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Classic Coke Is Outselling New Coke : Firm Delays Overseas Debut of New Coke; Net Off 3% in Quarter

Associated Press

Coca-Cola Co. confirmed Thursday that Coca-Cola Classic is outselling New Coke in the United States, raising new questions about whether the No. 1 soft-drink maker should have tampered with its 99-year-old formula in the first place.

In addition, Coca-Cola’s international rollout of New Coke, originally scheduled for this fall, has been delayed to next spring, said Carlton Curtis, a Coca-Cola spokesman. He denied that the overseas introduction has been canceled.

The company also reported that its earnings from operations fell 3% in the third quarter from a year ago--partly because of the national rollout of New Coke.

When Coca-Cola this spring unveiled a new formula to replace the original one, it sparked protests from consumers so fierce that the company brought back old Coke as Classic Coke in July.

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No Specific Figures

But then a new controversy arose as some loyal customers maintained that Classic Coke wasn’t the real thing despite the company’s insistence to the contrary.

Curtis said he didn’t know by how much Classic Coke was outselling New Coke in this country. “We don’t have specific numbers,” he said.

“We feel it (New Coke) will eventually outsell Classic Coke,” Curtis added.

He noted that sales of Classic Coke compared to New Coke vary in different U.S. markets, with Classic Coke strong in the South and Southeast and New Coke strong in the Northeast and West.

Overall, the reverse is true in Canada, where New Coke is outselling Classic Coke by two to one, he said. New and Classic Coke also are available in Puerto Rico, he said. But it’s too early to tell there how the sales will break down, he said.

Curtis repeated that the reason Coca-Cola introduced New Coke in April was to spur sales growth of the Coca-Cola brand. That strategy has been successful, he said.

“The Coca-Cola brand is growing more dramatically than it has in many, many years,” or at a rate of 9%, compared to 2%, he said.

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As for the international sales, Curtis said: “A number of markets are planned for the spring.” He wouldn’t specify, citing competitive reasons.

David Goldman, an analyst with the investment firm Dean Witter Reynolds, said the company confirmed for him about a month ago that Classic Coke is outselling New Coke 70% to 30% in the United States. Goldman said he believed that was, in fact, an understatement--that the breakdown is actually 80% to 20%.

“The real question is when do they kill the New Coke?” Goldman said. “If the volume on New Coke is really poor, then it becomes a cost not a profit.”

In its earnings statement, Coca-Cola said its third-quarter net income rose 11.6% over the same period a year ago.

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However, the increase came from higher non-operating income and a reduction in the company’s effective tax rate, the company said. Operating profit fell because of higher marketing costs, it said, citing the national distribution of Coca-Cola Classic and Cherry Coke plus additional support for other sugared products.

The company said net income for the quarter ended Sept. 30 totaled $196 million, down from $175 million in the same quarter of 1984.

Operating income came to $296.5 million, down from $305.9 million.


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