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Coke's new taste was born of its efforts to produce diet Coke, a smashing success that since its introduction in 1982 has bubbled up to third place among U.S. soft drinks, with a 5.4% market share. In the course of developing diet Coke, says Goizueta, "our expert taste testers came upon a taste better than the old Coca-Cola. We had two options: We could do nothing, put it on the shelf and forget we ever developed it. Or we could change the taste and give the world a new Coca-Cola."
From 1981 to 1984 in 25 cities in the U.S. and Canada, Coke tested the taste on more than 190,000 consumers. The new Coke flavor beat the old one by 55% to 45%. When those same people were told what they were tasting, their preference for the new flavor was even more pronounced, 61% to 39%. The new flavor also won handily by as much as 56% to 44% against Pepsi, says one trade source.
Following the tests, Coke began making serious, but secret, preparations to introduce its new taste. The company even created some misinformation. Three months ago, Coke told bottlers that it would soon put a 100th anniversary label on its packages and that they should begin clearing out stocks of preanniversary bottles. This aroused the suspicion of Jesse Meyers, a Greenwich, Conn., industry follower who puts out a newsletter called Beverage Digest. Meyers felt that it was simply not like the forward-looking Goizueta to dwell on an anniversary. He did some checking and on April 19, four days before Coke's announcement, broke the story.
Coke's new taste fits into the management style set by Goizueta, a Cuban- born, Yale-educated chemical engineer who began working for the company in Havana in 1954. Since he took over as chairman in 1980, he has shaken up a firm that had become known for a stodgy, conservative style. In the 95 years before Goizueta took over, the basic Coke product had remained unchanged. In 1982 he ended a corporate debate that had been going on for years by introducing diet Coke. Old-timers had said that the company would be devaluing the name of its main product and cannibalizing its own sales by bringing out another Coke product, but he argued that the company could trade off the famous name. He was right. The following year, Coke launched a caffeine-free regular and diet Coke. In March came Cherry Coke. To counter slipping sales of Tab, its older diet soda, Coke changed the sweetener last year to a combination of NutraSweet and saccharin, giving it a crisper taste. The company received thousands of letters from irate Tab drinkers, but Tab's sales have since stabilized.
Although the company was confidently saying that the new Coke taste has been tested and proved, it still represents a risky move. The public is particular about taste, and it can quickly turn away from something that is no longer its old reliable. Many industry watchers last week were mystified, for example, as to why Coke would boost the calories of its old Coke by five, to 77 per 6-oz. serving (though it still has two fewer than Pepsi), at just the time when consumers seem to favor lighter tastes. Indeed, all forecasts point to a severe decrease in sales of sugar-based soft drinks because an aging, weight- conscious population is expected to prefer diet sodas.