‘Classic’ to Be Sold Along With Widely Resisted New Formula : Coca-Cola to Bring Back ‘the Real Thing’

Nostalgia prevailed Wednesday.

Coca-Cola Co., stung by grassroots consumer resistance to its new, sweeter taste, said that it will resurrect the old one. Under the name Coca-Cola Classic, the old-formula drink will join the new one within the next few weeks.

“Thousands of dedicated Coca-Cola consumers have told us they still want the original taste as an option,” Coke spokesman Bob Cohn said. “We have listened, and we are taking action to satisfy their request.”

Coca-Cola, which is scheduled to hold a news conference today in Atlanta to provide further details, has not yet decided on a new container design for Coca-Cola Classic, but Cohn said that early mock-ups used the discontinued red and white Coke can, with Coca-Cola Classic printed on the side.

A nostalgic Wall Street immediately signaled its support of Coke’s decision. On the New York Stock Exchange Wednesday, Coca-Cola was the ninth most active stock, closing up $2.375 at $72.375 on trading of 1.4 million shares.

Even Congress took note. Sen. David Pryor (D-Ark.), speaking in the Senate chamber, hailed the Atlanta beverage maker’s move as a “decision of historical significance . . . proof that certain American institutions can never change.”

Coca-Cola spokesmen claim that 110 million Americans, nearly half of the nation’s population, have tasted the new Coke since its introduction on April 23.

But it was consumers such as Libby Lavine, a resident of Huntington Woods, Mich., who said she has squirreled away about 1,000 cases of the old Coke in her home, who forced Coca-Cola executives to reconsider their decision to kill the old formula.

“I can’t tell you how excited I am,” said Lavine, who started a campaign to bring back the old Coke formula by getting publicity in local newspapers and appearing on two Detroit television stations. “I’ve gotten close to 1,700 letters from people who wanted the old Coke back.”

Legions of vocal and longtime Coke drinkers like Lavine created a national stir about the formula change--the first widely publicized alteration in the soft drink’s 99-year history.

Some persons stockpiled the “old Coke.” Enterprising merchants sold cases of “vintage Coke” at double and triple the original price. Meanwhile, outraged “Cokeaholics,” who decried the alleged lack of “bite” and “zing” in the sweeter Coke, deluged Coca-Cola’s toll-free hot line in Atlanta with more than 40,000 calls.

Gay Mullins, a retired Seattle businessman, put up $45,000 to organize the Public Response Corp., a Seattle-based group dedicated to bringing back the old formula. The group collected 104,000 signatures and received more than 23,000 letters during its five-week existence.

‘Freedom of Choice’

“We feel wonderful,” executive director Frank Olson said. “We think consumers deserve freedom of choice. We are going out to celebrate tonight.”

For Dennis Overstreet, the owner of the Wine Merchant in Beverly Hills, the news about bringing back the old Coke came just in time. He was on the verge of paying to have 300 cases of the old Coke flown in from Rio de Janeiro for several die-hard Coke customers, who had agreed to pay $50 dollars for each case of 24 12-ounce cans.

“I’m totally flabbergasted,” said Overstreet, who bubbled with excitement at Coke’s announcement. “I guess they came to their senses . . . . I have never seen anything in retailing that I can compare to the demand for old Coca-Cola.”

Coca-Cola, which in 1984 held 36.4% of the soft-drink market with all of its products and posted $7.4 billion in sales, announced in April that it was altering the formula of its 99-year-old flagship cola and changing the type of corn syrup added to regular Coke to give the soft drink a smoother taste.

The move was prompted in part by increased competition from Purchase, N.Y.-based PepsiCo Inc., which--with the help of commercial endorsements from musicians Lionel Richie and the Jacksons singing group--had waged a multimillion-dollar advertising campaign to convince Americans that Pepsi was “the choice of a new generation.”

Last year, Pepsi was the only major cola brand to increase its share of the $21-billion domestic soft drink market. It captured 18.8%, compared to 18.2% in 1983, according to Beverage Digest. Coke’s share slipped to 21.7% last year from 24.5% in 1983, the Greenwich, Conn., trade journal reported.

Coca-Cola executives had hoped to reverse that disturbing trend by introducing the new Coke.

Tests conducted by Coca-Cola before the introduction indicated that 55% of 190,000 respondents preferred the new Coke. However, a recent survey by Leo J. Shapiro, a Chicago research firm, showed that 59% of soft drink buyers who have tasted it say that the original formula is better.

Coca-Cola reported that sales of Coke were 8% higher in May, the first month the new Coke was offered, than during the same month a year ago. But analysts say that the increase could have stemmed from a variety of factors, including the one-time sampling of the new beverage by curiosity seekers and the hoarding of both the new and old Coke brands.

‘Looking Like Heroes’

“The jury’s still out on whether Coke is going to be a hit or not,” said Larry Jabbonsky, editor of Beverage World, a Great Neck, N.Y.-based industry trade magazine. “I think (Coca-Cola Classic) will be a plus for the Coke system overall because they come out looking like heroes by giving the people what they want.”

Alan Kaplan, an analyst at Merrill Lynch in New York, countered: “They knew years ago they should have changed the (Coke) formula--that young cola drinkers like sweeter drinks, and that’s where they were losing to Pepsi. In retrospect, they should have just sweetened it without a lot of fuss. Pepsi, after all, has made several changes in Diet Pepsi over the last few years without big fanfare.”

“We are frankly not surprised about it,” Pepsi spokesman Ken Ross said of the Coke change. “It’s quite clear that people across the country don’t like the new Coke. What does surprise us is that they are bothering to keep this new Coke on the shelves at all.”

The proliferating number of soft drinks from Coca-Cola and other beverage makers will stiffen competition for shelf space. Although Pepsi now leads in supermarket sales, Coke has maintained its preeminence by amassing an immense lead in overseas distribution and domestic fountain sales.

May Be Losing Edge

But some believe that Coca-Cola might be losing its marketing edge.

James W. Harralson, executive vice president and chief operating officer of Royal Crown Cola Co., which recently began a $10-million advertising campaign, said: “Coca-Cola’s . . . decision to reintroduce its old formula . . . will confuse and frustrate consumers, who will be anxious to try a new brand entirely.

“Coke has hurt its credibility both with consumers and its bottlers, who must be wondering if a third Coke will be introduced when this plan also fails.”

Staff writers Kathleen Day in New York and Heidi Evans in Orange County contributed to this story.