The maker of Coca-Cola today introduced the first major change in Coke's legendary secret formula in its 99-year history.
The reformulation of Coke's flagship product is the latest salvo in the ongoing battle between Coke and Pepsi-Cola for the hearts, minds and taste buds of the world's soda drinkers, who comprise a $50-billion-plus market.
In recent years, Coca-Cola has rolled out Diet Coke, Cherry Coke and Caffeine-Free Coke in efforts to increase its share of the soda-pop market. In the United States, Coca-Cola products account for 37 percent of all soft drinks consumed; the percentage is even higher overseas.
The new taste of Coke, first happened upon by researchers while they were formulating Diet Coke four years ago, is somewhat sweeter and lighter than the old Coke. It also contains a couple more calories per serving.
Coke also is redesigning its famed red-and-white packaging, adding silver stripes and gold can tops to distinguish the new product
The company switched production from the old formula to the new today and expects to have the product available in two-thirds of the nation within three weeks, elsewhere in the United States by the end of May and around the world by the end of the year.
Coca-Cola Co. Chairman Roberto C. Goizueta, sounding like a wine connoisseur, described the new taste as "smoother, rounder, yet bolder. It's a more harmonious flavor."
Truth be told, several people who sampled the new product said it tasted a lot like Pepsi-Cola.
The people at Coca-Cola denied that emulating their arch-rival was what they had in mind. "It's not even close to Pepsi -- not at all," Goizueta protested.
But Pepsi officials were positively gloating yesterday. "After 87 years of going at it eyeball to eyeball, the other guy just blinked," Pepsi-Cola U.S.A. President Roger Enrico said in a full-page newspaper ad that began running today. "Coca-Cola is withdrawing their product from the marketplace, and is reformulating brand Coke to be 'more like Pepsi.' Too bad Ripley's not around. . . . He could have had a field day with this one."
Pepsi also attempted to upstage Coke's Lincoln Center press conference with a media event of its own -- a mini-street fair a few blocks away at Columbus Circle replete with clowns, a band and giveaways of balloons, T shirts and cups of Pepsi. A banner described Pepsi as "the real real thing," a play on Coke's longtime slogan.
The two soft-drink companies have thrown new products, billions of dollars of advertising and spokesmen such as Michael Jackson and Lionel Richie (for Pepsi) and Bill Cosby (for Coke) into the fray. But Coke's latest move may be the most radical yet.
"This is a very aggressive move on their part," said Emanuel Goldman, a beverage-industry analyst at Montgomery Securities in San Francisco. "There's no name like the Coke name, and if you come up with a better Coke, you're going to sell enormous numbers of it."
That's what Coke is hoping. "The American way is to want more, and we want more," Coca-Cola President Donald R. Keough said. And while Coke's overall sales have been rising, analysts say growth of the flagship brand has been stunted in the past couple of years by aggressive competition from Pepsi and the enormous success of Diet Coke, which was introduced in 1982.
Analysts said the change in formulas may be even more important in foreign markets than in the United States, because Coke will be able to use the new flavor as a reason for a fresh round of promotion overseas, where it doesn't have a single, uniform challenger such as Pepsi.
Coca-Cola is not embarking on this new course lightly. It is bringing out the new taste after months of extensive testing among 190,000 consumers around the nation and in Canada. According to Coke officials, those tests found that the new formula was favored 55 percent to 45 percent over the old in blind taste tests, 61 percent to 39 percent over the old in tests with the brand showing, and by a good-sized, but undisclosed, margin over Pepsi.
"Thousands of consumers across the width and breadth of this country have told us this is the taste they prefer," Goizueta said. "The decision, in fact, became one of the easiest we have ever made."
Asked whether company officials are concerned that the minority in the taste tests who preferred the old formula might take their thirsts elsewhere, Keough said, "Well, 39 percent of the people voted for McGovern."
Coca-Cola was brewed in the back yard of Atlanta dentist John S. Pemberton in 1886; since then, the formula, known as "Merchandise 7X," has been kept in an Atlanta bank vault, known only to a handful of company executives. It has been tinkered with over the years, most notably in 1903, when a slight trace of cocaine was removed, but the basic taste has never been changed, according to Coke officials.