The story of New Coke remains influential as a cautionary tale against tampering with a well-established and successful brand.
Didn't need fixing.
What happens when you allow new-age marketing gurus to 'improve' a market-leading proposition?
In April 1985, the Coca-Cola Company introduced a new formula for its Coca-Cola soda, known informally as New Coke. It was renamed Coke II in 1992, and was discontinued in July 2002.
The company reintroduced the original Coke formula within three months, rebranded "Coca-Cola Classic", resulting in a significant sales boost; this led to speculation that the New Coke formula had been a marketing ploy to stimulate sales of the original Coca-Cola, which the company has denied. The story of New Coke remains influential as a cautionary tale against tampering with a well-established and successful brand.
Though New Coke was accepted by many Coca-Cola drinkers, many more resented the change, as had happened in the focus groups. Many critics were from the southern US states, some of whom considered Coca-Cola part of their regional identity; some viewed the change through the prism of the Civil War as a surrender to the "Yankees":149–151 as Pepsi, the company's archrival, is based in Purchase, New York.
In a Chicago Tribune story about reaction in the South, a professor at the University of Mississippi observed that "changing Coca-Cola is an intrusion on tradition" and thus would not be well-received in that region. An Alabama resident wondered why the company had introduced the new flavor in New York; elsewhere in the state an Anniston Star columnist, noting Goizueta's Cuban origins, insinuated that the flavor change was a Communist plot. The Atlanta Journal-Constitution found a majority of patrons at The Varsity, a popular local restaurant in that city, favored the old formula. "Why didn't they test anybody here?" the co-owner asked.
The company received over 40,000 calls and letters expressing anger or disappointment,:119 including one letter, delivered to Goizueta, addressed to "Chief Dodo, The Coca-Cola Company". Another letter asked for his autograph, as the signature of "one of the dumbest executives in American business history" would likely become valuable in the future. The company hotline, 1-800-GET-COKE, received over 1,500 calls a day compared to around 400 before the change. A psychiatrist whom Coke had hired to listen in on calls told executives that some people sounded as if they were discussing the death of a family member.:163
There were critics from outside the region. Tribune columnist Bob Greene wrote some widely reprinted pieces ridiculing the new flavor and expressing anger at Coke's executives for having changed it. Comedians and talk show hosts, including Johnny Carson and David Letterman, made regular jokes mocking the switch. Ads for New Coke were booed heavily when they appeared on the scoreboard at the Houston Astrodome. Even Fidel Castro, a longtime Coca-Cola drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence.:362Goizueta's father expressed similar misgivings to his son, who later recalled that it was the only time his father had agreed with Castro, whose rule he had fled Cuba to avoid.:118
Gay Mullins, a Seattle retiree looking to start a public relations firm with $120,000 of borrowed money, formed the Old Cola Drinkers of America on May 28 to lobby Coca-Cola to either reintroduce the old formula or sell it to someone else. His organization eventually received over 60,000 phone calls. He also filed a class action lawsuit against the company (which was quickly dismissed by a judge who said he preferred the taste of Pepsi), while nevertheless expressing interest in securing The Coca-Cola Company as a client of his new firm should it reintroduce the old formula.:160 In two informal blind taste tests, Mullins either failed to distinguish New Coke from old or expressed a preference for New Coke.:162
Despite ongoing resistance in the South, New Coke continued to do well in the rest of the country.:149–151 But executives were uncertain of how international markets would react. Executives met with international Coke bottlers in Monaco; to their surprise, the bottlers were not interested in selling New Coke. Zyman also heard doubts and skepticism from his relatives in Mexico, where New Coke was scheduled to be introduced later that summer, when he went there on vacation.
Goizueta stated that Coca-Cola employees who liked New Coke felt unable to speak up due to peer pressure, as had happened in the focus groups. Donald Keough, the Coca-Cola president and chief operating officer at the time, reported overhearing someone say at his country club that they liked New Coke, but they would be "damned if I'll let Coca-Cola know that".:154