Al Simon views Coca-Cola Co. decisions through the spigots of 3,500 soft drink fountain machines.
From his perspective as head of a company that supplies soda syrup and equipment to fountain vendors, the decisions first to retire and then to reintroduce the old flavor of Coke have put extra fizz into his business.
"They've had more free advertising than money could buy," chuckles Simon, president of Sodibar Systems Inc., which serves restaurants, bars, sandwich shops and cafeterias throughout the Washington area.
"All people talk about is Coca-Cola," said Mark A. Simon, vice president of the company founded by his father, Al.
Sales of Coke syrup are way up, but the transition from old to new Coke was not smooth, according to the Simons. And Sodibar expects to face new marketing challenges once the old formula becomes available, under the name Coca-Cola Classic.
"It's been quite a summer," Mark Simon said, walking through his Northeast Washington warehouse, surrounded by silver cylinders of soda syrup awaiting delivery.
Sodibar Systems, based in Washington, D.C., is one of dozens of small firms across the country that lease and service beverage equipment, and supply soda syrup and carbon dioxide gas to fountain vendors. A private, family-owned business, Sodibar does not release any sales figures but says it sells hundreds of thousands of gallons of soft-drink syrup -- which translates into tens of millions of 6-ounce sodas.
Al Simon has adapted to soda evolution for 38 years, ever since he started as a fountain mechanic who made and sold his own syrup. He has sold Coca-Cola syrup for 36 years.
When Coca-Cola first changed the flavor of the Real Thing three months ago, Sodibar was swamped with calls. The sweeter, and therefore thicker, syrup used to flavor New Coke was clogging fountain dispensers, producing Coke with less syrup in proportion to soda water.
"We had to adjust the valves on all our machines so more syrup would come through," Al Simon said. "Every fountain service company had to make the adjustment -- there was less syrup getting through, so less syrup was being sold."
Then came the complaints. "Constant complaints" about the New Coke, Mark Simon said. "Everybody was getting complaints."
"It wasn't the taste, it was mostly psychological," Al Simon said, adding later that he prefers the original formula. His sons, Mark and D. Brett Simon, who have worked for the company since they were kids and have worried their father with their avid Coke-drinking habits, both said they prefer the original, too.
Despite the complaints, Coke syrup sales "are higher than they've ever been," Simon said.
Now the company is getting "daily" calls from clients who want to buy Coca-Cola Classic as soon as it's available.
Coca-Cola said that some of its bottlers began producing Coca-Cola Classic last week, and that it should begin appearing on store shelves this week.
The Atlanta-based beverage giant hopes to increase its overall share of the $50 billion global soft drink market by offering different types of Coke to different consumers. Coca-Cola Classic will be the sixth beverage with the trademark name, joining Coke, Diet Coke, caffeine-free versions of Coke and Diet Coke and Cherry Coke, as well as the company's other drinks, which include Tab and Sprite.
But overall sales growth could be constrained by one mechanical fact of life: Most soda fountain machines have only four or five dispensers. To offer Coca-Cola Classic or Cherry Coke, "Something else has to be eliminated," Simon said.
Most soda fountains offer a cola, a diet cola, a lemon-lime soda and a fruit-flavored drink such as orange or grape, he said. Although many initially may offer both Coke and Coca-Cola Classic, most will eventually opt for one or the other, Al Simon predicted. "It wouldn't surprise me if they eliminated New Coke," he said.
Mark Simon predicted that fountain vendors will offer both new and old Coke, and that the losers will be Coca-Cola's Fanta flavors, which include orange, grape, root beer and ginger ale. Whatever loses, it will be a Coca-Cola product.
Fountain sales are one key to Coke's success. Fountain sales account for about one-third of Coca-Cola U.S.A.'s total sales, said Emanuel Goldman, an analyst with Montgomery Securities. Coca-Cola dominates national fountain sales with a market share of almost 50 percent, he said.
Coke's plan is to be acutely sensitive to consumer demand. The company will make all its products available to the local bottlers, fountain suppliers and other clients and let them sell whatever people want.
Whether their customers order new Coke, old Coke or both, the Simons believe Coca-Cola's strategy will work. They expect Coca-Cola sales to gain at Pepsi's expense, because the Coca-Cola product line can satisfy a wider range of taste preferences.
Industry analysts have praised Coca-Cola's plan, believing that Coke may have blundered into a marketing coup that will leave it way ahead long after the uproar has died down.
But Al Simon knows he faces some extra work if his fountain clients switch from Coke to Coke Classic. "It's more than likely we will have to adjust the valves again," he said.