New Coke

New Coke was the unofficial name of a reformulation of the soft drink Coca-Cola, introduced by The Coca-Cola Company in April 1985. It was renamed Coke II in 1990 and discontinued in July 2002. By 1985, Coca-Cola had been losing market share to diet soft drinks and non-cola beverages for several years. Blind taste tests suggested that consumers preferred the sweeter taste of the competing product Pepsi-Cola, and so the Coca-Cola recipe was reformulated. The American public reacted negatively, and New Coke was considered a major failure. The company reintroduced the original formula within three months, rebranded "Coca-Cola Classic", resulting in a significant sales boost. This led to speculation that the New Coke formula had been a ploy to stimulate sales of the original Coca-Cola, which the company has vehemently denied. The story of New Coke remains influential as a cautionary tale against tampering with an established successful brand. After World War II, Coca-Cola held 60 percent of the market share for cola. By 1983, it had declined to under 24 percent, largely because of competition from Pepsi. Pepsi had begun to outsell Coke in supermarkets; Coke maintained its lead only through venues such as soda vending machines and fast food restaurants, especially McDonald's. Market analysts believed baby boomers were more likely to purchase diet drinks as they aged and remained health- and weight-conscious. Growth in the full-calorie segment would come from younger drinkers, who at that time favored Pepsi by increasing margins. Meanwhile, the overall market for colas steadily declined in the early 1980s, as consumers increasingly purchased diet and non-cola soft drinks, many of which were sold by Coca-Cola. This further eroded Coca-Cola's market share. When Roberto Goizueta became Coca-Cola CEO in 1980, he told employees there would be no "sacred cows" in how the company did business, including how it formulated its drinks. Coca-Cola's senior executives commissioned a secret project headed by marketing vice president Sergio Zyman and Coca-Cola USA president Brian Dyson to create a new flavor for Coke.