March 12, 1894  The Real Thing

Over 400,000 calls and letters came into company headquarters, complaining about the change.  One note was addressed to “Chief Dodo, The Coca-Cola Company”. Another letter asked for Goizueta’s autograph, since the signature of “one of the dumbest executives in American business history”

By the 19th century, Europeans had long believed natural mineral waters held medicinal qualities, and favored the beverages over often polluted common drinking water. British chemist Joseph Priestley invented a means of carbonating water in 1772.  Jacob Schweppe’s Geneva, Switzerland company was bottling the stuff by the 1780s. The first soda water manufacturer in the US was Yale University chemist Benjamin Silliman in 1807, though it was Joseph Hawkins of Baltimore who secured the first US patent, in 1809.

horsfords

At first sold for their therapeutic value, consumers increasingly bought carbonated beverages for refreshment. By the time of the Civil War, “soft drinks” were flavored with ginger, vanilla, fruits, roots, herbs, and countless other flavorings. The first cola drink appeared in 1881.

In 1865, Confederate Cavalry officer John Stith Pemberton was wounded by a saber slash across his chest at the Battle of Columbus, Georgia. Like many wounded veterans, Pemberton became addicted to the morphine given him, to help ease the pain. A chemist in civil life, Pemberton experimented with painkillers to take the place of opiates, landing on a combination of the coca plant and kola nut in 1886.

Vicksburg, Mississippi pharmacist Joseph Biedenharn installed bottling equipment in the back of his soda fountain and sold the first bottles of Coca Cola on March 12, 1894.

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The most famous rivalry in the soft drink business began in the 1930s, when Pepsi offered a 12oz bottle for the same 5¢ as Coca Cola’s six ounces.

The Coca Cola Company’s flagship brand had a 60% share by the end of WWII, but that declined to less than 24% by the early 80s, most of the difference lost to Pepsi and their “Pepsi challenge” blind taste test promotions of the late 70s.

cola_taste_test_300x352By the 80s, market analysts believed that baby boomers were likely to switch to diet drinks as they aged, and any growth in the full calorie segment was going to come from younger consumers who preferred the sweeter taste of Pepsi.

Roberto Goizueta came on board as Coca Cola Company CEO in 1980, saying that there would be “no sacred cows” among their products. He meant it. The company launched the top secret “Project Kansas”, to test and perfect the flavor for a new version of Coke. The company’s marketing department fanned out holding taste tests, surveys, and focus groups.

Early results were favorable, the newer, sweeter mixture overwhelmingly beating both Pepsi and Coke itself. Most tasters said that they would buy the product, but a small minority of 10–12% were angry and alienated at the very thought of it. This small percentage was adamant. They would stop drinking Coke products altogether, and they frequently swayed other members of their focus groups.

The way things turned out, the company should have listened to this group a little more carefully.

On an April Friday in 1985, Coke let the media know that a major announcement was coming the following Tuesday. Coca Cola officials spent a busy weekend preparing the re-launch, while Pepsi Executives announced a company-wide holiday, taking out a full page New York Times ad crowing “Pepsi had Won the Cola Wars“.

new-coke

Skepticism was high on the day of the Big Announcement. Reporters were fed questions by Pepsi officials, and Goizueta fumbled, refusing to state the reason for the change. He certainly wasn’t going to give Pepsi any credit for their performance in taste tests, explaining “[It’s] smoother, uh, uh, rounder yet, uh, yet bolder…a more harmonious flavor“.

The backlash was soon in coming, and closely tracked earlier focus group results. Atlanta based Coca Cola’s southern customers described the change as another surrender to the “Yankees”.  Consumers filled basements with the old Coke.  One man in San Antonio bought $1,000 worth.

“Protesters at a Coca-Cola event in downtown Atlanta in May carried signs with “We want the real thing” and “Our children will never know refreshment.”” – Coca-cola.com

Over 400,000 calls and letters came into company headquarters, complaining about the change.  One note was addressed to “Chief Dodo, The Coca-Cola Company“. Goizueta himself said the worst part, was the letter made it to him!  Another letter asked for Goizueta’s autograph, since the signature of “one of the dumbest executives in American business history” would probably be worth a fortune. Critics proclaimed the “marketing blunder of the century” while frazzled customer service representatives fielded fifteen hundred angry calls, a day.   A psychiatrist hired to listen in on calls, told executives some callers sounded as if they were mourning the death of a family member.

max_headroom_1986Even Max Headroom and his “C-c-c-catch the wave!” couldn’t save the company.

Ads for “New Coke” were booed at the Houston Astrodome, while Pepsi ran ads in which smiling first-time Pepsi drinkers said “Now I know why Coke did it!”

Even Fidel Castro weighed in, calling the change a sign of capitalist decadence.

Company President Donald Keough knew it was over, on a visit to the Mediterranean Principality of Monaco. A small restaurant owner proudly said that he had “the real thing, it’s a real Coke,” offering Keough’s party a bottle of the old stuff.

The 1985 return of the old brand led two network news broadcasts, and hit the front page of nearly every newspaper, in the country.  “New Coke” became “Coke II” and quietly disappeared, from store shelves.  One reporter asked Keough if the whole thing had been a publicity stunt. Keough’s answer was itself, a classic. “We’re not that dumb,” he said, “and we’re not that smart”.

 

A Trivial Matter

Coke makes so many different beverages if you drank one per day, it would take you over 9 years to try them all. Coca-Cola’s $35.1 billion in revenue makes it the 84th largest economy in the world, just ahead of Costa Rica. H/T gkfacts.in
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January 20, 1940  A People, an Empire, a Drink

Coca-Cola GmbH had concocted a sweet, slightly cheesy tasting soft drink, and the German market responded. Sales rose steadily throughout the war, particularly as alternatives became increasingly scarce. People didn’t just drink the stuff, either.

In 1865, Confederate Cavalry officer John Stith Pemberton was wounded by a saber slash. Like many wounded veterans, Pemberton became addicted to the morphine given him to help ease the pain. Unlike most, “Dr.” Pemberton possessed the wherewithal to do something about it.

In civil life, Pemberton was a chemist.  After the war, the former cavalry officer experimented with non-opiate pain-killers, landing on a combination of the coca leaf and kola nut.  By 1886, he was bottling his concoction and selling it for 5¢ a bottle out of an Atlanta pharmacy.  Ten years later, Coca-Cola was available in every American state and territory.

Cocaine_CocaCola2

Europeans had long believed that natural mineral waters held medicinal qualities, and favored such beverages over often-polluted common drinking water.  In 1920, the company opened its first European bottling plant, in France. By the time of Hitler’s annexation of Austria, the “Anschluss” of 1938, Coca-Cola had been in Germany for ten years.

Around the time that Hitler and the Nazi party were coming to power in 1933, German-born Max Keith (pronounced “Kite”) took over Coca-Cola’s German subsidiary, Coca-Cola Deutschland, GmbH.  Mark Pendergrast, author of For God, Country, and Coca-Cola, writes that Keith “valued his allegiance to the drink and to the company more than his allegiance to his own country”.  He had no qualms about doing business with every aspect of German society, including Nazi party members.

Ein Getrank

Bizarre though it may sound to the modern ear, a number of famous Americans and companies were involved with the European fascist regimes of the 1930s, including William Randolph Hearst, Joseph Kennedy (JFK’s father), Charles Lindbergh, John Rockefeller, Andrew Mellon (banker, head of Alcoa, and Secretary of the Treasury), DuPont, General Motors, Standard Oil (now Exxon), Ford, ITT, Allen Dulles (later head of the CIA), Prescott Bush, National City Bank, General Electric, and many in Hollywood.

In Atlanta, Coca-Cola President Robert Woodruff was no exception.  Woodruff himself attended the 1936 Berlin Olympics, alongside banners depicting the company logo, with the slogan  “Ein Volk, ein Reich, ein Getrank – A People, an Empire, a Drink”.

Coca-Cola-Advertisements-in-Nazi-Germany-in-the-1930s-8

Woodruff used a 10th anniversary party for Coca-Cola GmbH to organize a mass Nazi salute in honor of Hitler’s 50th birthday, declaring that it was “to commemorate our deepest admiration for our Fuhrer.”

On January 20, 1940, Winston Churchill urged neutral nations to oppose the Nazi war machine, warning that, “Each one hopes that if he feeds the crocodile enough, the crocodile will eat him last.”  Meanwhile in Germany, Coca Cola was the undisputed king of the domestic soft drink market.

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That changed a year later, with the Japanese attack on Pearl Harbor, and the German declaration of war on the United States.

American entry into WW2 meant that American companies ceased business with axis powers, while the German government threatened to seize “enemy owned” businesses.  Max Keith was cut off from all communications with Coca-Cola headquarters in Atlanta, and in danger of the Nazi party nationalizing his beloved company.  As shipments of Coca-Cola’s mythical “7X’ syrup, dried up, Keith had to come up with a substitute for the domestic soft drink market.  Schnell.

Soldiers Gulp Down Coca Cola
Coca-Cola worked with the U.S. government to ensure troops, including these men in Italy, had access to Coke throughout WW2. Bettmann/Getty Images

With wartime rationing already in effect, Keith and his chemists worked with what was available.  Leftovers from other food industries, apple fibers, fruit peelings, beet sugar  and whey, the liquid left over when milk was curdled and strained off to make cheese.

The result was “Fantasievoll”, “Fantastiche” (“Imaginative”, “Fantastic”).  So it is that the soft drink “Fanta”, was borne of the wartime necessities of Nazi Germany.

Coca-Cola GmbH had concocted a sweet, slightly cheesy tasting soft drink, and the German market responded. Sales rose steadily throughout the war, particularly as alternatives became increasingly scarce. People didn’t just drink the stuff, either. With sweeteners of all kinds strictly rationed, Fanta made its way into baked goods, soups and a variety of foodstuffs. By 1943, Fanta sales reached almost three million cases.

Fanta-3

Tristan Donovan, author of the book Fizz: How Soda Shook Up the World, writes “It was Fanta or nothing”. Pendergrast writes that there’s little doubt that Keith did business with Nazis, but he was more company guy than idealogue. “You could not do business inside of Nazi Germany unless you collaborated with them,” wrote Pendergrast. “There’s no question he was a Nazi collaborator. [But] he was not a member of the Nazi party. His allegiance was to Coca-Cola, not to Hitler.”

When American troops liberated Germany in the summer of 1945, legend has it that they found Keith in a half-bombed out factory, still bottling the stuff.

Fun fact: Hitler and his henchmen didn’t call themselves “Nazis”, in fact the term was frowned upon. They were the “NSDAP”, the Nazionale Socialistiche Deutsche Arbaits Partai, (National Socialist German Workers Party), the original abbreviation forwhich, was “Nasos”. The word “Nazi” derives from a Bavarian term meaning “simple minded” and was first used as a term of derision by journalist Konrad Heiden. The term was adopted by Anti-NSDAP’ers and Allied troops after war broke out, and the name stuck.

Despite being on the losing side, Keith was hailed as a hero back in Atlanta. The man who kept the company alive, in Germany. Vice President of Sales Harrison Jones called Keith a “great man”.  He was given control of Coca-Cola, in all of Europe.

coca-cola_ad_third_reich_1935

In April 1955, Coca-Cola reintroduced Fanta as an orange drink. Starting in Italy, the product made its way to the United States, in 1958. The name stuck, and why not. The company already owned the copyright.

In 2012, Fanta saw the strongest sales growth of the top 10 brands, the third Coke branded product to surpass 2 billion in case sales. Today, more than 100 flavors of Fanta are sold around the world, where customers from Latin America to Africa, to Europe, Brazil and China can say,  “Es ist die Reale Sache”.  It’s the Real Thing.

 

March 12, 1894 The Real Thing

Another letter asked for Goizueta’s autograph, since the signature of “one of the dumbest executives in American business history” would probably become valuable in the future.

Europeans long believed that natural mineral waters held medicinal qualities, and favored the beverages over often polluted common drinking water. British chemist Joseph Priestley invented a means of carbonating water in 1772.  Jacob Schweppe’s Geneva, Switzerland company was bottling the stuff by the 1780s. The first soda water manufacturer in the US was Yale University chemist Benjamin Silliman in 1807, though it was Joseph Hawkins of Baltimore who secured the first US patent in 1809.Vintage Soda Foutain

At first sold for their therapeutic value, consumers increasingly bought carbonated beverages for refreshment. By the time of the Civil War, “soft drinks” were flavored with ginger, vanilla, fruits, roots, herbs, and countless other flavorings. The first cola drink appeared in 1881.

Confederate Cavalry officer John Stith Pemberton was wounded by a saber slash across his chest at the Battle of Columbus, Georgia. Like many wounded veterans, he became addicted to the morphine given him to help ease the pain. A chemist in civil life, Pemberton experimented with painkillers to take the place of opiates, landing on a combination of the coca plant and kola nut in 1886. Vicksburg, Mississippi pharmacist Joseph Biedenharn installed bottling equipment in the back of his soda fountain, selling the first bottles of Coca Cola on March 12, 1894.

Coke BottlesThe most famous rivalry in the soft drink business began in the 1930s, when Pepsi offered a 12oz bottle for the same 5¢ as Coca Cola’s six ounces.

The Coca Cola Company’s flagship brand had a 60% share by the end of WWII, but that declined to less than 24% by the early 80s, most of the difference lost to Pepsi and their “Pepsi challenge” blind taste test promotions of the late 70s.

By the 80s, market analysts believed that baby boomers were likely to switch to diet drinks as they aged, and any growth in the full calorie segment was going to come from younger consumers who preferred the sweeter taste of Pepsi.

Roberto Goizueta came on board as Coca Cola Company CEO in 1980, saying that there would beNew coke “no sacred cows” among their products. He meant it. The company launched the top secret “Project Kansas”, to test and perfect the flavor for a new version of Coke. The company’s marketing department fanned out, holding taste tests, surveys, and focus groups.

Early results were favorable, the newer, sweeter mixture overwhelmingly beating both Pepsi and Coke itself. Most tasters said that they would buy the product, but a small minority of 10–12% were angry and alienated at the very thought of it. This small percentage was adamant. They would stop drinking Coke products altogether, and they frequently swayed other members of their focus groups.

The way things turned out, the company should have listened to this group a little more carefully.

New coke taste testOn an April Friday in 1985, Coke let the media know that a major announcement was coming the following Tuesday. Coca Cola officials spent a busy weekend preparing for the re-launch, while Pepsi Executives announced a company-wide holiday, taking out a full page New York Times ad proclaiming that “Pepsi had Won the Cola Wars”.

Skepticism was high on the day of the Big Announcement. Reporters were fed questions by Pepsi officials, and Goizueta fumbled, refusing to state the reason for the change. He certainly wasn’t going to give Pepsi any credit for their performance in taste tests, explaining “[It’s] smoother, uh, uh, rounder yet, uh, yet bolder…a more harmonious flavor”.

The backlash was soon in coming, and closely tracked earlier focus group results. Atlanta based Coca Cola’s southern customers described the change as another surrender to the “Yankees”. Over 400,000 calls and letters came into company headquarters, including one addressed to “Chief Dodo, The Coca-Cola Company”.  Another letter asked for Goizueta’s autograph, since the signature of “one of the dumbest executives in American business history” would probably become valuable in the future. A psychiatrist hired by Coke to listen in on calls, told executives some people sounded as if they were discussing the death of a family member.Time New Coke

Even Max Headroom and his “C-c-c-catch the wave!” couldn’t save the company. Ads for “New Coke” were booed at the Houston Astrodome, while Pepsi ran ads in which a smiling first-time Pepsi drinker said “Now I know why Coke did it!”

Even Fidel Castro weighed in, calling the change a sign of capitalist decadence. Company President Donald Keough realized it was over, on a visit to the Mediterranean Principality of Monaco. A small restaurant owner proudly said that he had “the real thing, it’s a real Coke,” offering Keough’s party a bottle of the old stuff.

And so it was that, in 1985, Coca Cola announced that they’d bring back their 91-year old formula. A reporter asked Keough if the whole thing had been a publicity stunt. Keough’s answer is itself, a classic. “We’re not that dumb,” he said, “and we’re not that smart”.