In April of 1985, Coca Cola made the biggest mistake in the history of product marketing when it changed the top-secret recipe of Coke.
Or was it exactly the opposite, the most brilliant branding maneuver in history?
By the mid 1980’s, Coke had watched its signature product incrementally lose market share over 15 years. For its part, Pepsi, Coke’s chief competitor, had anchored its advertising around what it called the “Pepsi Challenge,” a blind taste test in which consumers were asked to identify which tasted better, Coke or Pepsi. Of course, as you’d expect, this being Pepsi’s advertising campaign, consumers disproportionately favored Pepsi in the commercials.
The problem for Coke executives is that, much to their chagrin, their research showed the same exact thing. In blind taste tests, when snap decisions were involved, people thought they liked the taste of Pepsi better and Pepsi would consistently win.
I don’t know about you, but I have yet to venture into a grocery store to see people roaming the aisles wearing blindfolds. As it turns out, taste is only one component of the purchasing decision. And brand loyalty when it comes to soda, what Steve Jobs famously called “sugar water,” is fierce.
What Coke knew in 1985, and well before that, was that Pepsi was slightly sweeter than Coke. In a blind taste test, with American palettes that crave sugar, sweeter wins. It was that simple.
So, to great fanfare, Coke made the biggest change to its secret recipe since it removed the original, medicinal ingredient of cocaine. Coke got sweeter.
There are enough urban myths surrounding this particular story that I don’t know that anyone really knows what happened. I personally favor the theory advanced by the Coke distributor who filled the soda machine at Circle Woods Pool in Fairfax, Virginia, where I lifeguarded during the summer of 1985.
What is inarguable, though, is that the reaction to “New Coke” was visceral. Coke simultaneously received a stern rebuke of its new product and the strongest possible endorsement of its brand. It was an apocalypse. There were protests and vigils. There were news stories of people buying thousands of cans of “Old Coke” to store in their basements.
By mid-summer, Coke reversed course. It began selling “Old Coke” under a new moniker, “Coca Cola Classic.” They did so with the eternal gratitude of a now deathly loyal Coca Cola customer base.
Probably 15 years later, I remember listening to a news story as Coca Cola was replacing its CEO under a cloud of controversy. The interviewer, I think it was Bob Edwards, was questioning a branding expert about Coke’s problems. “So, what’s next for Coke? Do you think they’re in real trouble?” “Nah,” said the branding expert. “You know why? Across hundreds of languages and billions of people, the most recognized word on this planet is the word ‘OK.’ The second most recognized word on the planet is ‘Coke.’”
The Coke brand would endure.
What happened in 1985? It wasn’t a mistake at all, this according to the sage Coke distributor who serviced the Coke machine at my pool. “It was all a publicity stunt,” he said. “There’s no way they could have rolled out ‘Coca Cola Classic’ three months after New Coke unless it was planned from the start. I can’t fill the machines fast enough with this stuff. People are buying more Coke than I’ve ever seen.”
Jim Cudahy, CAE, is a principal at SRD Communications in Herndon, Virginia. Jim has more than 25 years experience as an association executive and marketing and communications professional. He loves a great story. You can reach Jim at firstname.lastname@example.org.