There are in fact four theories relative to the "New Coke" fiasco. Of the four, three might be true, at least in part.
- The certifiably untrue one is that the whole thing was a cover for a switch from sugar to HFCS. In fact, the switch between the two was already ongoing. Besides no one can really tell the difference between sugar and HFCS.
- They were that dumb. Diet Coke (which is really diet "New Coke") had launched a few years before and taken off. KO combined that with its one sip only taste testing and got exactly the wrong message. The one sip only test skewed towards the sweeter product, a well known fact, but KO ignored this. As for Diet Coke, both its predecessor TAB and RC Cola's Diet Right were 100% aimed at women, as was to a great degree Diet Pepsi. The Diet Coke boom was not because of the taste, but because of the merit of the brand Coca-Cola and because it was the first diet product to not tell men "this is not for you". This was because the old, Southern, staff at KO HQ, who earned their bones as marketers, were being replaced by northern MBAs who were so convinced of their own briliance, that the sales decline had to be the product's fault and not theirs.
- They really were that smart. The classic conspiracy theory, no pun intended. Simply they took real Coke away for a month and a half, knowing what would happen, and enjoyed the sales boom that followed when they gave it back.
- It was the lawyers. This one is complicated. KO does not really make Coca-Cola, it makes Coca-Cola syrup, which it sells to bottlers who were independent companies who add the fizz and water and sell that to you. At that time there were a lot of bottlers (KO consolidated most of its bottlers in the 90s and 00s, but that is another story) and the relationship was contentious. Sale of Coca-Cola syrup was governed by a 1921 court case that set the price based on the price of sugar. That was fine, as sugar (or HFCS) is the main ingredient, but there is other stuff in there, the stuff in the "secret formula" and 60 years of inflation had eroded KO's profit margin. But that court case only applied to "Coca-Cola syrup" (they had different agreements for Sprite, etc) so when Diet Coke came out the bottlers said that Diet Coke syrup was a form of Coca-Cola syrup. They lost. So KO's lawyers get an idea. The "new Coke" syrup was the "Coca-Cola syrup" from the court case, and, of course, no one wanted any, because it was vile. The "Coca-Cola Classic" syrup was a new product, and KO would sell that to its bottlers at a higher price. Back to court, but the bottlers finally realized that having a deal where your supplier was losing money on every sale was a slow form of suicide, and they settled out of court with new contracts that upped the price of the syrup to the same rate they were paying for Sprite, Mr. Pibb and all the other stuff.
- The certifiably untrue one is that the whole thing was a cover for a switch from sugar to HFCS. In fact, the switch between the two was already ongoing. Besides no one can really tell the difference between sugar and HFCS.
- They were that dumb. Diet Coke (which is really diet "New Coke") had launched a few years before and taken off. KO combined that with its one sip only taste testing and got exactly the wrong message. The one sip only test skewed towards the sweeter product, a well known fact, but KO ignored this. As for Diet Coke, both its predecessor TAB and RC Cola's Diet Right were 100% aimed at women, as was to a great degree Diet Pepsi. The Diet Coke boom was not because of the taste, but because of the merit of the brand Coca-Cola and because it was the first diet product to not tell men "this is not for you". This was because the old, Southern, staff at KO HQ, who earned their bones as marketers, were being replaced by northern MBAs who were so convinced of their own briliance, that the sales decline had to be the product's fault and not theirs.
- They really were that smart. The classic conspiracy theory, no pun intended. Simply they took real Coke away for a month and a half, knowing what would happen, and enjoyed the sales boom that followed when they gave it back.
- It was the lawyers. This one is complicated. KO does not really make Coca-Cola, it makes Coca-Cola syrup, which it sells to bottlers who were independent companies who add the fizz and water and sell that to you. At that time there were a lot of bottlers (KO consolidated most of its bottlers in the 90s and 00s, but that is another story) and the relationship was contentious. Sale of Coca-Cola syrup was governed by a 1921 court case that set the price based on the price of sugar. That was fine, as sugar (or HFCS) is the main ingredient, but there is other stuff in there, the stuff in the "secret formula" and 60 years of inflation had eroded KO's profit margin. But that court case only applied to "Coca-Cola syrup" (they had different agreements for Sprite, etc) so when Diet Coke came out the bottlers said that Diet Coke syrup was a form of Coca-Cola syrup. They lost. So KO's lawyers get an idea. The "new Coke" syrup was the "Coca-Cola syrup" from the court case, and, of course, no one wanted any, because it was vile. The "Coca-Cola Classic" syrup was a new product, and KO would sell that to its bottlers at a higher price. Back to court, but the bottlers finally realized that having a deal where your supplier was losing money on every sale was a slow form of suicide, and they settled out of court with new contracts that upped the price of the syrup to the same rate they were paying for Sprite, Mr. Pibb and all the other stuff.
