Back in April 1985, Coca-Cola reformulated the taste of their iconic drink in an attempt to boost its then dwindling market share as customers flocked to buy the range of new diet soft drinks that had recently hit the market. Coca-Cola’s arch enemy Pepsi was also in ascendance as customers seemed to prefer the younger upstart beverage’s sweeter taste.
The American public’s hostile reaction to the change was unprecedented and Coke’s original formula was rapidly reintroduced after only 3 months.
Despite only being on shelves for a short period, the introduction of New Coke serves as a warning to companies that feel the need to tinker with a successful and well established brand.
Senior Executives at Coca-Cola commissioned a secret report that was codenamed ‘Project Kansas,’ to test and perfect a proposed new flavour for Coca-Cola through the use of taste tests, surveys and focus groups.
The new, sweeter cola repeatedly beat both normal Coke and Pepsi and the surveys were key in convincing Coke’s management to commence with a change in the soft drink’s formula to coincide with the company’s centenary celebrations.
Also considered at the time but swiftly rejected, was a proposal to make and sell New Coke as an alternative flavour variety, but the launch of Diet Coke in 1982 along with Cherry Coke’s roll out in 1985 meant it wasn’t feasible in terms of bottling and distribution. A new Coke variety if successful, could also cannibalise Coca-Cola’s sales and give away yet more ground to Pepsi if it were to compete against the original.
Positive Early Response
Early sales figures of the new version showed a positive early acceptance in the areas where it had been introduced – a reaction that had been predicted by market research. Coke’s sales were up 8% over the same period the year before and most Coke drinkers embraced the new formula in much the same way as they had the old one. Surveys suggested that a majority of people liked the new flavour and three quarters of respondents said they would buy New Coke again.
Despite being accepted by a large number of Coca-Cola drinkers, a huge number resented the change to New Coke and were vociferous in their condemnation of it. A large number of the detractors were from the Southern States of the U.S. where the drink originated and as a result they saw the company’s decision to change flavour as an affront to their regional culture and heritage.
The Coca-Cola company’s headquarters started to receive calls and letters expressing anger at the change. The company hotline, 1-800-GET-COKE was receiving over 1,500 calls a day compared to about 400 before the change. A psychiatrist that Coke had hired to listen in on calls told executives that some people sounded as if they were discussing the death of a family member.
Detractors from further afield like Chicago Tribune columnist Bob Greene, ridiculed the new flavour alongside Coke’s decision to change it. Comedians and talk show hosts also got in on the act of mocking New Coke and before long it became almost in vogue to express disdain for the soft drink variant. Even Fidel Castro who was a long time Coke drinker, contributed to the backlash by calling New Coke a sign of American capitalist decadence.
Coca-Cola announced their return to the original formula on July 11th 1985, less than 3 months after the introduction of New Coke. U.S. Senator David Pryor called the reintroduction “a meaningful moment in U.S. history,” and the company hotline received 31,600 calls in the two days after the announcement.
New Coke continued to be sold and retained the name Coca-Cola, whilst the old formula was reintroduced under the moniker, Coke Classic and later just Coke and was often referred to by members of the public as Old Coke.
Company president Donald Keough said at the time, “There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years. 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.”
Coke had spent a considerable amount of time trying to figure out where the mistake had been made. Ultimately executives concluded that the company had underestimated the public reaction of the segment of customers that would ultimately be against the switch. This fact did not emerge for several years however and in the meantime the public simply concluded that Coca-Cola had, as its President suggested, failed to consider public attachment to the idea of what Coke’s old formula represented. This rather populist version of the story ultimately served Coke’s interests however, as the whole affair did more to reposition and define Coca-Cola as a brand that embodied values that were distinct from Pepsi than any deliberate effort to do so ever could have. By allowing itself to be portrayed as a clueless and bumbling, large corporation forced to make a hasty retreat from a major change as a result of overwhelming public pressure flattered customers (as Keough put it, “We love any retreat which has us rushing towards our best customers with the product they love the most.”)
As a final thought – the fiasco led Bill Cosby to end his advertising for Coke, saying his commercials that praised the superiority of the new formula had hurt his credibility. Think about that for a minute. If Bill Cosby doesn’t want to work with you anymore because of what it will do to his reputation – then you must have done something really, REALLY bad!