Coca-Cola's New Coke and the 79-Day Turnaround That Saved the Brand

April 23, 1985.

Coca-Cola made one of the most infamous marketing decisions in corporate history. They changed the formula.

"New Coke" was meant to halt Pepsi's growing market share. Internal tests said it would work. Taste tests were overwhelmingly positive. Over 200,000 participants preferred the new version. Data said yes. But sentiment screamed no.

Wall Street noticed instantly.

Shares of Coca-Cola dropped. Pepsi's stock rose. Analysts questioned the move. One headline read: "The Real Thing Gets Real Stupid."

Consumers revolted. Coca-Cola's hotline lit up with thousands of calls per day. Protest groups formed. One was called the Old Cola Drinkers of America. Their demand? Bring back the original.

Shelves were cleared. Black market sales began. People hoarded the original formula. Some stored dozens of cases in basements. Others shipped them cross-country.

The stock didn't collapse, but it was rattled. From April through mid-June, Coca-Cola underperformed the market. Investors doubted leadership. Pepsi, for once, felt like the better bet.

Executives insisted it would blow over. It didn't. The backlash worsened. Some Southern bottlers threatened legal action. Others just stopped producing New Coke altogether.

On July 11, 1985, just 79 days later, Coca-Cola caved. They brought the original formula back. "Coca-Cola Classic" was born.

KO shares responded.

By the end of July, Coca-Cola's stock had recovered fully from the New Coke dip. By Q4 1985, KO was up roughly 35% year-over-year. Pepsi's brief advantage had vanished. New Coke remained on shelves, but Classic did all the heavy lifting.

Coca-Cola survived the blunder. But Wall Street never forgot it.

Changing a product is one thing. Changing a symbol? That's risk.

In the end, Coca-Cola learned what shareholders had priced in from the beginning: a brand is more than a formula.

Filed under: General Knowledge