How the beverage industry’s changed

Marketplace Staff Apr 22, 2010

How the beverage industry’s changed

Marketplace Staff Apr 22, 2010


Kai Ryssdal: Tomorrow is one of the more obscure dates in American corporate history. Obscure, but what you might call a learning moment. April 23rd, 1985, Coca Cola changes the formula of the most successful soft drink ever and comes out with New Coke. It was so bad, and consumer reaction so negative, that Coke backpedaled as fast as it could. Reintroduced what was called for a while Coke Classic. And launched a whole ad campaign to get customers back. Anybody remember Max Headroom?

Max Headroom: now when you first tried Coke, I bet you said, “Uh-uh. Not for me.” But hey, let’s not let first impressions sway us. And lets try Coke, Coke, Coke again, shall we? Because once you’ve acquired that new wave taste, you’re going to want to try it again, again, and again.

Like Max Headroom, New Coke faded mercifully into obscurity as one of the biggest product launch disasters ever. But we’ve called John Craven to talk about the bad old days of New Coke. And how things have changed over the past 25 years. He’s the founder and president of John, welcome to the program.

John Craven: Thanks.

Ryssdal: Did you ever drink New Coke, by the way? Did you ever try it?

CRAVEN: Of course.

Ryssdal: What did you think?

CRAVEN: I don’t remember it being a positive experience.

Ryssdal: New Coke was, I think it’s fair to say, a disaster. Is there any chance that corporate America has not learned its lesson, and that we might see something like this again?

CRAVEN: No, I don’t think we’ll see something like that again. I think that people aren’t drinking as much cola as they used to domestically. So I think in that sense the need to go and mess with those products, I mean they’re just changing the flavor a little bit, it’s not going to make people drink cola again.

Ryssdal: Is it easier now to launch new products? I mean back then it was, you know, you had to do this whole re-branding thing. And now you just sort of, instead of Cheerios you have Honey Nut Cheerios, and Cinnamon Cheerios, and you just do these brand extensions, right?

CRAVEN: Right. I think from a technical point of view it’s probably easier just because manufacturing is much better than it was back then. But I think making an impact with one of those brands is much harder just because there’s so much noise out there. Even the choice of mediums to market them, there’s just too many. I mean back in the days of maybe TV and print I think things seemed a little simpler to some of these companies.

Ryssdal: Let me ask you this, though, you can go to some beverage stores now and find, just to pull another cola name out of the hat, you can find Tab, right, which is a very distinctive taste back in the 70s and 80s. How come there’s not that niche market for those New Coke people who really loved it?

CRAVEN: You know, look, cola is very much a part of American culture still. I think there’s always a consumer out there who wants to try something a little better. For example, there had been Mexican Coke a few years back, a sort of gray market imported Coca Cola made with cane sugar and that had a cult following. There’s people who are out there looking for Passover Coke. But at the end of the day, I think most people want that mainstream, cheap, readily available product.

Ryssdal: The thing is, though, people who like Coke like Coke, and people who like Pepsi like Pepsi, so how come when New Coke was rolled out, those Coke loyalists, right — who wore red and white t-shirts because they loved Coke so much — how come they didn’t stick with the New Coke?

CRAVEN: I think just because they changed part of what brought them to the brand, which was, actually they changed two things. They changed the look of it, and they changed the flavor of it. And I think when you remove or change both of those things you have something I think for the Coke loyalist was, it was no longer Coke. So I think they might as well have been drinking Pepsi at that point to be honest with you.

Ryssdal: Yeah, and really consumers don’t have loyalties nowadays anyway, do they?

CRAVEN: I think nowadays it’s more about trying what’s new or hip at that given moment. You can’t just go out and build cool intentionally anymore. So right now in the beverage business we’ve got a ton of small brands, but there isn’t one that is the breakout of the year. So I think it is definitely getting harder.

Ryssdal: John Craven. He’s the president of John, thanks a lot.

CRAVEN: Thank you.

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