New Coke

this is carbonated brown sugar water and this is coca-cola to an impartial observer these two products may seem identical but in the world of business this little red can makes all the difference it's a name so gargantuan that even mentioning it feels redundant their logo is about as recognizable as the sun the moon and the stars across the history of human commerce no other company even comes close to their longevity and scope their product is available in so many markets that is far easier to list the places that don't sell it the coke empire has penetrated all corners of the earth and even a little bit beyond that they are the envy of the business world architects of the single most valuable brand that society has ever known when running a company it's easy to believe that branding is everything take away this red and white label and what exactly do you have left it's tempting to consider whether you could sell someone anything as long as it's behind those same familiar colors they know and love 40 years ago coca-cola was thinking the very same thing and nearly paid the ultimate price [Music] in my last video i talked about mac tonight the most successful ad campaign that mcdonald's ever ran the character was a spiritual successor to mac's headroom a memorable mascot for coca-cola which showed up on television at around the same time max headroom was truly a bizarre character but even more bizarre were the series of events which led to his adoption it's the 1980s and coca-cola is quickly approaching its 100th year as a business the company brass aren't celebrating however as for the first time that nearly anyone can remember coke is in danger of losing its title as america's favorite soft drink bitter rival pepsi cola has spent the past several decades slowly chipping away at coke's dominant market share of the beverage industry by 1985 pepsi was on the verge of the unthinkable overtaking coke as the leading cola brand the consumer market on which coke had built their empire was rapidly changing the health risks of soda were starting to be scrutinized and aging customers had begun switching to low calorie options like diet colas this demographic shift meant that future sales of coke's flagship product would have to rely on the younger generation a generation who tended to prefer pepsi by the 80s pepsi had already started out selling coke in supermarkets with coke hanging on to the overall lead through restaurants and vending machines if the market trends continued that lead wouldn't last much longer however as the old masters of the industry coke wasn't going down without a fight that fight would come from their new chairman roberto goezueta [Music] although he took over the company reigns at a very troublesome time the cuban-born magnate was no stranger to trouble in the 1950s shortly after getting promoted to head of coke's havana bottling plan goyzueta defected to the united states in the wake of fidel castro's communist revolution over the next 30 years he methodically worked his way up the company ladder until 1980 when he was finally promoted to the most influential seed in the beverage industry mr gozueta had quite the origin story but a necessary one for understanding his mentality towards change for decades coca-cola had marketed their product on tradition and permanence they had built a mythical aura around their elusive secret formula the very backbone of the company's monumental success the formula's lineage could be traced all the way back to its inventor john pemberton who then sold it to company founder asa kandler within a decade the koch formula was selling in every american state becoming the eminent national beverage by the turn of the 20th century not long afterward company president robert woodruff would extend the taste of coke to the rest of the world ushering in the most dominant period in company history by 1948 coke controlled an estimated 60 percent market share of the beverage industry distributing their iconic product on a global scale millions of customers across hundreds of countries all enjoying the same formula that had remained virtually unchanged for nearly a century it was coca-cola's golden goose the real thing altering it would be like rewriting the bible and that's how the company thought until roberto goyzueta became chairman by 1984 the company's mighty sixty percent market share had shrunk to just over twenty percent decades of complacency had allowed coke's competition to get back in the race and gosuetta was poised to put a stop to it after becoming chairman he boldly announced that there would be no more sacred cows in the company philosophy in the next few years he followed through on that claim by introducing two landmark products diet coke and cherry coke it was the first time the company had debuted any new product under the koch name while both options proved to be quite popular they only sought to further compete with the company's flagship product which was still losing ground to pepsi carrying the pride of one of america's most revered institutions coke was left with no choice in a time of cold war tensions roberto guizueta had to resort to the nuclear option [Music] is [Music] a major factor behind coke's declining market share was an ad campaign known as the pepsi challenge a blind taste test between the two colas that appeared to show an overall preference for the sweeter flavor of pepsi while not exactly scientific the campaign was undoubtedly successful at persuading many consumers to switch to the blue brand this led coke to conclude that the only way to stop pepsi was to beat them at their own game it was then when coke's senior executives commissioned a secret assignment known as project kansas where company scientists were tasked with concocting a superior formula soon enough they had synthesized the ultimate flavor one that could consistently beat both pepsi and the original coke in a taste test with a potential new juggernaut on their hands the company was now faced with a tough decision they could release the new drink as a standalone product and risk further diluting the already crowded coke lineup or they could do the unthinkable and replace the cornerstone of their entire brand ultimately the choice was up to roberto goizuetta who would look to his past for guidance years earlier when he was in charge of caribbean distribution boizueta had successfully boosted sales by slightly tweaking the coke formula he had already once committed the cardinal sin but perhaps he saw it as a virtue for goizuetta the choice was clear coca-cola the product that he had sold for his entire adult life was on the way out and so the coca-cola company was set to make the single ballsiest move in the entire history of their business replacing the very thing from which they were named as the story goes shortly before the launch roberto goezueta sought out the blessing of his predecessor robert woodruff the man who had built coke into the behemoth that it was no one knows for sure what woodruff really thought about the decision because he wouldn't live to see it happen in march 1985 coca-cola's most legendary executive passed away at the age of 95. one month later the company launched new coke the events that followed were not nearly as sweet as they had hoped coca-cola is a pretty big company buying one of their products really isn't going to matter one way or the other where your purchase can matter is through a business like bespoke post they're a subscription box service that helps out small brands from all across america each month they offer a variety of premium goods ranging from outdoor homeware clothing and more just fill out the online quiz and discover which of these exciting new products may be right for you previously they've helped me accomplish my dream of climbing the tallest mountain in florida thanks to the spacious comfort of the weekender travel bag i was able to conquer the entire 15 feet of elevation now they've agreed to sponsor my new dream of dominating the beverage industry luckily for me bespoke offers a variety of liquid refreshment options and unlike other subscription services you don't have to worry about your order falling flat bespoke makes sure you get the real thing each month you can preview your box and if you don't like what you see you can either swap it with something else or skip the month entirely for no charge for my brewing purposes i used the cast box to help me reach the bottom of the barrel in nutritional value now it's just a matter of adding my proprietary secret ingredients and voila it's my sugary addictive drink of the future i think i'll call it amp energy so visit bespokepost.com mplemon and use code emplemon at checkout for 20 off your first box and get started on creating your own secret formula oh and no need to worry about amp energy i'm sure that this fan favorite flavor isn't going away anytime soon simply stated my friends we have a new formula for coke well the real thing is in for a real change these days coca-cola is altering its year 99-year-old secret recipe on april 23 1985 new coke was rolled out nationwide over the next two weeks the remaining supply of the original formula would be phased out of supermarkets and restaurants the change was paired with an immediate new marketing campaign from company spokesman bill cosby initial sales of the product appeared promising early data from select markets were in line with projections roberto goizuetta confidently stood by his new product already touting his decision as a success the celebration was a tad premature however as trouble was brewing beneath coke's triumphant hubris soon afterward the company would find themselves struggling to stay afloat in a tidal wave of backlash one that spawned right in their own backyard [Music] across its entire operational history coca-cola has been headquartered in or near atlanta georgia the heart of the american south it's a part of the country which prides itself on a distinct regional identity one that often runs contrary to the rest of the us for generations many southerners considered coca-cola as hallowed as barbecue and college football it is their bona fide beverage of choice so much so that to this very day many southerners still use the word coke to refer to all soft drinks for as long as they've been in business coca-cola has relied on the south as a sales stronghold the fierce brand loyalty of the region may have led to complacency among koch leadership who developed an expectation that southern customers would welcome any change with open arms following the release of new coke this assumption would be proven dead wrong shortly after the switch the prevailing sentiment in the south was one of abject betrayal for many it represented yet another pillar of southern tradition that had been surrendered to the yankees announcing the product smack dab in the middle of new york city certainly didn't help this perception with the change coke had effectively alienated their most die-hard supporters emotions among the former faithful ranged from indignant to irate more than forty thousand letters of protest quickly piled up in coca-cola's office mailbox the coke hotline was inundated with thousands of distraught callers per day a company hired psychiatrists who listened in to some of the messages observed some customers acting as if they had lost a family member needless to say the reaction was much more severe than what was anticipated questions immediately loomed as to why the company didn't bother to run more tests in their home market what little testing coke did do in the south revealed a narrow preference for the new formula company leadership saw this slight majority as justification for the change what they failed to consider however were the 10 percent of respondents who were vehemently against it in a controlled survey people can't influence each other's opinions but in the real world it's not that simple while most people were ambivalent about new coke those who disliked it really disliked it this vocal minority would end up tarnishing the new formula in the eyes of the entire general public even if the average consumer didn't personally mine the switch they likely knew someone who did this common circumstance led to frequent cases where drinking new coke could potentially place someone in an awkward social situation for many it was simply easier to avoid judgment and order something else the influence of peer pressure would start to significantly impact sales as consumers were now hesitant to embrace a product which so many found undesirable all of a sudden coke was facing a major problem one that extended far beyond the south people from all across the country were starting to get the impression that for the first time anyone could remember a coca-cola product had missed the mark new coke and the swelling controversy behind it had become a national fascination there's a saying in business that all publicity is good publicity but for coke's new formula it was simply not the case is coke nervous not at all we've never had more fun in our life we this wasn't a frivolous decision it's something that we have worked on john over the last four years in the weeks after the debut new coke had become easy fodder for late night comedians and bored journalists the media kept reporting on eccentric stories about just how far certain people had gone to express their displeasure towards the switch there was the story of dan lok an avid coke drinker from san antonio who was apparently so mortified by the new coke announcement that he immediately went out and stockpiled 110 cases of the original formula speaking of stockpiles a few quick thinking opportunists would use the hysteria to their advantage a beverly hills man named dennis overstreet bought 500 cases of the old formula for resale at his wine business after one month he had customers lining up around the block trying to scoop up the last of his supply overstreet sold them the old cases for more than double what he paid for them the newfound scarcity of the old formula led many to scour some of the most rural areas for any remaining product when america's domestic supply was completely exhausted a few loyalists resorted to smuggling in the old formula from foreign countries who had not yet made the switch unfortunately other forms of protest weren't so benign one story out of marietta georgia featured a woman accosting a coke delivery man with an umbrella while shouting about how they had ruined the flavor but by far the king of new coke hostility was a seattle man by the name of gay mullins who would use a hundred thousand dollars of his own money to found a new organization for enemies of the new formula under mullen's leadership the old cola drinkers of america would declare war against new coke his battle tactics included selling anti-new coke merchandise spamming the hotline with complaints and organizing mass protests which dumped gallons of new coke into the local sewer at one point mullins even attempted to file a class action lawsuit against the soda giant but it was quickly dismissed the constant hijinks would attract a ton of media attention to the movement helping to grow mullins army to as much as a hundred thousand strong [Music] while acts of descent were small in scope and petty in nature their influence was tremendous together these minor demonstrations effectively counteracted millions of dollars of coca-cola marketing for as much as coke tried to salvage the image of their new product the american public was sticking to their own narrative it was only a matter of time before everyone saw new coke as the most despised beverage in the nation to make matters even worse new coke had crossed the threshold where it was simply fun to hate during a baseball game at houston's astrodome the crowd in attendance would infamously erupt in booze any time a new coke had flashed on the jumbotron by this point the backlash had far exceeded just a few oddballs it now resembled the full-fledged cultural event part of the morbid curiosity that attracted people to the controversy was tied up in the novelty of seeing such a powerful company struggle coca-cola was supposed to be the shining example of american excellence they almost never slipped up so when they did people made sure to let them know about it lots of people who didn't even necessarily care about the product found entertainment value in rallying against a goliath corporation who had fallen a bit too far out of touch for many new coke became an issue of patriotism with one alabama reporter even insinuating that the whole idea was a communist plot to destroy a champion of american ingenuity this theory wouldn't quite hold up after fidel castro a longtime coke drinker published his own comments bashing the new formula ironically castro had arguably set off this entire series of events in the first place by launching roberto goyzueta on his journey to becoming the head of coke after watching his bold decision catastrophically backfire goizweta's ultimate humiliation would come from the words of his father who told him that the release of new coke was the only time he ever agreed with castro [Music] in the first month after release coke's management remained committed to their product and tried to weather the storm but by the end of may the situation was quickly becoming untenable first they said they were the real thing then they said they were it then kablooey they changed so now i'm going to try my first pepsi the company's strategy to poach business away from pepsi was backfiring spectacularly shortly after new coke hit store shelves pepsi saw 14 sales increase the biggest in their entire history in mid-june when soft drink sales typically rise new coke sales remain flat internally coca-cola's officials were starting to panic amid complaints over the flavor of their new product the company would quietly alter the formula yet again this time adjusting its acidity it was clear that coke's leadership were losing faith in their vision a few executives had already begun suggesting a return to the old formula the last hope for new coke was the product catching on in foreign markets but after seeing the fiasco taking place in the us coke's international distributors wanted no part of it domestically the company's own bottling partners were on the brink of revolt new coke was now threatening to dismantle the very structure of their business with no other options the company swallowed their pride and submitted to the will of the people but one of us looked at the other and said what are we doing what are we doing here in the latest battle of the cola wars coke says it's bringing back its old formula within the next several weeks the original taste which many people in the country apparently missed will be available again well we read and we listened and you know the rest they're both yours the new taste of coke and coca-cola classic your right of choice is back on july 11 1985 coca-cola announced the return of the original formula ending the new coke experiment after just 79 days the new formula would continue to be sold as simply coke taking a back seat to the rightful flagship product now called coca-cola classic following the controversy long-time spokesman bill cosby would part ways with the company claiming that promoting new coke had hurt his credibility this left coke with a vacancy in their marketing department which would soon be filled by the aforementioned max headroom despite the very entertaining ad campaign new koch's reputation could not be salvaged by the end of the 80s its sales had dwindled to just a few percent of the market before the company decided to shelve it in 1992 they attempted to reintroduce the new formula as coke 2 which went about as well as you may have imagined after a few years the product would be mostly discontinued once more only sticking around in a few select markets around the country roberto goyzueta the mastermind behind it all continued to swear by his creation he personally drank the product until his death in 1997 although he oversaw one of the biggest blunders in company history his tenure was still considered a success new coke was expected to revive the coca-cola brand and in a totally unorthodox way it did just that by making people realize just how much they enjoyed the original formula the return of coke classic led to nationwide euphoria sales figures not only rebounded but went on to surpass what the brand had been doing prior to the switch in just six months coca-cola was selling more than twice as fast as pepsi solidifying their place as the top soda company in the world a position they continued to hold to this day somehow the biggest failure in industry history had directly contributed to its biggest success a story so perfect that it led many to wonder whether it was planned all along the incident sparked a variety of other conspiracies as to the company's true intentions with the new formula some speculated that the change was response to the reagan administration's war on drugs with coke having to phase out the last remnants of the coca plant from which they're named whether or not this was the case remains dubious but a far more likely explanation had to do with the company shifting from cane sugar to the far cheaper alternative of high fructose corn syrup strangely enough coke classic wasn't exactly the same as classic coke the returning formula had entirely switched to using corn syrup as a sweetener gay mullins who received the very first can of coke classic reported feeling sick after drinking it many other astute consumers had their suspicions about the apparent bait and switch but for the vast majority it simply didn't matter they had complained and coke had listened which at the end of the day is all anyone really wanted in 2009 coca-cola officially dropped the word classic from their packaging effectively erasing the last trace of new coke's existence the company was surely eager to move on from such an embarrassing chapter of their history since then the debacle has mostly faded away into a distant memory i was born far too late to experience the summer of new coke the stories i heard felt like something of an urban legend a forbidden elixir which caused so much heartache that it was practically banished from public consumption an artifact so unwanted that it became unobtainable i've spent the past month trying to study it and after examining just about every aspect of the stuff i was still missing one crucial detail for as much research i've done the literature the footage and the data don't tell the full story after dedicating so much effort trying to understand new coke the only thing left to do was taste it how do you even drink that because it's delicious what in 2019 new coke experienced a brief revival after being featured on the hit netflix series stranger things as part of a promotional stunt coca-cola would release a limited run of the 1985 formula only 500 000 cans were distributed with a few winding up for resale on ebay so i picked up a case and for the first time in my life tried the flavor that whipped an entire nation into a frenzy and to be perfectly honest it was kind of hard to taste the difference it's probably because i don't drink soda often or that i hadn't tasted a coke in a while but i could barely tell the two drinks apart funnily enough even a guy like gay mullins new coke's most art and critic couldn't tell either after finally experiencing the world's most infamous beverage for myself i couldn't help but speculate about a pretty absurd thought does anyone actually know what coca-cola tastes like it seems like such a preposterous thing to suggest but research tells us that most people don't unlike what the marketing may tell you independent taste tests have consistently shown that the average person can't tell the difference between coke and pepsi for most of us taste is just not our strong suit food marketing professor joel dubo found that incremental adjustments to soft drink flavor tend to go unnoticed by consumers meaning that new coke could have theoretically succeeded had it been gradually consolidated with the old formula this is especially interesting since many people today believe that new coke failed because it was a bad product but in my personal assessment that's simply not the case in fact after going back and really comparing the two drinks i actually preferred the flavor of the new formula it was good enough to where i wouldn't mind seeing it return as a permanent option the product itself was fine and had it been executed a little differently it could have been just as successful as any other coke flavor the problem with new coke had to do almost entirely with how it was presented to the public coke may have envisioned the product as the ultimate answer to the pepsi challenge but they only ended up challenging themselves the very idea of replacing the most legendary consumer product in history was just too brazen for the public to accept new coke was unknowingly pitted against 99 years of marketing genius and in hindsight it's unsurprising to see which side prevailed at the end of the day all the research focus groups and taste tests were irrelevant new coke never stood a chance for the simple reason that it wasn't the real thing it wasn't coca-cola but what is coca-cola really is it carbonated sugar water is it 19th century headache tonic i've got a feeling that for most people coke isn't even supposed to taste good all it has to do is taste how they remember there's something to be said about a product that has lasted longer than virtually any other one that persists unchanging from generation to generation it's the comforting assurance that no matter how different the world becomes there will be at least one thing that stays the same that is the essence of the real thing and no matter how good new coke tasted it was no match for just how much that old formula meant to so many people in consumer society people don't have much decades of marketing have all but replaced sincere human interaction with a superficial facade of products take away those products and you erase the soul of modern man when it was all said and done coca-cola and the entire business world learned a valuable lesson if you have a formula that's worked for almost a century it's probably best to stick with it [Music] this is max henry max he sees us where there's a wave there's a cook i like him join the club you know what more people prefer the new taste of coke over pepsi let's take him for good idea drinkers now is your chance become a cocologist [Applause]

Channel: EmpLemon

Views: 3,654,299

Keywords: New Coke, Coca-Cola, Pepsi, Soft Drink, Soda, Business, Marketing

Id: PUKfmMH157U

Length: 30min 6sec (1806 seconds)

Published: Sat Apr 23 2022