New Formula Woes : Coke Furor May Be ‘The Real Thing’

It was inviolate.

Though wars raged, thrones toppled and nations rose and perished since it was created by Atlanta pharmacist John Syth Pemberton nearly a century ago, Coca-Cola’s taste remained unchanged--as if it were a sacred trust, never to be altered.

But two months ago, in a widely trumpeted move to boost sales, the Coca-Cola Co. revealed that it was scrapping generations of tradition and doing the unthinkable: replacing the Coke formula, altered only minutely over 99 years, with a recipe for a sweeter, less biting brew.

In the weeks since, things have not necessarily gone better at Coke.

Outraged ‘Cokeaholics’

The company’s 800-number hot line in Atlanta has been ringing incessantly with complaints from outraged “Cokeaholics,” who describe the new Coca-Cola as lacking the old formula’s bite and zing.

“I told them that I felt worse than if I had been betrayed by a husband,” said Mary Williams, 44, a Washington, D.C., Cokeaholic who is one of the more than 40,000 consumers who have phoned Coke since the change, most of them to complain. “I’ve drunk Coke by the caseloads since I was a kid--and now they’ve gone and changed the taste on me without even letting me know they were going to do it.”

The intensity and emotion of the debate that has raged since the new Coke hit the nation’s stores, restaurants and soda fountains in early May has caught its maker off guard.

“It’s thrown the whole company into disarray,” said an Atlanta businessman with high-level connections at Coke. “They’re yanking people out of other positions and off of other products trying to close the floodgates. They’re going to have to short-shuffle everything.”

Siege Mentality

A siege mentality appears to be developing at Coke’s towering downtown Atlanta headquarters. Asked by a reporter for a comment on the public outcry over the changing of the Coca-Cola formula, one company official sniffed disdainfully: “What public outcry? We hear a few minority folks out there, that’s all--and I don’t mean minority in a racial sense.”

But despite the doubts raised by Coke’s gamble, most industry specialists seem to agree that Coca-Cola stands a good chance of raking in the chips in the long run.

“I wouldn’t bet against those guys,” said Gary Hemphill, editor of the trade monthly Beverage Industry. “In spite of all the negatives and all the people saying Coke made a major blunder, I don’t see that they’ve done anything drastically wrong.”

Lee Wilder, a securities analyst with the Atlanta-based brokerage firm of Robinson-Humphrey, said: “One year from now, we will conclude that the company made a bet that will pay off.”

For the moment, however, those who profess to be happiest about Coca-Cola’s formula change are its closest rivals in the $23-billion-a-year soft-drink industry, companies that hope to capitalize on the new ill will toward Coke.

One measure of the depth of the dissent is that even Coca-Cola’s new television commercials, which feature comedian Bill Cosby extolling the virtues of the new Coke, have been drawing fire. “I don’t see how Bill Cosby can get up and tell all those lies,” groused an old Coke fan in Columbus, Ohio. “I’ll never believe another word he says.”

In Seattle, 57-year-old medical researcher Gay Mullins has organized a protest group with nationwide membership that goes by the name of Old Cola Drinkers of America. Bankrolled largely by $45,000 of Mullins’ money, the group operates a phone bank to handle calls from disgruntled Cokeaholics, prints T-shirts and is funding a petition drive in all 50 states and Canada to attempt to force Coke to bring back the old formula--known by the enigmatic code name of “Merchandise 7X.”

Thousands of responses have flooded into the organization’s switchboard. For $5, callers can get a membership kit that includes bumper stickers with the slogans: “Give us The Real Thing” and “Coke Was It.”

Coke executives have become especially sensitive to criticism of the new Coke by prominent residents of Atlanta, the company’s home city. Franklin Garrett, Atlanta’s official historian and a former Coke advertising executive, received a personal rebuke from Coca-Cola Chairman Roberto C. Goizueta for his widely publicized comment that Coca-Cola, in changing its formula, seemed to be “fixin’ something that ain’t broke.”

“He called me on the phone and told me he didn’t like what I said too much,” Garrett said of his conversation with Goizueta. “But, really, what Coca-Cola did was on a par with changing holy writ.”

Shipments Up

Publicly, at least, Coca-Cola spokesmen vehemently deny allegations that their company is in disarray or that their reformulated flagship brand is in hot syrup. They point out that shipments of Coke syrup to bottlers in May were up 8% over the same month last year, and stress that that is nearly double the growth rate before the formula change.

Coke officials also assert that 110 million Americans--nearly half the population of the country--have tasted the new Coke since its introduction, and that 75% of those who have tried it--more than 82 million--say they plan to buy more.

“Those are very strong indicators that the new taste is doing well,” said Coke spokesman Ronald Coleman. “We certainly expect to increase our market share lead as a result. At the same time, we’re concerned about the loyalists who have been Coke fans for years. We’ve been encouraging them to give the new taste a try--and more than twice.”

But one former Coke executive likened Coca-Cola’s boasts about the new flavor to “the band playing on the Titanic” and questioned whether the tune can last much longer. “Harvard Business School will be using this decision as a case study for years to come,” he said.

Pepsi Sales Increasing

According to a survey done for arch-rival Pepsi-Cola, the nation’s No. 2 soft drink, only 19% of loyal Coke drinkers prefer the new taste, while 46% of those who have tried it either will drink less Coke or change to another brand.

Pepsi officials say their company has already recorded a 14% jump in sales in May--the heftiest increase for any month in the company’s 87-year history.

Moving to make the most of any possible advantage, Pepsi-Cola ran full-page ads in nationally distributed newspapers earlier this month extending its “sincere appreciation and warmest welcome” to “the New Pepsi Generation.”

Oddly enough, industry analysts say, Coca-Cola changed its formula to bring the taste of Coke closer to Pepsi and siphon off some of Pepsi’s market share.

Although Coca-Cola had a 21.8% share of the total market in 1984, according to Beverage Industry, that represents a decline in Coke’s fortunes since 1980, when it held a 23.4% share.

According to official Coke statements, the decision to launch Coca-Cola with a new taste is part of the company’s “Strategy for the 1980s,” which was unveiled four years ago. In outlining that blueprint to Coca-Cola managers in 1981, company Chairman Goizueta said: “There are no sacred cows in the way we manage our business, including the formulation of any or all of our products.”

Formula Secret

That statement might have come as a surprise to Asa Griggs Candler, the company founder who turned pharmacist Pemberton’s ingenious blend of water, sugar, coca leaves and kola nuts into a national success. That original formula is still a zealously guarded company secret, locked deep in a downtown Atlanta bank vault and accessible only to a handful of Coke’s most trusted executives.

Candler’s son, Charles Howard Candler, wrote in his autobiography: “One of the proudest moments in my life came when my father . . . initiated me into the mysteries of the formula. No written memorandum was permitted. No written formulae were shown. Containers of ingredients, from which the labels had been removed, were identified only by sight, smell and remembering where each was put on the shelf . . . .

“To be safe, father stood by me several times while I compounded the distinctive flavors to see that proper quantities were used of the right ingredients and in the correct order. . . .”

After its “Strategy for the 1980s” was announced, Coca-Cola introduced two new soft drinks: Diet Coke, now the third-largest-selling soft drink in the country, and the more recent Cherry Coke. The company also expanded its operations into the movie business with the 1982 purchase of Columbia Pictures Industries Inc.

National Heritage

But none of those marketing moves prepared the company for the outcry that was to follow the decision to give Coca-Cola itself a new taste.

Whatever other lessons may be drawn from Coca-Cola’s bold gamble, one thing is clear: Tampering with a product like Coke--which is not just a soft drink but part of the country’s national heritage--is a lot like fooling with Mother Nature.

More than any of its competitors, Coke is associated in the nation’s psyche with such nostalgic scenes of Americana as summer picnics, baseball games, backyard barbecues, soda fountains and high-school proms. Countless Americans also know it as the best thing to soothe upset stomachs, cure hangovers, baste hams and clean bugs off windshields.

“Changing the Coke formula is almost like threatening God, mom and apple pie,” said Christopher Geist, associate professor of popular culture at Bowling Green State University in Ohio. “In a sense, all this outcry is just a tempest in a soda-pop can. But it reflects a deep-seated feeling shared by so many Americans that they are at the mercy of producers and marketers.”

Last Stashes

Aficionados of the old Coke have been scooping up the last remaining stashes of their favorite drink wherever they can find them.

A Beverly Hills wine store laid in 500 cases of vintage Coke in the 6 1/2-ounce bottles and was selling it for $30 a case--triple the list price.

In Falls Church, Va., Razmik Bezik, a 25-year-old Armenian immigrant, plans to auction off a cache of about 1,000 cases of old Coke to the highest bidder. “It’s a matter of capitalism,” Bezik said. “You see an opportunity and you seize it.”

Restaurant owners also make up a sizable portion of Coke’s trade, and some have protested the flavor switch. “New Coke has an aftertaste, and if it doesn’t please me, it won’t please my customers,” said Pat Taylor, owner of Subway Sandwiches in Wheaton, Md. “I’m considering going to serving Pepsi, but they’re so busy they haven’t got back to me after two weeks. They’re selling!”

Bottle Battle

Coca-Cola officials had expected to encounter some public opposition to the new formula. After all, there are still die-hard Coke fans who have never forgiven the company for moving away from the classic 6 1/2-ounce green bottle.

“The little ole bitty Coke was the real Coke,” said Lewis Grizzard, an Atlanta columnist and writer. “When Coke came out with the 10-ounce bottles, people in my hometown said it didn’t taste the same.”

Despite Coke’s insistence that its decision to reformulate its flagship brand is final--with no room for appeal--lovers of old Coke hope for a corporate change of heart.

“If they brought it back, it would be one of the most brilliant marketing tricks ever,” said Marianne Philbin, 30, a Chicago museum curator.

‘Real Thing’

“They could change back and then have an ad campaign saying, ‘It’s the real thing.’ ”

With all the change in the bubbly brew of Coca-Cola, one legendary facet of the product will not change. That is the secrecy of the new formula, dubbed “Merchandise 7X-100” in honor of the coming centennial celebration of Coca-Cola.

“The original formula for Coca-Cola is one of the world’s best-kept secrets,” a company statement said, “and the new formula will continue that tradition.”

Collectors of Coke memorabilia view the formula change. See Your Collectibles, Part V, Page 20.

Also contributing to this report were Times researchers Diana Rector in Atlanta, Aleta Embrey in Washington, Wendy Leopold in Chicago, Siobhan Flynn in New York, Joanne Harrison in Houston and Lorna Nones in Miami.