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The new Coke will hit supermarket shelves almost exactly 99 years after Atlanta Pharmacist John Styth Pemberton concocted the mixture for the first Coke in a 30-gal. brass kettle in his backyard and developed the formula that Coke guards tenaciously. The company in 1977, for example, pulled out of India rather than give in to government demands that would have put the secret formula in the hands of outsiders. Among the known ingredients: water, caffeine, phosphoric acid, vanilla, various oils and essences and extracts of the coca leaf and the kola nut. The coca leaf got the early Coca-Cola into trouble with Government authorities, who claimed that the product contained a minute amount of cocaine. Company officials blamed that on poor processing, and the 1-part-in-400 amount was removed in 1903, leaving only non- cocaine extracts from the leaf.
In 1898, Caleb Bradham, 31, another druggist, produced a mixture of kola-nut extract and "rare oils" in his New Bern, N.C., pharmacy. His Pepsi-Cola was born, and the foundations for the cola wars were laid. Pepsi remained a distant second to Coke for nearly half a century. Not until the 1950s, when Pepsi switched its ad campaign from stressing price ("twice as much for a nickel") to emphasizing lifestyle ("The Sociables"), did it become a real contender. In the 1960s the firm broke new advertising ground with its Pepsi Generation and Think Young campaigns, aimed chiefly at the first baby boomers. In 1972 it started the Pepsi Challenge, which pitted the two colas against each other in blind testing. Pepsi invariably won--at least on camera.
Pepsi executives gloated over their V-C day, for Victory over Coke. From the Purchase, N.Y., headquarters of PepsiCo (1984 sales: $7.7 billion) came the gleeful statement: "Very simply, Pepsi, not Coke, has become the industry's gold standard." Said Roger Enrico, president of Pepsi-Cola U.S.A.: "You don't fix something that's not broken. There is no question that Pepsi's success is causing the change. The Real Thing is in real trouble." Tauntingly, Pepsi handed out free Pepsi samples in New York City only a few blocks from where Coke was holding its press conference to announce the change. As part of its celebration, Pepsi gave all employees the day off last Friday.
Beverage-industry analysts were inclined to agree, at least in part, with Pepsi. Coke still outsells Pepsi around the world by 2 to 1, but there have been some important signs of weakness in recent months. Coke's share of the U.S. market last year slipped from 22.5% to 21.7%, while Pepsi's went to 18.8%, by one expert's account as much as an .8% gain over 1983. Each point represents about $200 million in sales. Coke sells much better in vending machines, but has been losing ground to Pepsi in American supermarkets, where 45% of all soda is sold. Pepsi actually had a .3% lead over Coke in grocery- store sales for the last five months of 1984, helped in part by two commercials with Michael Jackson, for which the rock star was paid $5 million.
Some industry watchers say that Coca-Cola has been neglecting basic Coke in recent years in favor of low-calorie diet sodas, such as its Tab and Fresca, where most of the market's growth has been. The time had come, they say, for some vigorous new thinking and marketing for Coca-Cola's flagship drink, which still accounts for 65% of company sales.