The boys in Atlanta tried something like this before with “New Coke” in 1985, a reformulated product meant to take the place of the flagship brand,”Coca Cola”.
Things did not go well … is this going to be a repeat?
Introducing new Coca Cola Life
Intended to compete in an evolving soft drink category referred to as “mid-calorie colas,” Coca-Cola Life, is rolling into the United States following test markets in South America, supported by heavy sampling, social and broadcast media. The new product walks away from the high fructose corn syrup ingredient of regular Coke, and relies instead on a combination of cane sugar and and a sweetener from the herb family member, “stevia.” It is Coke’s effort to attract cola drinkers who want the full-bodied taste of regular Coke without all the calories. A 330-ml can of Coca-Cola Life, for instance, contains 89 calories. A similar size can of regular Coke has around 140 calories. Pepsi introduced a similar “mid-calorie” product, Pepsi Next, in 2012, sweetened with corn syrup and sucralose. Results have been uninspiring. Coke will begin distributing Coca-Cola Life nationwide in October.
The shadow of New Coke
Context is everything. Hmmm, OK.
The story of “new Coke” is widely recalled as a new product marketing fiasco, but the company has steadfastly argued that the market context leading up to the launch is often forgotten. In 1985, the Coca-Cola Company’s share lead over Pepsi had been slowly slipping for 15 years. The cola category in general was flat. Consumer preference for Coca-Cola was dipping, as was consumer awareness.
R&D and Marketing shake things up.
Soooo, to shake things up and recover lost business New Coke was launched in April, 1985. A totally reformulated product that was to replace all (100%) of the existing flagship Coca Cola product in stores. And “shake things up” it did, just as throwing a hand grenade into a crowd would shake things up. While extensive consumer taste testing had been done and indicated that the overwhelming majority of drinkers were fine with the taste, a dangerous 10-15% of participants weren’t reacting negatively to the “taste,” but were aggressively irate that “their” iconic American brand was being, in effect, thrown in the trash.
The you-know-what hits the fan!
And here’s the behavioral psychology lesson for all of us. After the boys in the white lab coats had taken out the artificial sweeteners in Diet Coke and substituted high fructose corn syrup, they’d succeeded in creating a new, apparently tasty drink. The Marketing guys were happy that they had a new claim, “No more ‘sugar’ (cane sugar that is).” The only ones unhappy were that 10-15% of nostalgic fans who wanted NO changes and respect for their BRAND. You know the rest of the story (or lesson). Callers lit up the switchboards, at local offices and Atlanta corporate HQ. Mean, yes even what could be described as “hate” mail flooded into the office of Chairman and Chief Executive officer Roberto Goizueta (remember this was before email and the internet).
Mr. Goizueta received a letter addressed to “Chief Dodo, The Coca-Cola Company.” (He often said he was more upset that it was actually delivered to him!) Another person wrote to him asking for his autograph — because, in years to come, the signature of “one of the dumbest executives in American business history” would be worth a fortune.
Consumers threatened store managers as they emptied store shelves and warehouses, stocking up on their beloved original formula product before stocks ran out and vowing to not buy New Coke.
Coca Cola management finally “cried uncle” before 90 days had passed from New Coke’s official launch date, returning original Coca Cola to the shelves and fountain dispensers. Original formula Coca-Cola (then renamed”Classic”) returned to be sold next New Coke. Later, the name of New Coke was changed to Coke II. In the end the product in any formulation is no longer available in the United States.
Blockbuster or Bomb?
We won’t know for some time if Coca Cola Life is a successful product, in its role of what I would call a “line flanker.” Unlike its earlier generation “New Coke,” it is not meant to totally replace the flagship Coca Cola product. More likely it has at least two marketing objectives, both of which it could well achieve.
- Slow the erosion of the Coca Cola franchise volume by offering “health conscious” consumers a “mid-calorie” cola.
- Address/avoid localized “sugar” taxes/regulations that are popping up among governmental “food Nazis” intent on mandating consumer drink (and school lunch) choices in the name of obesity fighting.
So in reality, it’s not a question of “blockbuster ” or “bomb” choice. Over time in our increasingly regulated societies, sweetened beverages will come under increasing pressures on all sides, much as cigarettes today.
Coca Cola Life will offset those pressures, somewhat, for a while, but longer term (say 20-30 years) I’m not sure there’ll be a “Coke” of any name.
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