The Cola Wars: The Creation of the Soda Giants

New Coke: The Failure

            New Coke was the ultimate response from Coca-Cola due to Pepsi’s success with the “Pepsi Challenge.”  Coke executives decided that if people felt that Pepsi was better in taste tests, than their soda needed to change.  New Coke was a combination of changes, but the main change was in the citric acid and phosphoric acid.  One of the strangest parts of the release of New Coke was that the Coca-Cola Company aired new Bill Cosby advertisements supporting the old formula just weeks before New Coke was announced.  In April 1985, New Coke was announced to the American public.  Within hours, things began going downhill for Coca-Cola’s New Coke.
            Some of the first people to hear about Coca-Cola’s change was the Pepsi executives.  Joe McCann, the Vice President of Public Affairs for Pepsi, immediately contacted Roger Enrico to go over an attack on New Coke.  When Enrico explained that Pepsi didn’t have a plan, McCann reacted as though Enrico was crazy.  According to McCann, “Coke [wasn’t] putting out a new product; they [pulled] back the old one.”  He then told Enrico that Pepsi had “just won the Cola War!”  News of this success spread like wildfire throughout the ranks of the Pepsi elite.  Don Kendall, CEO of Pepsi at the time, immediately called Roger Enrico to find out the truth about Coke’s plans.  Kendall originally believed that Coke was changing management, which Enrico was quick to fix.  Soon after, Wayne Calloway, the President of PepsiCo, found out the news.  Both Kendall and Calloway ensured that Enrico understood that he couldn’t “let [Coke] get away with it.”  Enrico then told all of his workers to contact the media and give them the scoop on what Coca-Cola was up to before Coke announced it.  According to researcher Frederick Allen, Pepsi workers even went as far as to say that “New Coke had been made to taste more like Pepsi.”  At this point, Pepsi had no real proof that Coke had changed the taste to be Pepsi-like, but the thought stuck in reporters’ minds.  Pepsi’s fast reaction time to the announcement of New Coke allowed for them to create an ad campaign to derail any chance New Coke may have had in the market. 
            When Coca-Cola executives Roberto Goizueta, the CEO of Coke, and Donald Keough, President of Coca-Cola, gave their press conference on April 22, 1985, they experienced quite the surprise.  The press was prepared with statistics and questions to undermine the New Coke premier.  Goizueta and Keough had to fend off questions from the reporters asking if New Coke would become a failure and why Coke decided to change its strategy.  Coca-Cola attempted to convince the media that Pepsi had not truly been catching up with the Coke market, and that New Coke had not deliberately been made sweeter to copy the iconic Pepsi flavor.  The media did not buy their explanations.  However, there was more than just the media at stake.  In the attempts of Coca-Cola to up their market sales, the company had broken its “Americana” feel.
            America was not pleased with New Coke.  Even though Coca-Cola tried to make the change seem acceptable through advertisement campaigns with celebrities such as Bill Cosby, the American public believed that Coke had betrayed everything they once stood for.  The Coca-Cola headquarters in Atlanta was inundated with callers complaining about Coca-Cola.  Even those who didn’t drink Coke called over the perceived loss of Americana.  Pepsi fed off of this feeling and produced their own advertising campaign.  In one version of these ads, an older gentleman is seen complaining to his friends that “they changed my Coke.”  He was especially upset because he had “stuck with [Coke] through three wars and a couple of dust storms” and the company still had the audacity to betray him.  The gentleman and his friends then all agreed to drink Pepsi instead.  Another Pepsi ad against New Coke featured a teenage girl upset about Coca-Cola’s change in formula.  As a way of fighting with Coke, she then tries her first Pepsi which she enjoys immensely.  These advertisements imply that those who enjoyed the original Coca-Cola would enjoy Pepsi more than New Coke.  These advertisements and other anti-New Coke campaigns caused Coca-Cola to change their master plan immediately.
            New Coke only lasted a matter of months before the original formula was brought back to American shelves.  Donald Keough held another press conference on July 11, 1985, only three months after New Coke was announced.  Due to popular demand, “Coke Classic” returned to the market.  The response was immediate.  Coca-Cola customers flocked back to the brand in order to drink the original formula.  The change in market was so severe, that Coca-Cola stopped production of New Coke in the United States.  New Coke had disappeared completely from stores in the United States by the early 1990s, and from the international market by 2002.  In an attempt to finally deliver the final blow of the Cola Wars, Coca-Cola almost eliminated themselves instead of Pepsi.
            The New Coke fiasco is one of the most well-known advertising failures in modern history.  Economists use the New Coke campaign as an example for students on what happens when a campaign goes horribly wrong.  For many, New Coke is even larger than a teaching tool.  New Coke was the largest failure seen in the Cola Wars.  Coca-Cola lost part of their fan base when they forgot their Americana and nostalgic feelings.  This campaign gave Pepsi an even better chance of catching up with Coke’s market share.  One thing New Coke did accomplish was a sense of appreciation for Classic Coke.  The consumer base for Classic Coke stayed relatively stable after the New Coke debacle, which can partially be attributed to people wanting to make sure the original recipe stayed the only recipe.  In a strange way, New Coke can be attributed to helping Classic Coke’s popularity with Americans, which is perhaps what Coca-Cola hoped for all along. 

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This page references:

  1. New Coke Magazine Ad
  2. Bill Cosby New Coke Commercial 1985
  3. New Coke ad
  4. Don Keough Classic Coke Press Conference
  5. 1985 Pepsi commercial- "They changed my Coke"
  6. 1980's Pepsi Commercial on New Coke