New Coke, The Worst Corporate Idea?

by Kevin Burton

   Did you miss Bad Idea Day last week, April 23? 

   Well it wasn’t actually named, per se. But New Coke was introduced on that day, in 1985. That’s good enough for me. 

   What was the worst corporate idea of all time? Who’s to say?  But New Coke is often cited. Wise guy bloggers like me invoke the name when they want to say some idea is particularly brainless. 

   “The story of New Coke remains influential as a cautionary tale against tampering with a well-established and successful brand,” reads the New Coke Wikipedia page.

   “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,” said the Coca-Cola company, quoted on Wikipedia.

   New Coke was such a bad idea that I dismissed it from mind as soon as the old formula was reintroduced. So I was surprised to read on Wikipedia that New Coke didn’t disappear for quite a long time. 

   I either forgot or never knew most of this history:

   “By 1985, Coca-Cola had been losing market share to diet soft drinks and non-cola beverages for several years,” reads the New Coke Wikipedia page. “Blind taste tests suggested that consumers preferred the sweeter taste of rival Pepsi.”

  “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. This project was named “Project Kansas,” from a photo of Kansas journalist William Allen White drinking a Coke.”

   “The sweeter cola overwhelmingly beat both regular Coke and Pepsi in taste testssurveys, and focus groups. The South, one of Coca-Cola’s strongest and most reliable markets, narrowly preferred the new flavor.

   “New Coke was introduced on April 23, 1985. Production of the original formulation ended later that week. Coke CEO Roberto Goizueta described the new flavor as “bolder, rounder and more harmonious.”

   “Most Coke drinkers resumed buying the new Coke at much the same level as they had the old one. Surveys indicated that the majority of regular Coke drinkers liked the new flavoring.”

   “But there were critics, including many

from the southern US states. Some considered Coca-Cola part of their regional identity and viewed the change through the prism of the Civil War as a surrender to the “Yankees,” as Pepsi, the company’s archrival, is based in Purchase, New York.”

   “The company received over 40,000 calls and letters expressing anger or disappointment, including one letter, delivered to Goizueta, addressed to ‘Chief Dodo, the Coca-Cola Company.’ The company hotline, 1-800-GET-COKE, received over 1,500 calls a day compared to around 400 before the change.”

   “A psychiatrist whom 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.”

   “Comedians and talk show hosts, including Johnny Carson and David Letterman, made regular jokes mocking the switch.”

   “Roger Enrico, then director of Pepsi’s North American operations, declared a company-wide holiday and took out a full-page ad in The New York Times proclaiming that Pepsi had won the long-running “Cola Wars.” After the announcement on April 23, PepsiCo gave its employees the day off saying, ‘By today’s action, Coke has admitted that it’s not the real thing.’”

   “Some Coca-Cola executives had quietly been arguing for a reintroduction of the old formula as early as May. By mid-June, when soft drink sales usually start to rise, the numbers showed that new Coke was leveling among consumers. Some even began trying to obtain old Coke from overseas, where the new formula had not yet been introduced.”

   “Coke bottlers saw great difficulty having to promote a drink that had long been marketed as ‘The Real Thing,’ constant and unchanging, now that it had been changed.

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.’

   “On the afternoon of July 11, 1985, Coca-Cola executives announced the return of the original formula, 79 days after New Coke’s introduction. ABC News‘ Peter Jennings interrupted General Hospital with a special bulletin to share the news with viewers.  On the floor of the U.S. SenateDavid Pryor called the reintroduction ‘a meaningful moment in U.S. history.’ 

   “In the short run, the reintroduction of original Coca-Cola (branded as Coca-Cola Classic) saved Coke’s sales figures 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. ”

   “The new product continued to be marketed and sold, but the public saw little reason to embrace a product they had firmly rejected seven years earlier. Within about a year, New Coke was largely off American shelves. In July 2002, Coca-Cola announced that New Coke would be discontinued.”

   “No one at Coca-Cola was fired for the change. 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.”

   “The Coca-Cola Company’s apparently sudden reversal on New Coke led to conspiracy theories (all denied by the company), including:

   One, “The company intentionally changed the formula, hoping consumers would be upset and demand the original formula to return, which in turn would cause sales to spike. Company president Donald Keough answered this speculation by saying ‘We’re not that dumb, and we’re not that smart.’

    Two, “The switch was planned all along to cover the change from sugar-sweetened Coke to much less expensive high-fructose corn syrup.

   Three, “It provided cover for the final removal of all coca derivatives from the product to placate the Drug Enforcement Administration.

   It seems even bad ideas create a bit of nostalgia. In 2019, Coca-Cola reintroduced New Coke in limited quantities to promote the third season of the Netflix series Stranger Things, which was set in 1985.

About 500,000 cans of New Coke were produced for the promotion, to be sold mostly online. So many people were eager to buy it that the volume of orders crashed the Coca-Cola website.

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