[28], 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 Coca-Cola's control. The new flavor outperformed both traditional Coke and Pepsi in market research taste tests. Chicago Tribune columnist Bob Greene wrote some widely reprinted pieces ridiculing the new flavor and damning Coke's executives for having changed it. 15:02. New Coke sort of faded away (it quickly settled to a 3% market share in its first year and was redubbed “Coke II” in 1990) and now holds onto a 0.1% market share. 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),[13] while nevertheless expressing interest in securing The Coca-Cola Company as a client of his new firm should it reintroduce the old formula. After all, they had performed 190,000 blind taste tests on U.S. and Canadian consumers. Executives decided to make a risky change. Goizueta, Coca-Cola's CEO, described the new flavor as "bolder", "rounder", and "more harmonious",[8]:352 and defended the change by saying that the drink's secret formula was not sacrosanct and inviolable. By 1985, Coca-Cola had been losing market share to diet soft drinks and non-cola beverages for many years. By 1983, it had declined to under 24%, largely because of competition from Pepsi-Cola. When Goizueta died in 1997, the company's share price was well above what it was when he had taken over 16 years earlier and its position as market leader even more firmly established. [11] Goizueta also refused to admit that taste tests had led the change, calling it "one of the easiest decisions we've ever made". The “New Coke” would deliver a “smoother, rounder, yet bolder taste.” “It’s a more harmonious flavor,” said Chairman and Chief Executive Roberto Goizueta on April 23, 1985. In addition to the noisier public protests, boycotts, and bottles being emptied into the streets of several cities, the company had more serious reasons to be concerned. [14] Zyman also heard doubts and skepticism from his relatives in Mexico, where New Coke was scheduled to be introduced later that summer, when he went there on vacation. “People all of a sudden wanted to actually taste the beverage again, and not just kind of feel good about it,” Greising says. ViewFromTheCheapSeats 4,899 views. [24], In 1985, New Coke was sold only in the United States, United States territories, and Canada while the original formula continued to be sold in the rest of the world. [10]:158 Over the course of the month, Coca-Cola's chemists also quietly reduced the acidity level of the new formula, hoping to assuage complaints about the flavor and allow its sweetness to be better perceived (advertisements pointing to this change were prepared, but never used).[8]:364. Diet Pepsi and Diet Coke taste vastly different. "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. Some consumers even 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 exhausted. About 10–12% of testers felt angry and alienated at the thought, and said they might stop drinking Coke altogether. [26], On August 16, 2002, The Coca-Cola Company announced a change of the label of Coke Classic in which the word "Classic" was no longer so prominent, leading to speculation that it would eventually be removed and the last traces of New Coke eliminated. READ MORE: How the ‘Blood Feud’ Between Coke and Pepsi Escalated During the 1980s Cola Wars. However, the American public's reaction to the change was negative, and "New Coke" was considered a major failure. Production of the original formulation ended later that week. 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. The campaign was launched with a television commercial produced by McCann Erickson New York, with Max saying in his trademark stutter, "C-c-c-catch the wave!" The 20 bottlers still suing Coca-Cola made much of the change in their legal arguments. The company's bottlers were already complaining about absorbing other recent additions into the product line since 1982, after the introduction of Diet Coke; Cherry Coke was launched nationally nearly concurrently with New Coke during 1985. They viewed the company's decision to change the formula through the prism of the Civil War, as another surrender to the "Yankees". But the company was at a loss to sell what was now just "Coke". Sales figures from those cities, and other areas where it had been introduced, showed a reaction that went as the market research had predicted. Coke, he said, would have succeeded had it chosen this strategy. To hear some tell it, April 23, 1985, was a day that will live in marketing infamy ... spawning consumer angst the likes of which no business has ever seen. Six months after the rollout, Coke's sales had increased at more than twice the rate of Pepsi's. [8]:366 Matters were not helped when McDonald's announced shortly after the reintroduction of Coca-Cola Classic, that it was immediately switching from New Coke back to original Coca-Cola at all of its restaurants.[8]:369. The putative switch was planned all along to cover the change from sugar-sweetened Coke to much less expensive, It provided cover for the final removal of all, This page was last edited on 29 November 2020, at 11:58. In July 2002, Coca-Cola announced that Coke II would be discontinued entirely. said Darrel Rhea, an executive with the firm Cheskin founded. So in what must have been seen as a logical step, Coca-Cola started working on a new formula. “The truth is we’re not that dumb and we’re not that smart.”. Twice a week we compile our most fascinating features and deliver them straight to you. The Coca-Cola Company spent a considerable amount of time trying to figure out where it had made a mistake, ultimately concluding that it had underestimated the public reaction of the portion of the customer base that would be alienated by the switch. The campaign 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. [21], New Coke continued to do what it had originally been designed to do: win taste tests. The company received over 40,000 calls and letters,[7]:119 including one letter, delivered to Goizueta, that was addressed to "Chief Dodo, The Coca-Cola Company". After World War II, Coca-Cola held 60% of the market share. Many of these drinkers were Southerners, some of whom considered Coca-Cola a fundamental part of their regional identity. The Coca-Cola Company's apparently sudden reversal on New Coke led to conspiracy theories, including: In his book Blink: The Power of Thinking Without Thinking (2005), 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 tests. At protests staged by grassroots groups such as “Old Cola Drinkers of America,” consumers poured the contents of New Coke bottles into sewer drains. [22], Goizueta claimed that he never once regretted the decision to change Coca-Cola. With his slicked-back hair and sunglasses, he was already known to much of the U.S. youth audience through appearances on MTV and Cinemax. [2] The story of New Coke remains influential as a cautionary tale against tampering with a well-established and successful brand. In many areas, New Coke was initially introduced in "old" Coke packaging; bottlers used up remaining cans, cartons and labels before new packaging was widely available. [5], The new product continued to be marketed and sold as Coke (until 1992, when it was renamed Coke II) while the original formula was named Coca-Cola Classic, and for a short time it was referred to by the public as Old Coke. No one at Coca-Cola was fired or otherwise held responsible for what is still widely perceived as a mistake, for the simple reason that it ultimately wasn't. Coca-Cola’s disastrous attempt at rebranding Coke in 1985 delivered a painful lesson: Don't mess with a classic. Finally, the Coca-Cola board decided that enough was enough, and plans were set in motion to bring back the old Coke. Within weeks of the announcement, the company was fielding 5,000 angry phone calls a day. Why did New Coke fail when Coca Cola spent $4 million on development? How the ‘Blood Feud’ Between Coke and Pepsi Escalated During the 1980s Cola Wars, How McDonald's Beat Its Early Competition and Became a Fast Food Icon, Watch full episodes of Eating History online. [10]:183, "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. In 1985, one consumer showed her love of old Coke and distaste for the new … It was such an immediate failure that the day New Coke was announced, Pepsi gave their employees the day off. [25], The Coca-Cola Company did practically nothing to promote or otherwise distinguish it. The company conducted over 200,000 taste tests and commissioned numerous focus groups and surveys which executives claimed showed consumers preferred the taste of New Coke … Facing a growing dilemma, there was a knee-jerk reaction to alter the traditional recipe, one which tens of millions of loyal customers had grown to love, and plan ahead for a successful … Goizueta explained why the decision to change Coke’s 99-year-old formula was by no means a hasty one. (Moreover, in 2019, Coca-Cola actually re-released a very limited run of New Coke. "S-s-s-s-sweating?" The press conference at New York City's Lincoln Center to introduce the new formula did not go well. “Some cynics say that we planned the whole thing,” Keough said. “Some may choose to call this the boldest single marketing move in the history of the packaged-goods business,” Goizueta said. [10]:163, They were, nonetheless, joined by some voices from outside the region. His organization eventually received over 60,000 phone calls. He noted Blink: The Power of Thinking Without Thinking (2005) by Malcolm Gladwell, and Why Most Things Fail: Evolution, Extinction and Economics (2005) by Paul Ormerod, that dealt with it at some length, as well as two recent mentions in Forbes and Sports Illustrated. Taste Testing The New Old New Coke! [32]:163 In Coke's case, it is alleged that buyers, subject to sensation transference, were also "tasting" the red color of the container and distinctive Coca-Cola script. In fact, Coke's sales were up 8% over the same period as the year before.[6]. The problem, though, is that the company had underestimated loyal drinkers’ emotional attachments to the brand. © 2020 A&E Television Networks, LLC. - Duration: 15:02. "The Coca-Cola matching with the coffee, just such an easy combination, you taste both of it. Seventy-nine days after their initial announcement, Coca-Cola executives once again held a press conference on July 11, 1985—this time to announce a mea culpa and the return of the original formula, which hardly had time to gather dust in its Atlanta bank vault, under the label “Coca-Cola Classic.” “Our boss is the consumer,” Keough said. New Coke, or Coke II as it was rebranded, is known for being the biggest marketing mistake ever. ), “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,” Keough admitted. Ads for New Coke were booed heavily when they appeared on the scoreboard at the Houston Astrodome. On April 23, 1985, Coca-Cola Company chairman and CEO Roberto Goizueta stepped before the press gathered at New York City’s Lincoln Center to introduce the new formula, which he declared to be “smoother, rounder, yet bolder—a more harmonious flavor.” The press, however, said what Goizueta couldn’t admit: New Coke tasted sweeter and more like Pepsi. The biggest backfire: New Coke "tasted more like Pepsi" according to the History Channel. [12], In the short run, the reintroduction of original Coca-Cola saved Coke's sales figures and brought it back in the good graces of many customers and bottlers. Many reported that some acquaintances and even friends and relatives had ostracized them, or had expressed displeasure in other emotionally hurtful ways. The story of New Coke is an oft-recited parable in the marketing world. Since its introduction in 1886, Coca-Cola’s secret recipe had been tweaked several times—such as when changing sweeteners from cane sugar to beet sugar to corn syrup—but its taste had remained constant. The new Coke would have a smoother, sweeter taste -- similar to Diet Coke, but sweetened with corn syrup. Having produced its new formula, the Atlanta-based company conducted 200,000 taste … [12] Even Fidel Castro, a longtime Coca-Cola drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence. 7 years ago. [16], New Coke's sales dwindled to a three percent share of the market, although it was selling quite well in Los Angeles and some other key markets. Many fans complained because they wanted to order some, and the company apologized for the delays on social media platforms. He insisted that the containers carry the "New!" [35], On May 21, 2019, Coca-Cola announced that the 1985 formulation (once again bearing the name "New Coke") would be reintroduced to promote the third season of the Netflix series Stranger Things. Coca-Cola Classic quickly outsold New Coke and within a few months had returned to its position as the top-selling sugar cola, ahead of Pepsi. TIL New Coke actually performed better than Classic Coke and Pepsi in taste tests. [7]:119[12], Coca-Cola introduced the new formula with marketing pushes in New York, where workers renovating the Statue of Liberty for its 1986 centenary were given cans,[12] and Washington, D.C., where thousands of cans were given away in Lafayette Park. This was true for a few regions, because Coca-Cola Classic differed from the original formula in that all bottlers who had not already done so were using high fructose corn syrup instead of cane sugar to sweeten the drink, though most had by this time. In fact, our tasters felt the taste of New Coke was much more similar to Diet Coke than to Coca-Cola Classic or Coca-Cola Zero Sugar, which might be why … "[8]:360 Bottles and cans continued to bear the "Coca-Cola Classic" title until January 2009, when the company announced it would stop printing the word "Classic" on the labels of 16-US-fluid-ounce (470 ml) bottles sold in parts of the southeastern United States. Cosby claimed that his commercials praising the superiority of the new formula had hurt his credibility. ", "New Coke and Netflix Take Viewers Back to 1985 for Stranger Things Season 3 in First-of-its-Kind Partnership", New Coke is coming back and it's all because of Netflix's hit show "Stranger Things", "New Coke is the weirdest pop culture throwback in Stranger Things 3", "Multiattribute Decision Making in Context: A Dynamic Neural Network Methodology", "God, What a Blunder: The New Coke Story", "Coke Lore (Knew Coke) — Snopes' take on New Coke", "QuickTime news clip on New Coke introduction", U.S. v. 40 Barrels & 20 Kegs of Coca-Cola, https://en.wikipedia.org/w/index.php?title=New_Coke&oldid=991313016, Short description is different from Wikidata, Articles with unsourced statements from January 2016, CS1 maint: BOT: original-url status unknown, Creative Commons Attribution-ShareAlike License. [6], Coca-Cola's senior executives commissioned a secret project headed by marketing vice president Sergio Zyman and Coca-Cola USA president Brian Dyson to create a new flavor for Coke. [6] The big test, however, remained in the Southeast, where Coke was first bottled and tasted. Asked if they would buy and drink the product if it were Coca-Cola, most testers said they would, although it would take some getting used to. Despite New Coke sales dropping like crazy after the return of Classic Coke, when the Wall Street Journal in 1987 did yet another blind taste test of Pepsi, Classic Coke, and New Coke, with most of the participants before the test saying they preferred one or the other of Coke or Pepsi, New Coke won out as the most … 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,[12] they were less enthusiastic about the taste. The blunder was so colossal that some thought it must have been an intentional marketing gimmick. [10]:136 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. [27], "For a product so widely despised," noted AdWeek blogger Tim Nudd in 2006, "New Coke (a.k.a. While that has become conventional wisdom in the ensuing years, some analyses have suggested otherwise. 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. It was renamed Coke II in 1992,[1] and was discontinued in July 2002. This trend further eroded Coca-Cola's market share. he asked. [7]:118, 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. [30] So many people were eager to buy it, however, that the volume of orders crashed the Coca-Cola website. [18][19] Later, when he became 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.[20]. He and fellow researcher Nancy Childs tested mixtures of Coca-Cola Classic and Coke II and found that the gradual changes of taste were not noticed by a significant number of tasters. Despite ongoing resistance in the South, New Coke continued to do well in the rest of the country. New Coke was the unofficial name for the reformulation of Coca-Cola introduced in April 1985 by the Coca-Cola Company.