The New Coke fiasco, and the current standing between Coke and Pepsi

Rather than hijack the thread about alcoholic beverages, I decided to start this one. Here’s the wikipedia link about the episode.

I get the basics of what happened. I lived through it, and count myself among those who were upset about the change, even though I was only 8 at the time. I was one of those people who refused to drink New Coke after one taste, but gladly went back to the original once it returned.

What I don’t get is what triggered the whole thing. Why was Pepsi gaining on Coke? Was it merely that Pepsi had better advertising at the time, especially with Michael J Fox drinking it in Back to the Future? If Pepsi really does taste better, and Coke was bound to lose in the long run as more people found out about Pepsi, why didn’t that trend continue once the original Coke came back?

As far as the current day, it seems like Coke is clearly ahead of Pepsi. Coke is seemingly everywhere. All the generic store brands taste like Coke. When I eat out and ask for a Coke, it’s rare that I’m told “we only have Pepsi.” I rarely see a convenience store soda fountain with Pepsi. Is this just a regional thing in Texas skewing my perspective?

Pepsi really does taste better, but Coke wasn’t bound to lose in the long run, because tasting better isn’t the criterion people use when choosing a drink.

Another possibility is that what people prefer in a head-to-head taste test isn’t necessarily what they’d prefer long term. They could get tired of the other more quickly.

One thing people said was that Pepsi tasted sweeter. And I know I will sometimes get tired of too sweet things compared to their slightly less sweet counterparts. I get these rice crisp cereal bars that have two varieties: one with sprinkles and one without. I know I get more tired of the one with sprinkles, which is much sweeter.

I live in Texas too. It’s clearly a regional thing. In Texas it’s Coke. But just one state over in Oklahoma, it’s all about the Pepsi.

It’s a matter of preference. I certainly think that Coke tastes better than Pepsi. I can tell the difference, quite clearly, and if a place only serves Pepsi products, I don’t get a cola. I used to get Mt. Dew instead, but now I generally won’t go with a soft drink at all.

Pepsi is sweeter, but I think it’s too sweet, cloying, and had much less overall flavor than Coke.

New Coke was introduced on April 23, 1985. Back to the Future was released on July 3.

The problem with Coke stretched back several years. Yes, Pepsi had better advertising that associated the product with the youth market that Coke could never quite match. In addition, it was the taste-tasting done for the introduction of Diet Coke in 1982 that led to the surprise that focus groups preferred a sweeter drink, as did consumers in test markets.

Fountain sales - sales of cups rather than purchase of bottles - were a huge revenue base for Coke, as much as 70% of U.S. sales. Their contracts required exclusivity: a restaurant couldn’t serve both Coke and Pepsi. That’s why customers who asked for a Coke had to be asked if Pepsi was okay. The companies enforced their territories like Mafia dons. If the problem was that sweeter drinks worked better in small doses, like a cup with fast food, then changing the taste to make Coke sweeter was a wise move, especially as a hundredth anniversary campaign.

So imagine the irony when Coke learned that the fantastically deep relationship it had developed over that 100 years, making it the archetype and apotheosis of all soft drinks, meant that a major change, even for the better, wouldn’t be accepted by consumers. Many factors worked against the rollout but Coke turned out to be competing against itself, not Pepsi. Companies almost always lose that battle.

There was no chance that Coke was going to lose the larger war. It dominated the world market, with market share globally several times that of Pepsi. Moreover, the controversy brought so much attention to Coke that its sales increased dramatically, so much so that some people argued that the whole “fiasco” was actually a deliberate ploy. No evidence exists that this was ever true. People just deeply hate change, especially to products associated with their childhoods.

Well, as you did, I lived through this too, as well as the lead-up to it. Basically, IMHO and all, Coke was seen as the older generation’s thing. The whole Pepsi is the taste of the new generation and all. Pepsi was really pushing this hard, and the results were pretty clear that Pepsi was gaining market share. Coke decided to change its formula, thinking that this is what people really wanted. Stupidly, they chose to do a wholesale change instead of just having a new product to go along with their classic Coke product. This was definitely a short-term mistake, though in the long term I think it worked out for them.

Personally, when I was a kid I liked Pepsi better, and probably when this whole thing dusted up (I was in my 30’s by this point) I probably would have preferred a Pepsi myself to a Coke. In the fallout of all of this, however, I definitely switched my own preference to Coke (or, I guess Classic Coke) and hold to that to this day…not that I drink a lot of soda anymore, but if I do I usually get Coke from Mexico with real cane sugar.

Anyway, that’s my take. I don’t know what the relative market share is these days, but no one really won, in the long term, the cola wars.

It still doesn’t make sense to me, other than to say that Coke overreacted to a temporary surge in Pepsi’s popularity. Let’s take the hypothetical that Coke had, for whatever reason, decided to stick with the original formula, and New Coke was never released. I suspect that things would still look largely the same now. We wouldn’t be living in a world dominated by Pepsi.

Probably, but not because of taste. Taste is a distant third place in determining market share after branding and distribution monopolies.

I think it was more serious than you seem to realize. It’s not just about buying soda at the store, it’s also about restaurants and such selling your wares. If people (young people) were demanding Pepsi at their favorite restaurants and such then there was pressure to make the switch…and many restaurants did that. To the Coke people it probably looked like an inevitable death spiral with Pepsi gaining steadily in market share until, eventually, they would dominate the market and Coke would be relegated to obscurity. Of course, this didn’t happen, but I think mainly it was because both companies diversified from just Coke/Pepsi into other soft drinks, so that they had an array of products (perfect for those restaurants). But this is hindsight. The Coke executives really thought that they needed a new recipe, that the new generation was just tired of the classic Coke taste and that it was associated with old people, while Pepsi was associated with the younger generations who would be dominating the market going forward.

Wasn’t the internal company panic caused because blind taste-tests showed people really do like Pepsi better?

I wish New Coke was still widely out there. I missed the craze and while it is technically out there, I’ve never had it. I’ve had Diet Coke, which is disgusting. Isn’t Diet Coke based on it?

They missed asking an 8 year old Coke loving / Pepsi disliking Flik about his tastes at that time :stuck_out_tongue_winking_eye:.

lol, true. Like I said, at that time I probably was more a Pepsi drinker, as…well, I DID associate Coke with old people from the previous generation. More than taste, it was the perception that Coke was just what old people drink, and that Pepsi was what young people drink. Marketing at its finest. It didn’t hurt that a lot of the Pepsi commercials were better, and had better endorsements from cooler people than Coke did, and better product placement in movies and stuff…especially movies geared towards younger audiences. Or, at least that was my perception at the time.

It’s funny because when they started to pull classic Coke out and replace it with New Coke and I tried New Coke (frankly, it tasted a lot like Pepsi to me) was when I actually started to like the old, Classic Coke taste better. It was losing it that made me appreciate it as I hadn’t before. This was even before the rush to buy up all the old Coke before it was gone, or the people screaming for Coke to bring it back. In terms of a longer-scale marketing plan, it worked…people were screaming for the old formula.

Today, I think Coke has the largest market share between Coke and Pepsi, but it’s not that great a gap.

I tried looking that up, and different sources give wildly different numbers for the market share of each, but all seem to agree that Coke’s share is about twice as large as Pepsi’s.

That definitely was part of it. Also, the flavor profile for Diet Coke was developed to be similar to Diet Pepsi, not regular Coke. So, the seeds had been laid then.

It wasn’t just a "temporary surge* – it was that they felt that the demographics weren’t on their side; where they were losing share was among younger people.

In part, and, as noted, they felt that they were losing the marketing war among younger consumers to Pepsi.

As I noted in the other thread, New Coke (the formula) was actually quite good, but choosing to use it to replace the original Coke formula, rather than introduce it as a separate item, was what turned out to be the massive mistake.

I didn’t try and look it up, just a WAG. That’s surprising if true…twice the market share would be a huge lead for Coke over Pepsi.

I believe it was the other way around. New Coke was essentially Diet Coke, which came out in 1982, with corn syrup instead of artificial sweeteners.

I remember the Pepsi Generation commercials. Remember, the infamous Michael Jackson hair-on-fire accident occurred while filming a Pepsi commercial. Pepsi had MJ, the biggest pop star of the time. New Coke was trotted out by Bill Cosby, at the time America’s Dad. Popular, but a dad!

Sorta. Pepsi has a little more sugar so it is sweeter.

But Coke has spice notes which make it seem sweeter, and Pepsi has citrus notes, which makes it seem less sweet.

To a diehard Coke drinker, tatse does not matter. It has to be Coke.


Honestly- in a blind taste test the odds are that you will either prefer Pepsi or have no preference.

Another thing to consider, as the OP asks about the “current standing” between Coke and Pepsi, is that, in the U.S., at least, sales of traditional carbonated soft drinks – particularly the sugared versions of them – has been on a steady decline for the past two to three decades.

Consumers (and, in particular, younger consumers) have increasingly been opting for other choices: coffees, teas (both hot and cold), energy drinks, bottled water, flavored waters, etc.

Both Coca-Cola and Pepsico have diversified their portfolios to combat this, and while there is still an awful lot of equity in their flagship brands, the “Coke vs. Pepsi” battle itself has been a battle for market share in a contracting market.

Original Coke will always have a spot in my heart. On the other hand, it’s not all that good for said heart. Carbonated, flavored, but unsweetened beverages seem like a great substitute. I’m not quite sure why that market is still so small.