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Happy 25th birthday, New Coke!

Barry McNamara
04/21/2010
Mike Connell, professor of political economy and commerce at Monmouth College, calls Coke and Pepsi “the world’s most popular products.”

So when one of those soft drink giants blunder, it’s big news, and that’s what happened 25 years ago on April 23, 1985.

The Coca-Cola Co. introduced what came to be known as “New Coke,” a reformulation of its flagship soft drink, Coca-Cola. Not only did the company introduce a new version, it also ceased production of its “original recipe.”

How did it turn out? If one Googles “New Coke,” search results include such articles as “New Coke disaster” and “New Coke failure.”

“I use it almost every semester in my ‘Introduction to Business’ class,” said Connell. “It’s an example of a company that failed to understand its own product.”

He elaborated, “For 100 years, Coca-Cola stood for tradition, loyalty, trust and solid values. They touted their product as ‘the world’s perfect beverage.’ Then they dumped on that. You can’t make perfect better. Their customers understood that better than the executives.”

The irony, said Connell, is that New Coke had performed well in blind taste tests.

“People loved it,” he said, “so it’s also an example of how bad marketing can kill a good product.”

Connell said that New Coke was partially the result of pressure that rival Pepsi had applied during the never-ending soft drink wars.

“It seems so funny now, but Pepsi had signed Michael Jackson as a spokesman after Coke had turned him down,” said Connell of the late pop music star whose popularity was off the charts at the time. “Coke wanted to get some publicity back. They were actually coming off two straight successes – buying Columbia Pictures and introducing Diet Coke.”

Although it might have won taste tests in an unmarked plastic cup, New Coke bombed when it was packaged with the Coca-Cola brand.

“They changed the formula to make it sweeter,” said Connell. “The comment at the time was, ‘If I wanted a Pepsi, I’d have bought a Pepsi.’”

Connell knows a thing or two about the latter product, as he is an avid collector of all things Pepsi.

“Pepsi has a much sweeter, more candy-like taste,” he said. “Kids like it better than Coke, which is more for an adult taste, an acquired taste.”

“Taste is a personal preference and not a matter of fact,” said MC assistant professor Brad Sturgeon, who works with soft drinks in some of his chemistry classes. “Like Professor Connell said, New Coke’s failure had everything to do with marketing.”

Sturgeon offered his chemical assessment of what might have happened 25 years ago.

“I would not be surprised to hear that the reformulation was partially due to an interest is changing some ingredient that was tied to the supply chain,” he said. “For example, many soft drinks are currently made with high-fructose corn syrup, whereas in the past they used cane sugar, which is also known as sucrose. There are chemistry reasons to not use sucrose. It is a disaccharide, which means that its chemical structure is composed of two sugars – glucose and fructose. Sucrose can be broken down to glucose and fructose, and by doing so the resulting mixture is approximately twice as sweet as the original sucrose. The choice of using one sweetener over another is a matter of flavor preferences and cost.”

Despite the public relations and sales hits that the company took in the short term, Connell said that Coca-Cola recovered “within two years … Classic Coke sales were actually higher than before it left. All vestiges of the actual New Coke product are distant memories now.”

Although the popular colas have long since returned to having different tastes, one thing they have in common in 2010 is a reduced U.S. market.

“For the first time, both companies are having problems selling to younger kids,” Connell said. “They are losing their market to sports drinks and bottled water. This is the first generation that didn’t grow up with Coke and Pepsi as their main beverages.”

The soft drink battleground has shifted to foreign fronts, said Connell, particularly China and India.