Why Coke Tried to Switch to “New Coke”

Trevor A. asks: Why did Coke try to switch to “New Coke”?

It turns out there was actually (if you squint at the problem hard enough), a semi-good reason for doing the switch.  It didn’t work out, of course… But then, it kind of did work out amazingly well at the same time, as you’ll soon see.

Now, before I get into the real reason for the switch, let me debunk the conspiracy theory- that Coca-Cola was trying to swindle people into accepting high fructose corn syrup over sugar in their drink by pulling the New Coke stunt.  The truth of the matter is that they’d already allowed bottlers to use high fructose corn syrup in Coke for about five years before they introduced New Coke (before they even thought up the idea to make a New Coke). Most made the switch pretty quickly because of the drastic cost savings.  Initially Coca-Cola allowed a 50% corn syrup substitution and by about 6 months before the introduction of New Coke,  nearly every major bottler of Coca-Cola was using 100% high fructose corn syrup, rather than sugar or a mixture of the two.  So those who claimed they could taste a difference because of the high fructose corn syrup after the return of the old Coca-Cola, actually had already been drinking it with high fructose corn syrup, in most cases long before New Coke.

Now, Coca-Cola did consider not announcing that they were switching to New Coke, with a plan to just very gradually change the flavor.  But they ended up deciding that it was too risky, because if someone noticed, it might become a huge news story and hurt sales from the bad publicity of trying to trick their customers.

So what really was the motivation for switching to New Coke? Coke had steadily been losing ground to Pepsi and by the early 1980s, taste tests done by Coca-Cola and Pepsi showed that most people tested preferred Pepsi over Coke. Further, if not for Coke’s exclusive contracts with many restaurants and vending machine vendors, Pepsi would have been drastically outselling Coke, as it was in supermarkets and other locations where people had a choice.

Coca-Cola, thus, set about changing their formula to come up with something people would prefer over the original Coke and Pepsi.  Specifically, they created New Coke based on their Diet Coke formula.  Diet Coke was extremely popular right from its debut (rocketing up to the third most popular cola after Pepsi and Coke within just a few years of its debut), even though it was a new flavor and not a drink flavor based on regular Coke, as the name seems to imply.

Thus, as taste tests showed that more people preferred the taste of Diet Coke to regular Coke, they decided to primarily just take out the artificial sweeteners in Diet Coke and substituted in high fructose corn syrup. With a few more minor modifications, they succeeded in creating a new apparently tasty drink.

This wasn’t a case of them not doing their due diligence on whether it was better than the original Coca-Cola.  They knew full well how big of a thing it would be to abandon their old formulation.  As such, they ran numerous tests which showed the vast majority of people preferred the new formulation over the old and it also beat out Pepsi by a decent margin.

What went wrong is still partially up for debate, but the heart of the issue is basically the “nostalgia” factor and that they’d spent nearly a century marketing their product as something you can’t live without, then they took it away.  People had apparently taken this message to heart. While the taste tests made New Coke look great, they never explicitly asked the question in any of their tests “Would you care if we switched in this new formulation of Coke and got rid of the old?”  They didn’t do this because they didn’t want people to know they were developing a new formulation at all. They did ask a a very similar question that subtly implied the previous question and the result should have clued them in to the dissent.  They asked tasters who had liked it, “Would you buy this [new flavor] if it were Coca-Cola?”  While the majority said yes, about 10% said no and got angry about the subtle implication of getting rid of Coke. While this is a small percentage, the problem ahead was illustrated in that these 10% were very vocal about their dissent and had a tendency to try to convince other testers that they should switch their answer to “no” too, often successfully.

This is exactly how it played out when New Coke was introduced as well.  At first, sales were up a significant amount over the previous year, even more than Coca-Cola expected; and according to surveys run by Coca-Cola, most people preferred the new flavor over the old.  Just as importantly, the majority of existing Coke drinkers continued to buy Coke at the same levels as they did before.  Further, most of those few customers they lost weren’t switching to Pepsi, they were simply just not drinking Coke anymore. Coca-Cola stock went up and things were looking really good.

But then the vocal minority started kicking up their heels- complaints trickled in and the angered Coke fans started enlisting the aid of the media; soon that trickle started to develop into a flood. One man, Gay Mullins, even started the Old Cola Drinkers of America organization to lobby for the return of the Old Coke, or at the least try to get Coca-Cola to license out the formula to someone else.  The fact that in blind taste tests Mullins himself picked New Coke over Old Coke didn’t stop him from attempting to sue Coca-Cola over the switch either, and continue his campaign.

The dissenters started convincing others, many who had never even tried New Coke decided they hated it before even tasting it, primarily because they were upset at the fact that the original Coke was no longer available. Finally, just three months after New Coke was introduced, the public outcry forced Coca-Cola to release the old formula under the name “Coca-Cola Classic”.

So why did they get rid of Coca-Cola “Classic” in the first place, rather than just introducing New Coke as a separate drink right off the bat?  There were a few reasons, but the big one was because the market for cola drinks at the time was shrinking fast and by introducing another Coke substitute (having introduced Diet Coke in 1982), they feared (rightly so) it would split the market for their product with many people who would have drank Coca-Cola Classic now drinking New Coke.  This would allow Pepsi to take the top spot by a good margin, allowing Pepsi to not only claim taste tests showed people preferred Pepsi, but also to boast about how Pepsi was the most popular soft drink in the world.  Coca-Cola was unwilling to give this marketing advantage to Pepsi, so decided to get rid of the original Coke, in favor of New Coke.  After all, every test they ran showed people preferred the new formulation anyways.  What could go wrong?

Despite this switch not working out the way they hoped, it did in the end work out amazingly well.  After this fiasco, Coca-Cola Classic, instead of continuing its steady decline, began to take back market share over both Pepsi and New Coke. This was despite the fact that when people were blind taste tested, they almost universally picked both New Coke and Pepsi as better tasting than Coca-Cola Classic. (Although, some theorize that the taste tests here are flawed because they often only gave people small sips.  Thus, the sweeter tasting Pepsi and New Coke would perform better, whereas when drunk normally, might be too sweet, and so Coca-Cola would win in these cases. Those who theorize this is the reason for Coke losing out in the taste tests tend to state that Pepsi’s steady rise before this fiasco was not due to superior taste, but from their superior marketing, particularly to youth.)

Whatever the case, while the whole thing was a fiasco that nearly sunk the company initially, within 6 months of the return of Classic Coke, Coca-Cola sales had risen at double the rate of Pepsi and it continued to climb.  Thus, the blunder ultimately was a huge part of why Coca-Cola was able to reestablish itself as the most popular cola in the world.  Sometimes doing something stupid can really pay off.

If you liked this article, you might also enjoy our new popular podcast, The BrainFood Show (iTunes, Spotify, Google Play Music, Feed), as well as:

Bonus Fact:

  • Despite New Coke sales dropping like crazy after the return of Classic Coke, when the Wall Street Journal in 1987 did yet another blind taste test of Pepsi, Classic Coke, and New Coke, with most of the participants before the test saying they preferred one or the other of Coke or Pepsi, New Coke won out as the most popular choice again.  Much like the New Coke dissenters, when the people were told they’d picked New Coke as their favorite instead of their previous stated favorites of Coke or Pepsi, rather than deciding they’d start drinking New Coke, they predominately got angry at the testers.

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  • New Coke and Pepsi made lousy mixed drinks. If there wasn’t Classic Coke I would drink beer. My favorite sensation of drinking Classic was the bite of those first couple of sips, New and Pepsi didn’t have that.

  • Paragraph 13: Was Pepsi really “sweater tasting” or was it “sweeter tasting?” The former seems gross to me.

    • Daven Hiskey

      @R: True, sweaters taste gross… all cottony… 😉 Thanks for catching that! Something like 30,000 people have read this article and you’re the first (apparently) to pick up on it. 🙂

    • Hahahahahahahahahahahahahahahahahahahahahahahaha!!!!!!!!!!!!!!!!!!!

  • I have been reading a lot on your website, including the comments, which are just as informative as the articles. Kudos!

    Although I am thoroughly annoyed and disappointed by the passive aggressive way in which you respond to criticism/corrections.

    Passive aggressiveness in my opinion is cowardly and obnoxious.

    Until I read a LOT of your responses to corrections, I genuinely thought that the editor of such a site deserved respect.

    You should either learn to truly accept valid criticism, or have the gall to stick to your stand.
    Passive aggressiveness deserves no respect.

  • Despite the disclosure of the high fructose being switched before they changed the formula. I’m not buying it. I think the NEW COKE was just to throw us off the scent of them changing Sugar to H.F.C.S. in real coke. I was 12, I drank enough Coke to know it tasted different when it was Coke Classic. Took my years to get used to the taste.

    • This is when you know you just don’t care about being taken seriously. You KNOW you are wrong. Proven with facts. But you don’t care. You choose to be wrong then to go against your pathetic conspiracy theories.

    • Bingo, right on the money.

  • Classic Coke is nasty. It tastes too much of cloves. I much prefered the New Coke, as did a lot of other people. But I was a Pepsi drinker anyway.

    I don’t drink any of that stuff anymore unless I see a Throwback Pepsi with real sugar. HFCS morabalizes into fat, while sucrose is 50% glucose and doesn’t.

    • 15 minutes after consuming it, your body breaks down HFCS into EXACTLY the same thing as sugar. Sorry…but random anti-everything internet sites don’t trump actual science.

  • This overlooks something about “blind taste tests” that was clear during the Pepsi Challenge. Which is that people taking surveys tend to want to please the survey takers. So…people who knew they were taking the Pepsi Challenge would pick Pepsi, regardless of what they actually preferred. (After all, anyone who claims that they can’t tell the difference between the two is either lying or has no taste buds.) That is why during the Pepsi Challenge, there were places that did unofficial “Coke Challenge” tests using the same exact method as Pepsi, only telling the people they were doing this survey for Coke. And lo and behold, Coke was picked overwhelmingly over Pepsi. Not to mention the fact that if you were a Pepsi fan, you were more likely to go up to a Pepsi Challenge booth than if you were a Coke fan. So the sample was not a statistically random sample. Or the obvious practice that BOTH did which was to make sure THEIR brand was nice and cold while the other was just cold enough to not be obvious. (Some of the ones I took are state fairs, etc. were not even that. The Pepsi was ice cold while the Coke was clearly not refrigerated at all.)

    That is what was happening with the tests with New Coke. People may not have known what hte New Coke sample was..but they knew the other one was Coke, and they knew that the test was trying to get more poeple to vote for the other one. So that is what they did.

  • I could never figure out why an enterprising law firm didn’t sue Coca-Cola for claiming “Coke Classic” was the “original” formula.

    The true “original” formula contained cocaine. For the last century or so, there’s (supposedly) been a coca-leaf extract (other than cocaine) in the formula, but no actual cocaine. Therefore, not the ORIGINAL formula.

    There was a time when my friends and I could tell which of the three bottling plants in the region had produced the Coca-Cola we were drinking. The obvious one was from a city where the water tasted terrible. The Coca-Cola produced with that water tasted similarly bad. Coca-Cola has shut-down these smaller “local” bottling plants in favor of huge, but far fewer, bottlers.

    What I like about Coca-Cola is that the flavor is much more complex than Pepsi. Pepsi is dark-colored sugar water. Coke is dark-colored sugar water with a blend of spices. Given a choice, I’d be drinking Royal Crown in preference to either Coke or Pepsi. RC is–for lack of better description–“stronger” than Coke, while not being quite as “spiced”. I might actually prefer the taste of Coke (slightly), but RC doesn’t saturate-advertise, and I respect and appreciate that.

    Unfortunately, RC is hard to come by where I live.

    • Blah, blah, blah…I got through two sentences of your verbose and boring post and gave up…**YAWN**.

      • How is it my fault that you don’t have adequate comprehension skills, or an appropriate attention span?

        • You’re so right…blame it on my ADHD, social anxiety disorder, poor schooling and impatience. Then again, the content I’m trying to read must actually contain an element of relevance and interest in order for me to get through it by keeping my attention. For the most part, drivel doesn’t do it. Happy New Year, and make 2017 the year your writing actually contributes to the conversation!

        • I absolutely agree with your post because “Coke Classic” was not the “original” formula at all. This is a very important distinction.

          The other person who responded to you is probably a loyal Coca-Cola sheep who became angry at the researchers for saying they preferred the taste of New Coke.

  • I grew up back in the 60’s and 70’s and drank the real deal. There was nothing like going to the corner store on a hot day and getting an ice cold cola from the vending machine for 10 cents. My favorite was RC cola. But I drank all of them also Dr pepper was nice for a change too. We have totally stopped drinking any soda any more, because it all taste like syrup and it goes flat too fast. The new Dr Pepper is horrid. It’s hard to believe that they sell that stuff with a straight face.

  • I grew up drinking both Coke and Pepsi in the 1970’s and 1980’s, but I have always preferred Coke.

    Very few people that I have ever known ever thought that Pepsi ever tasted better than Coke.

    While diet Coke tastes better than Diet Pepsi, Diet Coke never tasted anywhere nearly as good as regular Coke. I’ve never heard anyone say that Diet Coke was a preferred taste over regular Coke. And I have a very hard time believing that anyone did ever think that Diet Coke tasted better than regular Coke.

    By the way, no-one should ever drink diet sodas, they are more or less poison to the human body. although, obviously regular soda is almost as bad for your health.

    Coke new back in the 80’s that if they temporarily changed the formula of their regular Coke, that they would sell a ton of it in the beginning to people who’d be curious about its taste. And that they would then increase sales again when they switched back to Classic Coke.

    The change was above all a marketing ploy to increase sales through trickery.

  • Alexander Pendjurin

    This piece is as useless as the book someone wrote about New Coke and probably for the same reason … to perpetuate a myth. I’d like to see some documentation for the claims you make in the 2nd paragraph. I also dispute this sentence “So those who claimed they could taste a difference because of the high fructose corn syrup after the return of the old Coca-Cola, actually had already been drinking it with high fructose corn syrup, in most cases long before New Coke.” When the “Classic” Coke was reintroduced (with corn syrup) I became familiar with the taste and noticed a difference … especially when I went to Bermuda and tasted the original stuff it replaced (that had cane sugar).

    • Daven Hiskey

      You don’t need to go to Bermuda to taste the version with cane sugar. It’s available in most supermarkets in the glass bottles.