Schadenfreude Fridays: New Coke and the Acid Rain Fallout of the Cola Wars

My100Cans

Coca-Cola nearly caused an American uprising by changing its formula, then earned millions and millions of dollars by changing it back. People in the 80s clearly didn't have enough things to care about.

If you grew up in the 1990s, your Coca-Cola cans came in many designs, but always with one unifying word: "Classic." What you may not know is that designation was the end result of a failed experiment that nearly left the great city of Atlanta as a pile of high fructose corn syrup-laced ashes.

There's something to be said about consistency. Unless, of course, you were speaking in the 1980s - in which case, that something was "slap some day-glo paint on it and give it a mullet. There, perfect. More cocaine, please." Even Coca-Cola, an American institution so iconic and timeless it may as well have sponsored the Declaration of Independence, fell victim to the era's unstable whims. Coke, in the face of rising competition and a consumer base that knew very little about diabetes, changed their cornerstone recipe in 1985. That move spurred an American backlash that rated somewhere in the collective consciousness between "OJ Simpson in the summer of 1992" and "Richard Nixon just pointing to his crotch when informed of United States laws and regulations."

America's most recognizable brand eventually rose victorious in a battle known as the "Cola Wars," but not without picking up some scars first. The emergence of Pepsi-Cola as a competitor put the sugarwater giant on its heels and forced a soda revolution that changed this country forever. New Coke, the sweeter soft drink designed to make Pepsi-Cola the new RC Cola and RC Cola the new Dr. Thunder, t-boned the broadside of this nation and caused damage that only the original formula could fix.

So how did we get to this point?

Coke had entered the 1950s with a dominant 60 percent share of the soft drink industry. However, that majority interest declined as baby boomers grew up and competition rose from new startups and old establishments. Their main rival was Pepsi, the cola once awesomely known as "Brad's Drink." Brad's sweeter recipe was converting former brand loyalists into new customers at Coca-Cola's expense. The old-time (est. 1893) soda charged headfirst into a big-brand battle at the top of Mount Cola with their Atlanta rivals thanks to some bold marketing and fortunate timing.

Pepsi had always been a pioneer when it came to finding successful advertising gimmicks. The brand's post-depression rise was tied to their use of 12-ounce bottles rather than the Coke standard of 6.5, paving the way for the 52-ounce soda buckets of the future and becoming the root cause of Michael Bloomberg's nightmares. They continued to grow in the 40s - and earn the ire of the KKK - by targeting African American consumers through an all-black marketing and sales team. Unfortunately, the flow of their creative juices slowed to a trickle in the 60s and early 70s where ventures like sponsoring a minor league hockey team and televised beauty pageants seemed more appropriate for the Springfield Investorettes than a billion-dollar corporation.


That changed in 1975, thanks to the Pepsi Challenge. Their premise - that random strangers were willing to drink whatever you told them to if it meant being in a commercial - paid off when their blind taste tests showed Coke drinkers choosing Pepsi when confronted with both colas. The inexplicable side effect that participants' natural reactions were to default to shame and embarrassment after the reveal was simply the cherry on top for Pepsi-Cola's advertising executives. Not only were Coke drinkers closet Pepsi fans, they also hated themselves for preferring America's inferior cola.

The ads were simple, but they were effective. Pepsi's market share grew at the expense of their biggest competitor through the 70s and into the 80s. Coca-Cola, who once cornered nearly two-thirds of the soft drink market, saw their action drop to 23 percent by 1983. This surge was most apparent amongst brand loyalists who refused to taint their soda allegiances. In 1972, 18 percent of cola drinkers exclusively drank Coke, while four percent said the same for Pepsi. By the early 1980s, the two companies each hovered around 12 percent of the soda lunatic market.

Coke was in trouble. Their lock on soda fountains kept them on top of the beverage game in American restaurants, but sales had shifted towards Pepsi in supermarkets where consumers had a wide range of caffeinated choices. Their sugar swagger had dropped so hard that they didn't even have the pull to be the only cola in space by 1985. The Atlanta company knew that something big had to happen - something that would change the way Americans looked at cola entirely. That revolution was a sickly sweet soft drink that raised more continental ire than any event since the Civil War tore this great nation apart some 120 years earlier.

Coca-Cola executives, tired of a decade of getting blasted by selectively observed taste tests, sprung into action with a plan so grand that it could only fail spectacularly. They would take 99 years of consistency and kick its ass to the curb. New Coke - a sweeter, more syrupy Coca-Cola - was unleashed on the world on April 23, 1985. The old recipe was discontinued in conjunction with the release. The Coca-Cola you knew and love was buried, and paid endorsers like Bill Cosby and Michael J. Fox were brought in to dance on its sugary grave. Unfortunately for the corporation, that party would not last long.

The ambition and scope of New Coke's failure was impressive for all the reasons that went into making it a success. Unlike other short sighted American foodscape catastrophes like Red Lobster's abject underestimation of its customers' demand for species-destroying amounts of snow crab or Hulk Hogan's baffling decision to open up a fast-food Italian restaurant in the Mall of America, Coca-Cola took the time and effort to make their new product the Fat Boy of the Cola Wars. Executives ran over 190,000 taste tests comparing their new product to Pepsi over the course of several years. That intensive research, dubbed "Project Kansas" to avoid raising suspicion (because cryptic code names rarely draw curious minds) cost the company more than $4 million. New Coke may have tasted great - at first - but it was too sweet to maintain a customer base that was built on a century of consistency. The recipe was engineered to fail in a very specific way that could only be devised by the best intentions of thousands.

The reason for that catastrophic breakdown? A systematic bias that took smaller sips as an indicator of taste preferences rather than a subject's desire to drink a whole can. As Malcolm Gladwell would later point out in his book Blink, limited sample taste tests only measure the first impression of a food or drink rather than a person's willingness to revisit it. Coca-Cola was willing to throw away consistency to bring new customers into the fold. Their problem was that they alienated their loyal fan base to chase a demographic that wouldn't come back for more, despite the preference of that first sip. Americans were happy to roll with their teaspoon of sugar - but when it came to finishing 12 ounces, they tapped out to the mercy of their body's insulin production.

New Coke sputtered on the fumes of those failed focus groups. Soon, Americans from coast to coast rose up to make sure the rebellious spirit that defined the country during Vietnam wasn't entirely dead - just emaciated and a bit woozy after a decade of hibernation.

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Won't Somebody Think of the Children??? via i1.ytimg.com

Angry customers flooded Coke's customer hotlines with more than 1,500 calls per day, increasing the normal call volume by nearly 400 percent. Unlike in the past, these calls weren't questions about cleaning the grime from pennies or dissolving baby teeth. Instead, they were the wails of incensed brand loyalists who demanded to know why their faithful southern company had caved to "yankee" pressure and changed the sugarwater from which they'd been weaned off breast milk. Coke was having a worse time dealing with customers in 1985 than when they removed the cocaine from their formula 76 years earlier.

The Old Coca-Cola Drinkers of America rose up with more than 100,000 united voices to register their disgust. The Society for the Preservation of the Real Thing was another group that apparently didn't see eye-to-eye with the OCCDoA's views on high fructose corn syrup and decided to splinter off into their own faction. According to Coca-Cola's official website, the deepest transgression was one angry caffeine addict's decision to address a letter to executive Roberto Goziueta as "Chief Dodo" - a move that stung even deeper than the cruel ding-dong-ditches that took place at his 7,000 square foot Buckhead mansion or the legions of fans who stood near his Mercedes just to call him a "boogerman" as he left the office. People were pissed, thirsty, and organized - and Coke had little room to wriggle out of their mistake.

The company began backpedaling like a four-star cornerback recruit. Rather than double down on their mistake and rebrand New Coke as a beverage "By Hummingbirds, For Hummingbirds," Coca-Cola caved to the pressure of its former consumers. The original taste returned as Coca-Cola Classic on July 11, 1985, less than three months after it had been pulled from the shelves. Arkansas Senator David Pryor understood the importance of the day, announcing on the floor of the Senate that the shift was "a meaningful moment in U.S. history." Somewhere, Abraham Lincoln, George Washington, and William Henry Harrison looked down on Atlanta and collectively shed a big fat patriotic tear. As legend has it, that teardrop grew up to one day become the Chattahoochee River (citation needed).

The return of Coca-Cola Classic was a marketing coup. Within six months, the original brand was outselling both its new breed and its main competitor. The introduction of New Coke had helped Pepsi grow its market share by four percent in 1985; bringing back the original recipe helped Coke expand its scope by nine percent in that same year. Phone calls continued to flood the company's Atlanta call center - more than 30,000 in the week after the relaunch - but now they were in praise of Coca-Cola's decision. In the end, more people rose up to have their voices heard on the quality of their southern soft drink than voted in Atlanta's 1985 mayoral race.

New Coke stuck around as the brand's gateway to a younger audience. They built up a separate marketing line for their sickly-sweet product, ditching Bill Cosby ("This zip-zoppity formula has ruined my credibility for the last tiiiime, unlike the smooth taste of Jell-o pudding pops," said Cosby. Probably.) for 80s icon Max Headroom. People went nuts for the British AI character, deluging the Coca-Cola call center with more calls and asking to know about his life, background, and in an especially bold show of loneliness, his marital status. The campaign was one of the most successful television ads of the decade.


"I'ma break me off a piece of that sweet robot booty." Coke drinkers, apparently.

Once the bloom came off Max's rose, the demand for New Coke died with it. The brand was repackaged as "Coke II" in 1992 and, like most unnecessary sequels, faded away with little fanfare. The formula was officially lowered into its grave in 2002, allowing the original formula to remove the "Classic" from its title a mere 24 years later.

New Coke inadvertently led to a 14 percent sales spike for its main competitor, but the reintroduction of The Real Thing (TM) cut off Pepsi's ascent at the cola stratosphere. While it looked like Coca-Cola was set to learn an expensive lesson about brand loyalty, their return to the formula that had worked for nearly 100 years prior was enough to jumpstart the company and give them the sales spike they needed to hold off Pepsi's charge. The whole thing became a bizarre example of backdoor marketing, leading some researchers to believe that New Coke had been an inside job to prop up the Classic soft drink the whole time. Coke's response?

Some critics will say Coca-Cola made a marketing mistake. Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart.

- Donald Keough, Coca-Cola Executive.

It was a good, self-effacing quote that glossed over the ridiculous highs and lows that came with having the gall to tweak America's favorite soft drink. That decision was so powerful that Coca-Cola expanded its empire just by bringing its old formula back to stores. People hated New Coke so much that just the idea of normalcy was enough to affirm Coke Classic's status as America's #1 soft drink and cut off Pepsi's ascension to the top spot. And it's been that way, with few exceptions, ever since.

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