New Coke: Marketing Failure or Marketing Genius?

Origins and addictive ingredients

Coca-Cola has been a staple of American life for over 130 years. Created in 1886 by John Pemberton with a mixture of coca leaves and kola nuts. And yes, cocaine was an original ingredient. Cocaine was derived from the coca leaf and caffeine came from the kola nuts, leading to the name Coca-Cola.

The original formula called for over 9mg of cocaine, about a tenth of a “normal” dose. (drugs are bad, Just Say NO!) The drink was sold as a temperance (non-alcoholic) drink and as a medicine to cure morphine addiction, indigestion and headaches.

In 1911 Coca-Cola was sued by the U.S. Government to remove all caffeine from the drink as they believed caffeine was toxic. The lawsuit reached the Supreme Court who ruled against Coca-Cola and sent it back to the lower courts. Coca-Cola decided to avoid any further legal battles and reduced the amount of caffeine. Oddly, no one was concerned with the amount of cocaine in the drink, only the caffeine… Cocaine was completely removed from the formula by 1929.

War Time Boom

As America entered World War II Coca-Cola was looking for a way to avoid the sugar rationing put on all companies and citizens. The sugar rations were causing business to fail as they could no longer produce their products and Coca-Cola wasn’t immune to the ration, yet. Coca-Cola president Robert Woodruff partnered with the U.S. Government and President Roosevelt to distribute Coca-Cola to every American solider no matter where they were in the world.

Roosevelt saw it as a good morale boost for the troops and gave Coca-Cola an exemption to the sugar ration. By 1943 with the help of General Eisenhower Coca-Cola built 64 plants across Europe and the Pacific.

During the inflationary period of World War II Coca-Cola made a pledge to the American people and soldiers. Every bottle of Coca-Cola would cost 5 cents, no matter where it was sold. While other companies had to raise prices, Coca-Cola kept prices low and won the hearts and pocketbooks of the consumer.

According to Coca-Cola, during World War II military personnel consumed over five billion, with a B, bottles of Coke. Coca-Cola became the symbol of America and freedom around the globe.

Did You Know?

The Nazi controlled German Coca-Cola plant couldn’t get the Coca-Cola syrup due to trade embargoes. They developed a new pop using locally sourced products. The new pop was (and is) named Fanta.

Post War Dominance

Coca-Cola continued to dominate the soda market throughout the 1950s and 60s holding a 60% market share. In the 1970s they created iconic ads that are still popular today. “I’d Like to Buy the World a Coke” brought the world together in 1971. The “Coke Adds Life” campaign lead directly to the highly successful “Have A Coke and A Smile” campaign. Who can forget the great Mean Jo Greene Coke ad.

Cola Wars

In the mid-70s Pepsi Cola started a marketing campaign to rival Coca-Cola. The “Pepsi Challenge” was a blind taste test between Pepsi and Coke and the results weren’t good for Coke. People overwhelmingly choose Pepsi over Coke.

The “Pepsi Challenge” put Coke on the defensive and they started making changes to increase sales and profits. In 1982 Coca-Cola introduced Diet Coke, which became a huge seller, in 1983 Coca-Cola introduced caffeine-free versions of Coke and Diet Coke. Also in 1982 Coca-Cola introduced Cherry Coke at the 1982 World’s Fair in Knoxville, Tennessee. Around the same time they switched to using high fructose corn syrup instead of sugar to reduce costs.

While Coca-Cola was seeing an increase in sales with the new products, by 1983 their market share had dropped to 23%, a 37% drop from the end of World War II. Pepsi was outselling Coca-Cola in grocery stores while Coke maintained a dominance in vending machines and fast food, thanks to contract with McDonald’s.

The “Pepsi Challenge” was taking it’s toll but CEO Roberto Goizueta had one more idea to revitalize the Coca-Cola brand.

Project Kansas

Senior executives at Coca-Cola commissioned a secret project, code-named “Project Kansas” to create a new flavor for Coke. Coca-Cola conducted their own “Pepsi Challenge” and verified Pepsi won the blind taste test by a good margin.

Coca-Cola came up with a new flavor that was sweeter than the old and matched what people liked in the blind taste test. There was discussions to sell the new flavor as a separate product but that idea was quickly rejected.

Goizueta was in favor of the new flavor insisting the change be made public and the cans would have a “New” label on them. Goizueta visited Woodruff, the man who grew Coca-Cola into an international brand during World War II and claimed Woodruff gave his blessing for the new flavor. Close friends and colleagues of Goizueta doubt the blessing was given. Woodruff died in March 1, one month before the launch of New Coke.

New Coke or No Coke

On 23 April 1985 Coca-Cola CEO Roberto Goizueta held a press conference along with executive Don Keough at Lincoln Center to introduce New Coke. It was met with speculation and wasn’t a successful launch. Reporters, some planted by Pepsi, asked hard questions putting Goizueta on the defensive.

The launch of New Coke was almost an instant failure. While sales rose briefly as customers tried the new flavor. Once it was learned the old flavor would no longer be available the backlash was quick and severe.

Coca-Cola received over 40,000 calls and letters from irate customers. One letter was addressed to “Chief Dodo.” Some called it a Communist plot because of Goizueta’s Cuban heritage. It doesn’t appear to be a communist plot because Fidel Castro, the leader of Cuba ridiculed the change. Even Goizueta’s father disapproved of the change.

Johnny Carson and David Letterman made nightly jokes about New Coke and Coca-Cola executives. Newspaper columnists from coast to coast derided the new flavor and the executives. When New Coke ads played in sporting venues it was booed by fans.

Gay Mullins from Seattle, Washington formed the Old Cola Drinkers of America and lobbied Coca-Cola to bring back the old flavor or sell it to someone else. He also filed a class action lawsuit against Coca-Cola. The lawsuit was dismissed.

Public protests and boycotts were widespread. Coca-Cola bottlers were also facing a backlash with protest outside bottling plants and personal attacks. Inside Coca-Cola, executives and employees were at odds, some in favor of the change while others wanted to return to the old flavor.

The Classic

Amid all the backlash Coca-Cola saw the error of their ways. On 11 July Coca-Cola executives called a press conference and announced they would be bringing back the original flavor. New Coke made it 79 days before it was pushed aside for the original Coke, now called Coca-Cola Classic.

“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.” ~Don Keough

Sales of Coca-Cola skyrocketed and Coke outsold Pepsi by a 2 to 1 margin. Coca-Cola Classic out sold Pepsi and New Coke combined.

We’re Not That Smart

Was New Coke a giant conspiracy? A bait and switch to coverup something? There are a few prevailing theories on the switch to New Coke.

The first is simple, make a new product everyone hates, customers demand the old product which gets reintroduced and sales skyrocket. Responding to the theory Dan Keough said, “We’re not that dumb, and we’re not that smart.”

Another theory is they made a sweeter Coke product to cover up the change from cane sugar to high fructose corn syrup, a cheaper product. Some claim this is the real reason for New Coke, as Coke Classic had a different taste when it was reintroduced.

One of the final theories is the flavor switch provided cover for the removal of the coca extracts. The DEA was trying to eradicate the coca plant during the Reagan Era War on Drugs. The theory was popularized in a Time magazine article and in a book on the history of Coca-Cola. The DEA has refuted all claims this theory is true.

Goodbye New Coke

New Coke was rebranded as Coke II in 1990. In July 2002 New Coke was discontinued. In August 2002 Coca-Cola announced they were downsizing the word ‘classic’ on all cans and bottles. And in 2009 Coca-Cola officially removed the word ‘classic’ from all packaging.

In 2019 New Coke was briefly reintroduced to promote Season Three of Stranger Things, which is set in 1985.

I Never Liked New Coke

I remember when New Coke was introduced. It was a major story. We talked about it at home, with friends, at school, everywhere. How could they change Coke after 100 years? World War II veterans were mad, they drank Coke while fighting the Nazis and Japanese, it was an American drink.

New Coke didn’t make it into our house, I even stopped drinking Coke altogether until Coke Classic became available. My dad was always a fan of RC Cola, when New Coke was introduced RC Cola, not Pepsi, made its way into our fridge.

When Coke Classic was reintroduced there was always an awkwardness ordering a Coke. For the first time ever you had to specify which Coke you wanted, New Coke or Coke Classic. There were some places that didn’t even carry New Coke. Our movie theater made it a point to highlight they only sold Coke Classic.

In a time when the world was embroiled in the Cold War and fighting the Communists, worried about Nuclear Armageddon and waging the War on Drugs something as simple as changing the flavor of Coke could cause such a whirlwind of controversy.

Do you remember the introduction of New Coke? Did you like New Coke? I am and always will be a Coke Classic guy. Let us know in the comments below.

You can share your thoughts on X too. The main Retro Network channel is @TRNSocial and I’m @MileHighSamurai You can also find me on Bluesky @MileHighSamurai

If you want to read about more Coca-Cola marketing failures check out Mickey’s article on the Coke MagiCan