New Coke: This is the story behind Coca-Cola’s huge risk, bigger failure and impressive recovery

Around the world, there are few more iconic and instantly recognizable brands than Coca-Cola. Since it’s introduction in 1886 the ‘Coke’ brand has been carefully developed into a global behemoth, but that’s not to say it’s been all smooth sailing.

Perhaps the biggest, most notable, misstep came in the 1980s with a decision that goes down in history as one of the greatest marketing mistakes: ‘New Coke’.

On April 23, 1985 The Coca-Cola Company announced that it was going to change the formula behind the world’s most popular soft drink. Company Chairman and CEO Roberto Goizueta announced the news at New York City’s Lincoln Center, promising that the new recipe would bring a “smoother, rounder, yet bolder—a more harmonious flavor.”

“Some may choose to call this the boldest single marketing move in the history of the packaged-goods business,” Goizueta continued. “We simply call it the surest move ever made.”

He was to be proved wrong, almost immediately, as New Coke flopped.

Why did Coke change the recipe?

Although it’s difficult to imagine now, the historic change came as Coke was fearing that it was losing it’s dominance in the market. History reveals that rival Pepsi-Cola was gaining market share through the 1970s and early 1980s with bold new commercial ideas.

The ‘Pepsi Challenge’ campaign claimed to show that consumers actually preferred Pepsi in a blind taste test. Shockingly for Coca-Cola, their own internal tests returned the same result.

It was in that context that Coca-Cola tried to rethink their own product but it had catastrophic consequences. On the day that New Coke was released the price of company shares dropped, while the value of Pepsi-Cola stocks rose. It looked like an admission of defeat by Coca-Cola and Pepsi was quick to capitalize, taking out full-page newspaper adverts and giving employees a day off in celebration.

Coca-Cola was beset by angry consumers, fielding up to 8,000 complaint phone calls per day. Grassroots groups such as “Old Cola Drinkers of America” protested publicly, pouring bottles of New Coke down drains.

After just three months, Coca-Cola were forced to perform a complete U-turn and return to the original recipe. They announced the name ‘Coca-Cola Classic’ with news networks breaking from their usual coverage to bring special reports. Now, ‘New Coke’ goes down in history as one of the great marketing errors.

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