola Company as a client of his new firm should it reintroduce the old formula. In two informal blind taste tests, Mullins either failed to distinguish New Coke from old or expressed a preference for New Coke.
Still, despite ongoing resistance in the South, New Coke continued to do well in the rest of the country. But executives were uncertain of how international markets would react. Zyman heard doubts and skepticism from his relatives in Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, where New Coke was slated to be introduced later that summer, when he went there on vacation.
Goizueta publicly voiced a complaint many company executives had been making in private as they shared letters the company had received thanking them for the change in formula, that bashing it had become "chic" and that, as had happened in the focus groups, peer pressure was keeping those who liked it from speaking up in its favor as vociferously as its critics were against it. Donald Keough
Donald Keough
Donald R. Keough is Chairman of the Board of Allen & Company Incorporated, a New York investment-banking firm. He was elected to that position in April 1993....
, the company's president and chief operating officer
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
, reported overhearing this exchange at his country club
Country club
A country club is a private club, often with a closed membership, that typically offers a variety of recreational sports facilities and is located in city outskirts or rural areas. Activities may include, for example, any of golf, tennis, swimming or polo...
outside Atlanta:
"Have you tried it?"
"Yes."
"Did you like it?"
"Yes, but I'll be damned if I'll let Coca-Cola know that."
Company dissatisfaction
Some Coca-Cola executives had quietly been arguing for a reintroduction of the old formula as early as May. By June, when soft drink sales usually start to rise, the numbers showed the new formula was leveling among consumers. Executives feared social peer pressure was now affecting their bottom line. Some consumers began trying to obtain "old" Coke from overseas, where the new formula had not yet been introduced, as domestic stocks of the old drink were finally exhausted. Over the course of the month, Coca-Cola's chemists also quietly reduced the acidity level of the new drink, hoping to assuage complaints about the flavor and allow its sweetness to be better perceived (ads pointing to this change were prepared, but never used).In addition to the noisier public protests, boycott
Boycott
A boycott is an act of voluntarily abstaining from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for political reasons...
s and bottles being emptied into the streets of southern cities, the company had more serious reasons to be concerned. Its bottlers, and not just the ones still suing the company over syrup pricing policies, were expressing concern. While they had given Goizueta a standing ovation when he announced the change at an April 22 bottlers' meeting at Atlanta's Woodruff Arts Center
Woodruff Arts Center
Woodruff Arts Center is a major visual and performing arts center located in Atlanta. The center houses four arts divisions in one campus and not-for-profit organization...
, glad the company had finally taken some initiative in the face of Pepsi's advances, they were less enthusiastic about the taste. Most of them saw great difficulty having to promote and sell a drink that had long been marketed as "The Real Thing", constant and unchanging, now that it had been changed.
The 20 bottlers still suing Coca-Cola had even more sport with the change in their legal arguments. Coca-Cola had argued in its defense when the suit was originally filed that the formula's uniqueness and difference from Diet Coke justified different pricing policies from the latter - but if the new formula was simply an HFCS-sweetened Diet Coke, Coca-Cola could not argue the formula was unique. Bottlers, particularly in the South, were also tired of facing personal opprobrium over the change. Many reported that some acquaintances had stopped speaking to them, or had expressed displeasure in other emotionally hurtful ways. On June 23, several of the bottlers took these complaints to Coca-Cola executives in a private meeting. With the company now fearing boycotts not only from its consumers but its bottlers, talks about reintroducing the old formula moved from "if" to "when".
Finally the board of Coca-Cola changed their mind and decided to bring back the old Coke. The president Donald Keough
Donald Keough
Donald R. Keough is Chairman of the Board of Allen & Company Incorporated, a New York investment-banking firm. He was elected to that position in April 1993....
revealed years later in the documentary "The people vs Coke" from 2002 that they realized that this was the only right thing to do when they visited a small restaurant in Monaco and the owner of the restaurant proudly said that they had "the real thing, it's a real coke" offering them a bottle of old coke.
Reversal
Coca-Cola executives announced the return of the original formula on July 10, less than three months after New Coke's introduction. ABC NewsABC News
ABC News is the news gathering and broadcasting division of American broadcast television network ABC, a subsidiary of The Walt Disney Company...
' Peter Jennings
Peter Jennings
Peter Charles Archibald Ewart Jennings, CM was a Canadian American journalist and news anchor. He was the sole anchor of ABC's World News Tonight from 1983 until his death in 2005 of complications from lung cancer...
interrupted General Hospital
General Hospital
General Hospital is an American daytime television drama that is credited by the Guinness Book of World Records as the longest-running American soap opera currently in production and the third longest running drama in television in American history after Guiding Light and As the World Turns....
to share the news with viewers. On the floor of the U.S. Senate, David Pryor
David Pryor
David Hampton Pryor is a former Democratic member of the United States House of Representatives and United States Senator from the State of Arkansas. Pryor also served as 39th Governor of Arkansas from 1975 to 1979 and was a member of the Arkansas House of Representatives from 1960 to 1966...
called the reintroduction "a meaningful moment in U.S. history
History of the United States
The history of the United States traditionally starts with the Declaration of Independence in the year 1776, although its territory was inhabited by Native Americans since prehistoric times and then by European colonists who followed the voyages of Christopher Columbus starting in 1492. The...
". The company hotline received 31,600 calls in the two days after the announcement.
The new product continued to be sold and retained the name Coca-Cola (until 1992, when it was officially renamed Coca-Cola II), so the old product was named Coca-Cola Classic, also called Coke Classic, later just Coke and for a short period of time it was referred to by the public as Old Coke. Many who tasted the reintroduced formula were not convinced that the first batches really were the same formula that had supposedly been retired that spring. This is partially true because Coca-Cola Classic differed from the original formula, as all bottlers who hadn't already done so were using high fructose corn syrup
High fructose corn syrup
High-fructose corn syrup — also called glucose-fructose syrup in the UK, glucose/fructose in Canada, and high-fructose maize syrup in other countries — comprises any of a group of corn syrups that has undergone enzymatic processing to convert some of its glucose into fructose to produce...
instead of cane sugar to sweeten the drink.
"There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years," said Keough at a press conference. "The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people."
The company gave Gay Mullins the first case of Coke Classic.
Aftermath
By the end of the year, Coke Classic was substantially outselling both New Coke and Pepsi. Six months after the rollout, Coke's sales had increased at more than twice the rate of Pepsi's.New Coke's sales dwindled to a three percent share of the market, although it was doing quite well in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
and some other key markets. Later research, however, suggested that it was not the reintroduction of Classic Coke, but instead the less-heralded rollout of Cherry Coke
Coca-Cola Cherry
Coca-Cola Cherry, originally introduced as Cherry Coke, is a cherry-flavored version of Coca-Cola. It is produced and distributed by The Coca-Cola Company and its bottlers in the United States and some international markets.-History:Long before its official introduction in 1985, many diners and...
, that can be credited with the company's success that year.
Coke spent a considerable amount of time trying to figure out where it had made a mistake, ultimately concluding that it had underestimated the public impact of the portion of the customer base that would be alienated by the switch. This would not emerge for several years afterward, however, and in the meantime the public simply concluded that the company had, as Keough suggested, failed to consider the public's attachment to the idea of what Coke's old formula represented. While that has become conventional wisdom in the ensuing years, some analyses have suggested otherwise.
This populist version of the story served Coke's interests, however, as the whole episode did more to position and define Coca-Cola as a brand embodying values distinct from Pepsi than any deliberate effort to do so probably could have done. Allowing itself to be portrayed as a somewhat clueless large corporation forced to back off a big change by overwhelming public pressure flattered customers (as Keough put it, "We love any retreat which has us rushing toward our best customers with the product they love the most."). Bottles and cans continued to bear the "Coca-Cola Classic" title until 2009 when the company announced that it would discontinue the use of "Classic" to avoid confusion with the younger generation.
While in the short term the fiasco led Cosby to end his advertising for Coke, saying his commercials that praised the superiority of the new formula had hurt his credibility, no one at Coca-Cola was fired or otherwise held responsible for what is still widely perceived as a misstep, for the simple reason that it ultimately wasn't. When Goizueta died in 1997, the company's share
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
price was at a level well above what it was when he had taken over 16 years earlier and its position as market leader even more firmly established. At the time Roger Enrico
Roger Enrico
Roger Enrico is an American businessman.Enrico was educated at Babson College.He is the former Chairman/CEO of PepsiCo form 1996 to 2001, and current Chairman of DreamWorks Animation SKG Inc....
, then head of Pepsi's American operations, likened New Coke to the Edsel
Edsel
The Edsel was an automobile manufactured by the Ford Motor Company during the 1958, 1959, and 1960 model years. The Edsel never gained popularity with contemporary American car buyers and sold poorly. Consequently, the Ford Motor Company lost millions of dollars on the Edsel's development,...
. Later, when he was himself PepsiCo's CEO, he modified his assessment of the situation, saying that had people been fired or demoted over New Coke, it would have sent a message that risk-taking was strongly discouraged at the company.
In the late 1990s, Zyman summed up the New Coke experience thus:
New Coke continued to do what it had originally been designed to do: win taste tests. In 1987, The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
surveyed 100 randomly selected cola drinkers, the majority of whom indicated a preference for Pepsi, with Classic Coke accounting for the remainder save two New Coke loyalists. When this group was given a chance to try all three in a blind test, New Coke slightly edged out Pepsi - yet many drinkers reacted angrily to finding they had chosen a brand other than their favorite.
Goizueta never once regretted the decision, even throwing an anniversary party for New Coke in 1995, and continued to drink it until his own death.
New Coke after Coke Classic
In the short run, the reintroduction of old Coke saved Coke's sales numbers and brought it back in the good graces of many customers and bottlers. Phone calls and letters to the company were as joyful and thankful as they had been angry and depressed ("You would have thought we'd cured cancer", said one executive.).But confusion reigned at the company's marketing department, which had to come up with a plan to market two Cokes where such plans had been completely off the table mere months before. Classic Coke did not need much help, with a "Red, White and You" campaign showcasing the American virtues many of those who had clamored for its reintroduction had pointedly reminded the company it embodied. But the company was at a loss to sell what was now just Coke. "The Best Just Got Better" could no longer be used. Marketers fumbled for a strategy for the rest of the year. Matters were not helped when McDonald's
McDonald's
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948...
announced shortly after the reintroduction that it was switching over to Classic Coke at every store across the country.
Max Headroom (character)
Max Headroom is a fictional British artificial intelligence, known for his wit and stuttering, distorted, electronically sampled voice. The character was created by George Stone, Annabel Jankel, and Rocky Morton in the mid nineteen eighties, and portrayed by Matt Frewer as "The World's first...
, the purportedly computer-generated media personality played by Matt Frewer
Matt Frewer
Matthew "Matt" Frewer is a Canadian American stage, TV and film actor. Acting since 1983, he is known for portraying the 1980s icon Max Headroom and the retired villain Moloch in the film adaptation of Watchmen.-Life and career:...
, was chosen to replace Cosby as the spokesman (of sorts) for Coke's new "Catch the Wave" campaign. A very stylish figure in his jacket and sunglasses
Sunglasses
Sunglasses or sun glasses are a form of protective eyewear designed primarily to prevent bright sunlight and high-energy visible light from damaging or discomforting the eyes. They can sometimes also function as a visual aid, as variously termed spectacles or glasses exist, featuring lenses that...
, he was already known to much of the U.S. youth audience through appearances on MTV
MTV
MTV, formerly an initialism of Music Television, is an American network based in New York City that launched on August 1, 1981. The original purpose of the channel was to play music videos guided by on-air hosts known as VJs....
, where he had first appeared in the Art of Noise's "Paranoimia
Paranoimia
"Paranoimia" is a song by English synthpop group Art of Noise released in 1986, from their album In Visible Silence.The song's better-known version was a version released as a single, featuring television character Max Headroom on vocals...
" video
Music video
A music video or song video is a short film integrating a song and imagery, produced for promotional or artistic purposes. Modern music videos are primarily made and used as a marketing device intended to promote the sale of music recordings...
, and Cinemax
Cinemax
Cinemax, sometimes abbreviated as simply "Max", is a collection of premium television networks that broadcasts primarily feature films, along with softcore erotica, original action series, documentaries and special behind-the-scenes features. Cinemax is operated by Home Box Office, Inc., a...
. The campaign was launched with a memorable television commercial, produced by McCann-Erickson New York, with Max saying in his trademark stutter, "C-c-c-catch the wave!" and referring to his fellow "Cokeologists". In a riposte to Pepsi's televisual teasings, one showed Headroom asking a Pepsi can he was "interviewing" how it felt about more drinkers preferring the new Coke to it and then cut to the condensation forming on the can. "S-s-s-s-sweating?" he asked.
It was a huge success, and surveys likewise showed that more than three-quarters of the target market were aware of the ads within two days. Coke's corporate hotline received more calls about Max than any previous spokesperson, some even asking if he had a girlfriend. The ads and campaign continued throughout the year and were chosen as best of 1986 by Video Storyboard of New York.
Coke II
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, and United States territories
United States territory
United States territory is any extent of region under the jurisdiction of the federal government of the United States, including all waters including all U.S. Naval carriers. The United States has traditionally proclaimed the sovereign rights for exploring, exploiting, conserving, and managing its...
, while the original formula continued to be sold in the rest of the world (had the new version been a success it would presumably have been introduced worldwide). New Coke was eventually returned to the company's product portfolio; it was test-marketed in certain U.S. cities under the name Coke II in 1990 and officially renamed Coke II in 1992, despite the company's original intention not to create a second brand. Filmmaker Miranda July
Miranda July
Miranda July is a performing artist, writer, actress and film director. Born Miranda Jennifer Grossinger, she works under the surname of "July," which can be traced to a character from a "girlzine" Miranda created with high school friend Johanna Fateman, called Snarla.- Background :Miranda...
is said to have suggested the name of Coke II while working as a tastemaker for an ad agency.
However, Coca-Cola did little to promote or otherwise distinguish it. In a market already offering far more choice of drinks calling themselves "Coke" in some fashion or another, the public saw little reason to embrace a product they had firmly rejected seven years earlier, and within about a year, Coke II was largely off the American shelves again. By 1998, it could only be found in some scattered Midwestern
Midwestern United States
The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest....
markets, and in 2002, Coke II was discontinued entirely. On August 16 of that year, Coke announced a change of the label in which the word "Classic" was no longer so prominent, leading to speculation that it would eventually be removed and the last legacy of New Coke eliminated from the company's packaging. In 2009, Coca-Cola permanently removed "Classic" from its North American packaging.
It has found acceptance in some foreign markets. , it was still selling in Yap
Yap
Yap, also known as Wa'ab by locals, is an island in the Caroline Islands of the western Pacific Ocean. It is a state of the Federated States of Micronesia. Yap's indigenous cultures and traditions are still strong compared to other neighboring islands. The island of Yap actually consists of four...
(one of the four Federated States of Micronesia
Federated States of Micronesia
The Federated States of Micronesia or FSM is an independent, sovereign island nation, made up of four states from west to east: Yap, Chuuk, Pohnpei and Kosrae. It comprises approximately 607 islands with c...
), along with Coca-Cola C2
Coca-Cola C2
Coca-Cola C2 was a cola-flavored beverage introduced by The Coca-Cola Company first in Japan, then later on 7 June 2004 in the United States , in response to the low-carbohydrate diet trend...
. It is also still very popular in the U.S. Territory
United States territory
United States territory is any extent of region under the jurisdiction of the federal government of the United States, including all waters including all U.S. Naval carriers. The United States has traditionally proclaimed the sovereign rights for exploring, exploiting, conserving, and managing its...
American Samoa
American Samoa
American Samoa is an unincorporated territory of the United States located in the South Pacific Ocean, southeast of the sovereign state of Samoa...
, where it is still sold in most Coke
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
vending machines.
Commercial legacy
New Coke had the spotlight for only three months but casts a long shadow, in both the business world and popular culture, that can be seen today. It is most frequently mentioned as a cautionary tale among businesses against tampering too extensively with a well-established and successful brand."For a product so widely despised," noted AdWeek
Adweek
Adweek is a weekly American advertising trade publication that was first published in 1978....
blogger Tim Nudd in 2006, more than two decades later, "New Coke (a.k.a. Coke II) still gets an admirable amount of ink." He noted Blink
Blink (book)
Blink: The Power of Thinking Without Thinking is a 2005 book by Malcolm Gladwell. It presents in popular science format research from psychology and behavioral economics on the adaptive unconscious; mental processes that work rapidly and automatically from relatively little information...
and Why Most Things Fail that dealt with it at some length, as well as two recent mentions in Forbes and Sports Illustrated
Sports Illustrated
Sports Illustrated is an American sports media company owned by media conglomerate Time Warner. Its self titled magazine has over 3.5 million subscribers and is read by 23 million adults each week, including over 18 million men. It was the first magazine with circulation over one million to win the...
.
Within Coca-Cola, the role the company's bottlers had played in forcing its hand led executives to create a new subsidiary, Coca-Cola Enterprises
Coca-Cola Enterprises
Coca-Cola Enterprises is a marketer, producer, and distributor of Coca-Cola products. It is the anchor bottler for Western Europe, and was formerly the anchor bottler for most of North America....
, which bought out several of the larger bottlers and placed distribution and marketing efforts more tightly under its control.
Conspiracy theories
Coca-Cola's sudden reversal on New Coke led to several rumorRumor
A rumor or rumour is often viewed as "an unverified account or explanation of events circulating from person to person and pertaining to an object, event, or issue in public concern" However, a review of the research on rumor conducted by Pendleton in 1998 found that research across sociology,...
s and conspiracy theories
Conspiracy theory
A conspiracy theory explains an event as being the result of an alleged plot by a covert group or organization or, more broadly, the idea that important political, social or economic events are the products of secret plots that are largely unknown to the general public.-Usage:The term "conspiracy...
that have circulated in the years since to explain how a company with the resources and experience of Coca-Cola could have made such an apparently colossal blunder.
Some explanations that have been proffered are:
- The company intentionally changed the formula, hoping consumers would be upset with the company, and demand the original formula to return, which in turn would cause sales to spike. Keough answered this speculation by saying "We're not that dumb, and we're not that smart".
- The putative switch was planned all along to cover the change from sugar-sweetened Coke to much less expensive high fructose corn syrupHigh fructose corn syrupHigh-fructose corn syrup — also called glucose-fructose syrup in the UK, glucose/fructose in Canada, and high-fructose maize syrup in other countries — comprises any of a group of corn syrups that has undergone enzymatic processing to convert some of its glucose into fructose to produce...
(HFCS), a theory that was supposedly given credence by the apparently different taste of Coke Classic when it first hit the market (the U.S. sugar trade association took out a full-page ad lambasting Coke for using HFCS in all bottling of the old formula when it was reintroduced). - It provided cover for the final removal of all cocaCocaCoca, Erythroxylum coca, is a plant in the family Erythroxylaceae, native to western South America. The plant plays a significant role in many traditional Andean cultures...
derivatives from the product to placate the Drug Enforcement AdministrationDrug Enforcement AdministrationThe Drug Enforcement Administration is a federal law enforcement agency under the United States Department of Justice, tasked with combating drug smuggling and use within the United States...
, which was trying to eradicateCoca eradicationCoca eradication is a controversial strategy strongly promoted by the United States government starting in 1961 as part of its "War on Drugs" to eliminate the cultivation of coca, a plant whose leaves are not only traditionally used by indigenous cultures but also, in modern society, in the...
the plant worldwide to combat an increase in cocaineCocaineCocaine is a crystalline tropane alkaloid that is obtained from the leaves of the coca plant. The name comes from "coca" in addition to the alkaloid suffix -ine, forming cocaine. It is a stimulant of the central nervous system, an appetite suppressant, and a topical anesthetic...
trafficking and consumption. While Coke's executives were indeed relieved the new formula contained no coca, and concerned about the long-term future of the Peruvian governmentPolitics of PeruPolitics of the Republic of Peru takes place in a framework of a presidential representative democratic republic, whereby the President of Peru is both head of state and head of government, and of a pluriform multi-party system. Executive power is exercised by the government. Legislative power is...
-owned coca fields that supplied it in the face of increasing DEA pressure to end cultivation of the crop, there was no direct pressure from the DEA on Coca-Cola to do so.
Taste-test issues
In talks, and his book BlinkBlink (book)
Blink: The Power of Thinking Without Thinking is a 2005 book by Malcolm Gladwell. It presents in popular science format research from psychology and behavioral economics on the adaptive unconscious; mental processes that work rapidly and automatically from relatively little information...
, author Malcolm Gladwell
Malcolm Gladwell
Malcolm Gladwell, CM is a Canadian journalist, bestselling author, and speaker. He is currently based in New York City and has been a staff writer for The New Yorker since 1996...
relates his conversations with market researchers in the food industry who put most of the blame for the failure of New Coke on the flawed nature of taste test
Taste Test
Taste Test may refer to:*"Taste Test", a song by Sleater-Kinney from their 1996 album Call the Doctor*Blind wine tasting, a wine taste test involving no knowledge of the wine's identity on the part of the tasters...
s. They claim most are subject to systematic biases.
Tests such as the Pepsi Challenge
Pepsi Challenge
The Pepsi Challenge has been an ongoing marketing promotion run by PepsiCo since 1975. It is also the name of a cross country ski race at Giant's Ridge Ski Area in Biwabik, Minnesota, an event sponsored by Pepsi.-Method:...
were what are called in the industry "sip tests", meaning that drinkers were given small samples (less than a can or bottle's worth) to try out. Gladwell contends that what people say they like in these tests may not reflect what they will actually buy to sit at home and drink over a week or so. Carol Dollard, who once worked in new product development for Pepsi, told Gladwell, "I've seen many times where the sip test will give you one result and the home-use test will give you the exact opposite." For example, although many consumers react positively to the sweeter taste of Pepsi when drinking it in small volumes, it may become unattractively sweet when drunk in quantity. Coke, on the other hand, may be more attractive for drinking in volume, precisely because it is less sweet. A more comprehensive testing regimen could possibly have revealed this, Gladwell's sources believe.
Gladwell reports that other market researchers have criticized Coke for not realizing that much of its success as a brand came from what they call sensation transference, a phenomenon first described by marketer Louis Cheskin in the late 1940s: tasters unconsciously add their reactions to the drink's packaging into their assessment of the taste. For example, one of the researchers told Gladwell that his firm's research had found 7-Up drinkers offered a sample from a bottle with a distinctly more yellowish label believe the flavor to be more lemon
Lemon
The lemon is both a small evergreen tree native to Asia, and the tree's ellipsoidal yellow fruit. The fruit is used for culinary and non-culinary purposes throughout the world – primarily for its juice, though the pulp and rind are also used, mainly in cooking and baking...
y, although it wasn't.
In Coke's case, it is alleged that buyers, subject to sensation transference, were "tasting" the red color of the container and distinctive Coca-Cola script as much as the drink itself. It was thus, in their opinion, a mistake to focus solely on the product and its taste. "The mistake Coke made," said Darrel Rhea, an executive with the firm Cheskin founded, "was in attributing their loss in share entirely to the product". He points to Pepsi's work in establishing a youth-oriented brand identity from the 1960s onward as having more bearing on its success.
Coke considered but rejected gradually changing the drink's flavor incrementally, without announcing that they were doing so. Executives feared that the public would notice and exaggerate slight differences in taste. In 1998, Joel Dubow, a professor of food marketing at St. Joseph's University
Saint Joseph's University
Saint Joseph's University is a private, coeducational Roman Catholic Jesuit university located partially in the Wynnefield section of Philadelphia and partially in Lower Merion Township and located in the Pennsylvania Main Line, Pennsylvania, United States.The school was founded in 1851 as Saint...
, tested this "flavor balance hypothesis" and argued that it was not true. He and fellow researcher Nancy Childs tested mixtures of classic Coke and Coca-Cola II and found that the gradual changes of taste were not noticed by a significant number of tasters. Coke, he said, would have succeeded had it chosen this strategy.
See also
- C2Coca-Cola C2Coca-Cola C2 was a cola-flavored beverage introduced by The Coca-Cola Company first in Japan, then later on 7 June 2004 in the United States , in response to the low-carbohydrate diet trend...
- Crystal PepsiCrystal PepsiCrystal Pepsi was a caffeine-free soft drink made by PepsiCo from 1992 to 1993 in the United States, Canada, and for a short time in Australia. Crystal Pepsi was sold for a longer time in Europe.-History:...
- Dasani (United Kingdom)
- Cola warsCola warsThe Cola Wars are a campaign of mutually-targeted television advertisements and marketing campaigns since the 1980s between soft drink manufacturers Coca-Cola Company and PepsiCo Incorporated.- Competition :...
- OK SodaOK SodaOK Soda was a soft drink created by The Coca-Cola Company in 1993 that aggressively courted the Generation X demographic with unusual advertising tactics, including endorsements and even outright negative publicity. It did not sell well in select test markets and was officially declared out of...
Further reading
- Civille, Gail Vance and Lyon, Brenda G., Aroma and Flavor Lexicon for Sensory Evaluation, American Society for Testing and Materials, West Conshohocken, PA 1996.
- Hine, Thomas; The Total Package: The Secret History and Hidden Meanings of Boxes, Bottles, Cans, and Other Persuasive Containers; Back Bay Books, 1997. ISBN 0-316-36546-7.
- Imram, Nazlin (1999). "The role of visual cues in customer perception and acceptance of a food product", Nutrition & Food Science, 99 (5):224-230
- Leven, S. and Levine, D., (1996). "Multiattribute Decision Making in Context: A Dynamic Neural Network Methodology", Cognitive Science, 20:271-299.
- Meilgaard, Morten; Civille, Gail Vance and Carr, B. Thomas, Sensory Evaulation Techniques, third edition, CRC Press, Boca Raton, Fla. 1999.
- Wilson, Timothy and Schooler, Jonathan (1999), "Thinking Too Much: Introspection Can Reduce the Quality of Preferences and Decisions," Journal of Personality and Social Psychology, 60(2):181-192.
External links
- Coca-Cola history on New Coke
- God, What a Blunder: The New Coke Story By Michael Bastedo Angela Davis With a good talk on the problems of their research methodologies (focus groups v. surveys).
- QuickTime news clip on New Coke introduction from KTLAKTLAKTLA, virtual channel 5, is a television station in Los Angeles, California, USA. Owned by the Tribune Company, KTLA is an affiliate of the CW Television Network. KTLA's studios are on Sunset Boulevard in Hollywood, and its transmitter is located atop Mount Wilson...
news in Los Angeles, courtesy of CNNCNNCable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
.com - Cokelore (Knew Coke) — Snopes' take on New Coke