![]() ![]() Twenty bottlers sued Coca-Cola for changing the formula and their pricing agreements. The media picked up the story about why people didn’t like New Coke, and it was the end.Īs Coke management travelled to local bottling plants from Monaco to Mexico, their bottlers didn’t want to use the new formula. Southerners, sentimentally attached to Atlanta-based Coke, were upset about the perceived capitulation to New York-based Pepsi. Celebrities, including late-night talk show, hosts Johnny Carson and David Letterman, and even devoted Coke drinker Fidel Castro criticized the change. The backlash against New Coke was swift and certain. The day after the announcement, Pepsi gave their employees the day off, claiming that they had won the cola wars. The new product seemed to simultaneously verify a decade’s worth of Pepsi advertising (“Coke doesn’t taste as good”), while undermining ten years of their own advertising defending the formula and their flavor. In April 1985 Coca-Cola launched “New Coke” as a direct response to the Pepsi Challenge. Coke was clinging to dominance only in vending machines and restaurant soda fountains. Pepsi began to outsell Coke in supermarkets, and younger demographics were increasingly choosing Pepsi. From the 1950s to 1983, Coca-Cola sales declined from 60% to just 24% of the market share. It seemed as though, although they still had a massive market advantage, they weren’t confident about the taste of their cola. They came across as defensive and worried. In the beginning, Coke PR teams and representatives questioned the data and denied the results. Time and time again, when the labels were revealed, tasters chose Pepsi over Coke. The Pepsi Challenge consisted of blind taste tests of Coke and Pepsi. But in 1975 it came roaring back with an unmissable ad campaign that took direct aim at their rival. ![]() The company declared bankruptcy a couple of times, and changed hands a few times. The 1930s and 1940s were hard times for the Pepsi Cola Company, which was battered by the dramatically fluctuating price of sugar during WWII. But Pepsi competed on price, selling their cola more affordably. At that time, Coca-Cola had wider distribution, bigger brand recognition, and was already being exported to Europe. The two companies were locked in direct competition practically from the beginning. In 1898, he named his formula “Pepsi-Cola”, and the Pepsi-Cola Company was founded in 1902. Meanwhile, in 1893, pharmacist Caleb Bradham invented his own recipe for a cola. In 1892, Candler founded the Coca-Cola Company, and the formula was being sold and distributed throughout the US within just a couple of years. In 1886, American pharmacist John Stith Pemberton developed the first version of the formula that would later be called “Coca-Cola.” In 1888, Pemberton sold the formula to business tycoon and fellow druggist Asa Griggs Candler. Almost equally important was the social and community role played by the soda fountain when bars and pubs were closed and the country sought more wholesome activities. Many early colas had various health and medical benefits claims, and most of them contained stimulants. In 1920s America, as Prohibition gripped the country, the soda fountain became the most important profit center in a local pharmacy, and pharmacists combined the carbonated water with various syrups and flavorings to offer their customers. When the soda fountain was invented in 1888, it was quickly adopted by local pharmacies, as a substitute for famous mineral and spa waters with healing benefits. Pharmacies of the day formulated various medications, because there were no restrictions on over the counter drugs, and individual pharmacists developed their own formulas. The advertising onslaught that we today call “The Cola Wars” hit its peak from the mid-1970s to mid-1980s, but the actual rivalry between Coke and Pepsi goes back to virtually the day that the Pepsi Cola Company was formed, in 1902.Ĭolas were originally sweetened, carbonated, caffeinated drinks flavored with spices, citrus oils, and other flavorings, sold and enjoyed at pharmacy soda fountains. ![]() More importantly, the Cola Wars are a fantastic lesson in marketing, flavors, and the forces that drive consumers. Today’s soft drinks market is more competitive than it’s ever been, as demand slows for traditional high-sugar carbonated drinks. Contrary to popular belief, the Cola Wars are far from over. ![]()
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