Cola Wars (2019) - full transcript

Tonight, our program

is about the war
between Coke and Pepsi.

I'm a Pepsi person.
Always have been.

I hate it. It tastes like
watered-down Coca-Cola.

Coca-Cola. Like I said,
it really is the best.

For over 100 years,

Pepsi and Coke have been
locked in a battle

for the hearts, minds
and wallets of America.

Coca-Cola is the most popular
consumer product in the world.

Pepsi was always scrapping
to beat number one.

You tell me
which one you picked.



Okay. Pepsi.

The Pepsi Challenge was like
a bomb going off in Atlanta.

It was a shocking occurrence
in the soft drink wars

and in Coca-Cola.

Employing brilliant minds

and millions of dollars,

Pepsi and Coke
used every weapon possible

to destroy their competition.

Ladies and gentlemen,
Michael Jackson.

Michael leaned over
and said,

"I'm going to make Coke wish
that they were Pepsi."

And I remember thinking
to myself,

"This is going
to change everything."

They went into crisis mode.



What do we do?

Coca-Cola
is about to announce

what it calls the most
significant development.

We were pretty much
in disbelief.

The most significant

soft drink
marketing development

in the company's
100-year history.

We have to figure out
what this is.

How did a war between

two soda brands succeed
in capturing the imagination

of the entire country

and almost destroy
one of the most iconic symbols

of American culture?

Yes, for a bright taste
and a bracing sparkle,

for perfect refreshment
every time,

there's nothing like
ice-cold Coca-Cola.

Coca-Cola was the first cola

introduced to America,
created in 1886

by a pharmacist
in Atlanta, Georgia.

Pepsi-Cola came soon after,
in 1893,

and spent most
of the 20th century

trying to catch up
to Coke's early head start.

By the 1970s,

Coke was the undisputed leader

amongst all colas
across the globe.

Coca-Cola is sold

in 137 countries
as the world's

most popular soft drink.

Walk down the street
of any town,

any city, any burg,

and you would see
Coca-Cola signs.

It got to the point where
people didn't even notice

Coca-Cola signs anymore

because it was such a part
of the landscape,

just like you don't notice
every tree that you see.

I believe the story goes that
the two most recognizable words

in the English language are
"okay" and "Coke."

- Do you speak any English?
- No.

- How about a Coke?
- A Coke?

Coke. Drink. Coke.

Coca-Cola!

In a business where even

a one-point edge
in the market

was worth hundreds
of millions of dollars,

Pepsi and Coke
fiercely competed

for every ounce of soda
consumed across the world.

Pepsi's task was, in fact,
to be the underdog.

To be the rascally rabbit,

or "wascally wabbit,"
if you will,

to the Elmer Fudd
of Coca-Cola.

I think being the underdog
is the place you want to be,

because when you're number one,
you're in the lead,

you kind of sit on your laurels
and you don't really...

"Well, we're great,
we're wonderful,

there's nothing else
that we could possibly do."

But number two is always
scrapping to beat number one.

In the 1970s,

the competition was fierce.

RC Cola, Dr Pepper and others
were vying to be number two.

Pepsi knew that to even get

on the same playing field
as Coke,

they would need to make
a bold move.

And then, all of a sudden,

this sort of very local,
little advertising gimmick

a local Pepsi guy came up with,
called the Pepsi Challenge.

And the world changed.

In recent side-by-side

blind taste tests, nationwide,
more than half

the Coca-Cola drinkers tested
preferred Pepsi.

Which do you like better?

I prefer this one.

It has a more tangy taste.

Tell me the one
you preferred.

Pepsi-Cola.

You can believe that.

In Dallas, Texas,

we introduced a comparative
advertising campaign,

unique at the time,

where we were
a number-three brand.

Not just a number-two brand.
A number-three brand.

Coke, Dr Pepper,
the local brand, and Pepsi.

So with almost
nothing to lose,

we launched a blind taste test.

This is the taste.

This is the test.

Pepsi versus Coke.
The Pepsi Challenge.

I mean, production values
were low when I was a kid,

but this was startlingly low.

Like, come here,
we've got mystery beverages.

Would you be willing
to sit down and try them?

No! Coke would never do that.

Coke was winning

in the supermarkets
and the fast-food chains.

Pepsi's strategy:
win the supermarkets,

and the rest of America
will follow.

The Pepsi Challenge proved
Pepsi was on the offense

and unafraid
to take on the champ.

You tell me
which one you picked.

Okay. Pepsi.

What do you think of the
Pepsi Challenge now as a test?

- I believe it. I believe it.
- You believe it?

At first I thought, well,
it's not real, it can't be real.

And I actually... we did it
at our house with friends,

and more people ended up
picking Pepsi.

I was like, well, maybe this
is actually something real.

It's not just a gimmick.

Where I grew up
in Cincinnati, Ohio,

we loved the Reds.

We loved the Bengals,
and we drank Pepsi.

That's just the way it was.

When I saw the Pepsi Challenge

and I saw people
choosing Pepsi,

it just affirmed everything
about who I was.

I was like,

"They're making
the right choice."

Pepsi.

Do you want to do
a Pepsi Challenge?

Make a fool of myself, sure.

So the question before us is,

can the author
of "The Cola Wars"

tell the difference
between Coke and Pepsi?

I doubt it very much,
but I'll give it a shot.

It's... listening to these guys
talk about beverages,

you'd think they were talking
about the finest wines.

On a sip test basis,

Pepsi is a sweeter product
than Coke.

It has ten more calories
in a can than Coca-Cola does.

I don't know what I'm doing.

And on a sip basis,

Americans will tend to pick
the sweeter product.

Pepsi took this and used it
to their advantage.

Can I guess this is Pepsi?

Reveal.

You got it.

Oh, my God,
I can't believe it.

Well, it was one out of two,
you know?

All across this country,

people took
the Pepsi Challenge,

and Pepsi won, because...

♪ You know a winner
when you taste one ♪

It really caught
public attention,

and Pepsi Challenge
was the catapult

to a rivalry
that put Pepsi on,

really, the same playing field
as Coke.

Pepsi-Cola.

Even thought it was one
a one- or two-point advantage,

it put them on camera
next to Coca-Cola.

And suddenly they moved
from a second positioning

to an equal positioning
in the minds of the consumer.

That's really what the
Pepsi Challenge was all about.

By the end of the 1970s,

the soft drink business
was growing fast.

Fuelled by the intensifying
cola wars,

Pepsi was gaining real momentum
for the first time in history.

With so much money
and market share at stake,

Coke wasn't going down
without an epic fight.

I'm from Atlanta.
I was born in Atlanta.

I obviously grew up
drinking Coca-Cola.

I don't think I've ever known
a Pepsi drinker.

Now that I think about it.

This one.

Coke.

I was pretty sure
it was Coke.

I passed my Atlanta test.

My mother's not spinning
in her grave.

You're a Coca-Cola drinker,
is that right?

Yeah.

I'm gonna ask you
to take sip.

The Pepsi Challenge was like

a bomb going off
in Atlanta.

First of all,
it was rude, you know?

Again, that's just not the way
you did business.

You didn't call attention
to the other person's product,

and you certainly wouldn't
claim you were better.

Coca-Cola was outraged.

They said,
"This is unfair advertising."

And the whole marketing
community said,

"Why is Coke so concerned
about little Pepsi?"

Binoculars.
Pepsi Challenge booth.

And I'm looking
for the Coke drinker

the Pepsi guys
never show on TV.

He's tasting.

He's smiling.

He picked Coke.

Now, are we ever gonna
see this on TV? Ha!

So Bill Cosby, at the time,
of course, was Mr. Wholesome.

Family man wearing
the funny sweaters,

forgetting about what happened
later with Bill Cosby.

He was put into service
to be Coke's great defender.

Let the other guys
play the games.

You know the score.
Coke is it.

Yeah.

I remember the Bill Cosby ads,

but I don't remember them,

and that's how impressed
I was with them.

Everything goes with Coke.

Every advertisement
that Coke launched

to sort of counter
the Pepsi Challenge,

it was like they were
chasing Pepsi.

And you could tell
that they were worried.

In the early 1970s,

18% of soda drinkers
only drank Coke.

After the Pepsi Challenge
campaign,

that number plummeted to 4%.

Coke was bewildered.
It was the first time ever

the Real Thing
was feeling vulnerable.

Overall, Coke still had
about a 3-to-2 advantage

in the United States.

And outside the United States,
it far outsold Pepsi.

But in food stores in this
country in the late '70s,

Pepsi passed Coke.

The Pepsi Challenge
was so successful for Pepsi

that everywhere it was tried,
their sales increased.

There's great satisfaction
knowing that

more people are going
to a supermarket

and buying Pepsi
than Coke.

♪ You know a winner
When you taste one ♪

I've never had a Coke
in my life.

Sure.

Now I'm changing my mind.

Okay.

Hmm.

This one.

Yeah! Whoo!

I do prefer that one.

Brand loyalty was sort of
the dominant theme

of the Coke and Pepsi
competition.

You were either a Coke
or a Pepsi person,

and that was almost like,
you know,

Democrat/Republican
at the time.

Everybody was
one or the other.

People at Coca-Cola
take this pretty seriously,

and I think it's probably true
of the folks at Pepsi too.

It's hard to comprehend
at the time

how insular Coca-Cola was.

They didn't use
the name Pepsi.

They called it
"that other cola company."

Seriously.

Grown men,
head of corporations,

would not refer to Pepsi
by their name.

Anyway...

It was really rare to hear
the word "Pepsi" at Coke,

and as the leaders,

we thought that we needed
to focus on our brand,

and growth for our brand.

Coca-Cola immediately started
flowing through our veins.

And that's what happens
when you work at Coke.

To this day,
I would not drink a Coke

if somebody paid me to,

and my whole family
is like that.

My niece was in a McDonald's
when she was three years old,

and she was choking,
and my sister-in-law

was trying to give her a Coke,
and she wouldn't take it.

She said, "No Coke. Pepsi."

I mean, had I tasted it?
Yes, of course, you have to.

But have I really drank Pepsi?
Well, no.

If you walked into a
restaurant and ordered a Coke,

and they said, "I'm sorry,
all we have is Pepsi,"

you got up and you walked
out of that restaurant.

Our son hated
his kindergarten teacher

and wouldn't go to school,
and we couldn't understand why.

And we found out
it's because

she drank Diet Coke
at lunchtime.

He didn't want
to see her with it.

The 1980s.

A time of mass media
and mass consumption.

A perfect point in history
for an epic showdown

between two soft drink brands

that would capture
the attention

of an American public
ready to be wowed.

During the 80s,
the cola wars

was a major development.

It was still a world where,
if you ran your TV commercial

on the major
broadcast networks,

you would reach 90% or more
of the American public.

♪ It's alive and light ♪

♪ It's doing it right ♪

♪ It's a hit, it's a Coke
Coke is it ♪

That's why you could have
the cola wars,

is because you had everyone
experiencing it.

Everybody knew
what was going on,

and it was a common touchstone
for the entire population.

People are not talking about
tax reform or missile buildup.

They're talking about cola wars.
It's on everybody's minds.

And the interesting part
of the story

is that we don't know
the outcome.

So people will continue
to wonder about it.

There was a tremendous amount
of news coverage

about soda during the '80s,

because back in the '80s,

the sodas had
a really prominent role

in American life.

Billy Joel's
"We Didn't Start the Fire."

That's what comes to my head
when I think of the cola wars.

♪ We didn't start the fire ♪

He's listed all the horrors
of the 20th century,

and he's able
to keep it together,

even when JFK is blown away.

But when he gets to the
"rock-and-roller cola wars"...

♪ Rock-and-roller cola wars
I can't take it anymore ♪

There was a very specific
focus on those two brands.

- What you having?
- Coke.

- No Coke. Pepsi.
- Pepsi.

One Pepsi!

- One Pepsi!
- Hey!

There were
no bottled waters.

There were no sparkling juices.

There was just those two.
That was your choice.

Coke and Pepsi were spending

over $100 million per year
on advertising,

and the onslaught of ads
was paying off.

In 1980, the average American
was consuming three times

as much soda than they did
in the 1950s.

As much as 400 12-ounce cans
per year.

Soft drinks are the beverage
of choice of most Americans.

We drink more soda pop
than water.

43 gallons apiece this year,
versus 39.

And the market, a staggering
$25 billion a year,

is well worth fighting for.

It was the biggest
single beverage category.

Ahead of water,

and then coffee, and then tea,
and so on.

Every grocer in America
ran a soda ad every week,

and it was Coke or Pepsi,
not both.

Coming off the successful

Pepsi Challenge campaign,

speculation arose that
Coke might be in trouble.

Further complicating
matters for Coke,

longtime chairman
Robert Woodruff stepped down.

Robert Woodruff was,
for more than 60 years,

either the president
or chairman of the board

of the Coca-Cola Company.

And he ran the company almost
until the time he passed away.

He was often,
inside the company,

called "the boss."

And he very much was the boss.

In the early 1980s,

Robert Woodruff really passed
the baton to Roberto Goizueta

and stepped away for the first
time in 50 years.

Mr. Goizueta promptly
chose Don Keough

as his president and COO,
and they were partners

until they both retired
from the company.

They balanced each other
beautifully,

and they worked together
as a partnership

like I've never seen.

Don Keough was this, you
know, hail-fellow-well-met.

Great Irish, you know,
storyteller, slap on the back.

Roberto Goizueta
was a different character.

He was a quiet person.

He had, I think,
incredible drive

and incredible focus.

He was, without question,
the right man for the times.

Mr. Goizueta took a company
which, frankly,

had grown maybe
a little bit lazy

and wasn't as aggressive
as it might have been,

and was willing
to take actions

that were going
to shake things up.

And it was Roberto who then
had his own mantra, which was,

"There's no sacred cows."

I think because
of the cola wars,

because there was
such intense competition

between Coke and Pepsi,

that both felt like they really
had to raise their game.

Pepsi and Coke were locked

in a war for the taste buds
of America,

where the prize was billions
of dollars of revenue.

With underdog Pepsi
nipping at Coke's heels,

the world's most popular brand
was finally realizing

it had some legitimate
competition.

It was fun getting up
every day to do battle

with the number one brand
in the world.

You certainly
rolled out of bed

thinking that you had to bring
your "A" game to work

every single day,

or you weren't going
to win that day.

The battle between
Coke and Pepsi

was a battle for the heart
and soul of America.

When you are the leader,

you're always looking
over your shoulder

to see who's coming at you.

And then you have PepsiCo
trying to figure out

any way they can
to knock you off the top.

So for the first time,
there was the real possibility

that they might be able
to catch Coke.

Coca-Cola
is the most popular

consumer product
in the world,

and by far the largest-selling
soft drink.

Product bearing the trademark
Coca-Cola are asked for

in 80 languages,

and enjoyed more than
279 million times each day

in more than 155 countries.

Before the Pepsi Challenge,

Coca-Cola had enjoyed
a long history

of mostly
unchallenged success,

but this long-standing
dominance

also made the company
resistant to change,

especially when it came
to Coke's highly revered

secret formula.

The formula for Coca-Cola

is called Merchandise 7X,

a recipe so secret
that it's locked inside

this Atlanta bank vault,

so successful that
it's been tinkered with

but never dramatically
changed in nearly 100 years.

The secret formula has been

a really smart piece
of marketing

by Coca-Cola
for a long time.

The idea that this product is
so proprietary and so special

that the formula is kept
top secret.

Do I know the Coke formula?

No.

Do I know what most
of the ingredients are?

Yes, but I don't know
the recipe.

That is very tightly held.

Very few people
in the company

know what the formula is.

It's probably fewer
than a half a dozen,

and I think the notion
of the secret formula

is something that has passed
into legend.

I was told in just straight...

I mean, they would do it
with a straight face,

and you couldn't get them
to giggle about it...

that there were never more
than three people that knew it.

And they couldn't fly
on the same plane together.

Ah-ha.

How many ingredients
can there be in Coke?

It's like water, bubbles,

sugar.

There's no secret formula
to Pepsi.

Pepsi will tell you right away
what's in it.

Keeping the formula secret

was so important to Coke
that it sometimes came

at the cost of growing
their business.

Coke's problem is

the Indian
government's demand

that the American company
turn over

60% of its ownership
to Indians,

along with its technical
know-how,

including Coke's
secret formula.

The Indians knew
what they were doing.

They wanted to kick
Coca-Cola out of the country,

and so they demanded
the recipe,

the secret formula, the 7X.

It's just not going to happen.

So Coke left.
It was like,

"Okay, yeah,
we can live without that.

We're not giving up 7X,
that's for sure."

I grew up in India.

I remember as a young kid

coming to my first trip
to the U.S. in 1977,

and on the plane I took one
of those little cans of Coke

and smuggled it home with me,

because it was such
an iconic thing.

It's interesting.
I grew up in a Pepsi family.

Came to work
for the Coca-Cola company.

This is Coke.

I wasn't much of a soft drink
drinker when I was a kid.

But Coke had this ubiquity.
It was everywhere.

Stadiums, arenas.

There's no question
about it.

So the marketing
worked on me,

and I had this sense
of bigness and fun

associated with that brand.

That's Coke.

Yeah. Okay.

Coke has
a little bite to it.

From a taste perspective,
that was, for me, easy to tell.

Coke's formula

wasn't the only thing
it held in high regard.

When Coke joined the
diet soda trend in 1963,

it refused to use the name
Coke or Coca-Cola

for anything
but its flagship brand.

So as a result,
the world was given TaB.

♪ TaB ♪

♪ What a beautiful treat ♪

♪ TaB, for beautiful people
TaB ♪

TaB, it was very female.

TaB, TaB Cola,
for beautiful people.

And there were a lot
of female models.

You rarely saw a man
in any TaB work.

By the late '70s,
early '80s,

TaB was getting
a little soft.

Sales were a little stale.

A little tepid.

And so Coca-Cola
realized that, you know,

what we need to do is
leverage the Coca-oca-la bran.

In the ongoing struggle for
shelf space and market shares,

both Coca-Cola and Pepsi

have now moved to increase
their battle supplies.

That was what was exciting
about the '80s at Coca-Cola.

Led by Roberto,
implemented by Don,

was this, "I'm sorry, we can't
be the way we were in the past.

"We've gone to sleep.
We need to wake up.

And everything's on the table."

To counter the strides

Pepsi had made in the 1970s
with the Pepsi Challenge,

Coke decided it needed
to launch a new weapon

in the fight against
its challenger.

Ladies and gentlemen,

welcome to the world premiere
of a great new soft drink.

The world premiere
of Diet Coke.

♪ Introducing Diet Coke ♪

And the company invested

a tremendous amount
of money at the time

in a product launch,

both in terms of advertising
and promotion

to draw as much attention
to it as possible.

Hey, you know what's new?
Diet Coke.

And you're going to drink it

- just for the taste of it.
- Yeah.

It was a risk,
because if it didn't work,

it would have dragged down
the Coca-Cola brand name.

Coke had to think
long and hard

about bringing out Diet Coke,

because it would have been
the first product

ever in the history
of the Coca-Cola Company

that had the word "Coke" in it
but wasn't Coke.

Roberto Goizueta
was absolutely serious

when he said
"no sacred cows."

And Diet Coke was actually

probably the largest
single example

of sacrificing a sacred cow.

Have you noticed how many men
are drinking Diet Coke?

- You like it?
- It tastes great,

and I don't even drink
diet drinks.

And if you think about it,
in the '80s,

that's when you suddenly
had the emergence, also,

of light beers,
and light beers

were marketed not
just to women, but to men.

And so it became acceptable
for men to drink

reduced-calorie drinks.

And Diet Coke
was right there with it.

Diet Coke, I think,
made them realize

literally if it was
not hogwash

and it had the name
Diet Coke,

people were going
to drink it.

And if it tasted good,
you had a winner.

To this very day
I can remember getting

my first Diet Coke and went,

"Wow, gee whiz,"
you know?

I knew it was coming out
and I couldn't wait

to somehow get my hands
on it.

The amazing thing
about Diet Coke

was that on the day
that it was introduced,

the day it started,

it became the third best-selling
soft drink in the world.

Hello, I'm Brian Dyson,
president of Coca-Cola U.S.A.

To you who bottle Diet Coke,

to you who load and drive
the trucks,

and to you who sell
and serve Diet Coke,

congratulations.

You've just made Diet Coke

not only America's
leading diet drink,

but the third-biggest
soft drink of any kind.

By the end of 1983,

Diet Coke was the
number-one-selling diet soda.

But even more impressive:
within a year,

it replaced 7UP

as the number three
overall soft drink

in the United States.

For us,
it wasn't good enough

just to be the number one
diet soft drink.

If we're going to put the brand
"Coke" on a diet soft drink,

we felt that brand,
that product,

should be number two
only to Coca-Cola.

So from the very beginning
in 1982,

it was always our objective
and our goal

to make this the number two
soft drink.

Diet Coke grew so fast
in '82 through '89,

and when I joined the company

it was the fastest-growing
soft drink around the world

as we started to bring it
into other countries.

Diet Coke stepping out

and putting
the flagship name on it

said this is moving into
a new time.

It was more contemporary,

and it gave it a face-lift.

So Pepsi and Diet Pepsi
had some work to do.

In 1983,
Diet Coke bumped Coca-Cola's

total market share
by two points,

while Pepsi's dropped
nine-tenths of a point.

It was the first time
since the late 1970s

that Coca-Cola was growing
faster than Pepsi.

Whatever Coke was doing,
they were doing it to hit us,

and whatever we were doing,
we were doing to hit them.

Every new idea, every
strategy, every tactic,

every package, every product,
every piece of copy

was clearly to win,

and the win had to be taking
share from the other guy.

The soft drink business

was a multi-billion-dollar
industry in the 1980s.

The stakes couldn't be higher
for Coke's new leadership,

as they were about to face
a new adversary

at the helm of Pepsi:

a self-proclaimed cola warrior
named Roger Enrico.

Roger was
an exceptionally talented

sales and marketing executive

who was the head of sales
and marketing

at our company-owned
bottling plants,

who later went on to become
the CEO of PepsiCo.

He was only 38
when he became president.

He took big risks.

He was bold in his actions.

Sometimes...

it was almost like, really?

Are you really going
to take a billboard

outside of Coke
headquarters?

I mean, he wasn't shy
about it.

Most CEOs of major
corporations

don't involve themselves
in the advertising.

But when a CEO is involved

as much as Roger was

in the advertising product,

it does change the dynamic
considerably.

As Enrico came to power,

and just such
a terrific insurgent,

I mean, Coke's driving down
the interstate, you know,

with their eyes fixated
on the rearview mirror,

and every move he'd make,
they'd make a move.

So he was really dictating
the dialogue.

As Roger used to say,

"A thousand small things,
even if done very well,

"would never add up
to something big.

"But a few big things,
if done very well,

could change the game."

Business is all about a lot
of very ordinary people

who, if they're lucky,

get a chance to do
extraordinary things.

And it's all about people
trying to make something

better than the other guy,

and having a good time
while they do it.

As a strong number two,
they were in a position

to bring a full-frontal attack
against number one.

And he was the guy to do it.

With Coke riding high

on the success of Diet Coke,

Pepsi needed to get back
on the offensive.

If anyone was ready
to fight Coca-Cola head-on,

it was Roger Enrico.

When I became president
of Pepsi two years ago,

I thought this job
would be fun.

But this is getting
ridiculous.

In 1983 you were
38 years old.

You've been with the company
about 12 years.

You want to describe those
years since you took over

and this whole war
has been raging?

Well, they certainly
have been exciting years,

there's no question
about that.

A lot of tension
and a lot of fun.

Roger Enrico deserves
his title of cola warrior.

He was this constant,
"roll the dice,

take the hill,
hit the beaches" kind of guy.

And the nature of the beast
was Pepsi-Cola attracted people

who were willing to do that,
you had to do that,

or you weren't going to win
versus Coke.

You had to be very aggressive.

Imagery is extremely
important,

and for us it has been
the difference

between being an also-ran
and being a leader.

Roger was unapologetic

in his effort to make things
happen in big ways.

He actually wanted to
go after the next big idea.

He wanted to put Pepsi
on the map.

He was a competitor,

and he knew that
the youthful generation

was one of the ways
to do that.

And it was certainly
one of the best ways

to take market share
from the leader, Coca-Cola.

Major advertisers today who
want to speak to young people

are looking for that image
association

with their contemporary heroes,

and rock stars have become
contemporary heroes,

particularly
in the last decade.

Jay Coleman was a colorful
New York entrepreneur

who had figured out
that the time was right

to merge the fast and furious
world of rock and roll

with the more staid world
of consumer products.

Jay Coleman's strategy
was to try and call executives

after he thought the secretary
had left for the night.

But that wasn't
one of my M.O.'s

I was working
until Roger left.

And the phone rang late,
and I picked up the phone.

And he said,
"I want to talk to Roger

about a potential
sponsorship."

And I said, "With who?"

And he said, "Well,
I'd like to speak to Roger."

And I said, "Well, unless you
tell me who is the person..."

And he said, "Well, have you
heard of Michael Jackson?"

And I said, "Hold on."

Michael Jackson was huge
in 1984, he was the coolest.

In the past year,
Jackson has become

one of the most successful
recording stars

in the history
of the industry.

He kept asking Jay,

"How much is this going
to cost me?"

And Jay kept giving
his pitch.

And then he would say,

"Jay, how much is this
going to cost me?"

And he said, "Five million."

And I thought Roger
was going to drop the phone.

At that time,

it sounded like an outrageous
amount of money

to be paying a celebrity,
but just the idea

and the newsworthiness
around it was tremendous.

There were no big debates.

We didn't go out
and do research.

We didn't spend months
figuring out,

"Is this a good idea
or is this a bad idea?"

We just did it because Roger
thought it was a good idea.

Well, I must say, the press
conference in New York yesterday

to announce that musical
reunion of the Jacksons

was a media circus.

Promoter Don King,

better known for his boxing
shows and his hairdo,

was the ringmaster.

The news was that Michael
and his five brothers

will record their first album
together in eight years

next February, and then
they'll go on the road

to promote it in May.

Michael was very excited
at the press conference.

He leaned over in
Roger's ear and said,

"I'm going to make Coke wish
that they were Pepsi."

The press conference
was a very big idea,

but then the next day there
was pictures of Don King.

You know, many pictures
of Michael Jackson.

There were stories
about the sellers...

not a word about Pepsi-Cola.

Not a word.

That was not a good day
back at Pepsi.

So the idea we had was

let's leak somehow,
to somebody,

that, do you know how much
Pepsi spent?

They spent $5 million.

Roger Enrico, president
and chief executive officer

of Pepsi-Cola,

he's the guy who bet
$5 million

of his company's money,
a history-making amount,

for a celebrity commercial
contract.

That was the newsmaker,

was how much money we
had paid Michael Jackson.

It was like,
are you out of your mind?

Of course, in the
development of the campaign,

we had jingle writers
composing music

that they thought
might work well in the spot.

And Michael basically said,

why would you want to use
some made-up music

when you can use my music?

We know the song
is "Billie Jean,"

but he's not singing
"Billie Jean."

- What are the words?
- No, he certainly isn't.

He's singing Pepsi lyrics

about the new
Pepsi Generation.

And that's what powered the
two commercials that we shot.

One on the back lot
at Universal Studios

and, of course,
one at the Shrine Auditorium.

The first take involved
the choreography

that had been planned for
and agreed to,

where his brothers came out
and started singing

the opening lines
to the commercial.

A curtain revealed
a staircase.

Michael was at the top
of the staircase.

And his choreography was that
he would come down the steps,

join his brothers
at the microphone

and continue
with the commercial.

As he left each step,

the choreography dictated

that little explosives
took place on the steps

that he left.

The first take went off
without a hitch.

The final take,
Michael had been asked

to pause just an extra beat
before dancing down the stairs.

Oh, Michael!

Rock star Michael Jackson was
injured tonight in Los Angeles.

Jackson was rushed
to the hospital last night

after a bizarre accident
set his hair on fire

while he was filming
a television commercial.

So the director wanted
just one more take,

and Michael came down
those stairs.

His hair ignited.
It was pretty bad.

It was, how can this happen to
the greatest performer today?

You know, he's going to burn
himself at a Pepsi commercial.

He didn't know
he was on fire.

He was still dancing,
you know.

And I guess he felt it,

and he started
patting his head.

Seemed like he didn't know
what was happening.

Like something was in his hair
and he started shaking it.

And it was all blue and white.

Girls started crying,

and all the lights
went off immediately.

We thought it was part
of the act that was going on.

But actually,
it was a tragedy.

Jackson managed a weak wave

to his fans as he was carried
into the burn unit

of the Brotman Medical Center
in Los Angeles last night.

The word was out there.
He was disfigured.

He's, you know,
never going to dance again.

He's never going to sing again.

His whole head
went up in flames.

Despite the hysteria
that greeted him,

Jackson's second-
and third-degree burns

were not serious.

He has a palm-sized area burn
on the back of his scalp.

They got a lot of attention
with the hair-on-fire thing,

because they almost killed
our greatest pop star.

The more word
that's out there

is the more excitement
it builds.

Everybody wants to see what's
going on, what's going on.

MTV presents

another exclusive
world premiere...

commercial?

MTV was hot,

and all of a sudden
all our commercials

are going on MTV for free.

Oh, my gosh, I do remember
the first time

that I saw the ads.

I was actually
sitting at my desk.

And I remember
thinking to myself,

this is going
to change everything.

This is going
to transform this brand.

It's going to transform
this industry.

This is it.

♪ You're a whole new
generation ♪

♪ You're dancing
through the day ♪

♪ You're grabbing
for the magic on the run ♪

♪ You're a whole new
generation ♪

♪ You're loving what you do ♪

♪ Put a Pepsi in the motion ♪

♪ The choice
is up to you, hey ♪

♪ You're the Pepsi generation ♪

It was magical.
It was something that...

I have goose bumps
just thinking about it.

♪ And feel the Pepsi way ♪

♪ Taste the thrill
of the day ♪

♪ You're the Pepsi... ♪

It really set the stage

for how big-time
marketing campaigns

would be viewed and covered
and thought of,

not only just for the branding
opportunities,

but also as an actual
news event.

Because of Michael,

America now looks to Pepsi
for a signal of what's new,

what's hot
and what's contemporary.

It was the single biggest
marketing moment

in the history of Pepsi-Cola.

It was a game-changing idea,

whose ripple effects
are still being felt today.

♪ I'm bad, I'm bad ♪

The controversy
around Michael Jackson's

personal life wouldn't
emerge for many years.

In 1984, he was indisputably

the biggest pop star
in the world.

Pepsi's partnership with him

would shake up
the entire industry,

and allow the underdog cola
to push Coke's overall lead

to under 5%.

You know, we're a whole new generation.
A mere sliver of what it used to be.

A generation of new rhythms,
new feelings, new styles.

If you think about
the celebrity culture

that we live in right now,

you can trace its roots
right back

to that first Michael Jackson
commercial for Pepsi.

I think that Michael Jackson
doing Pepsi commercials

opened up to
the entertainment community

that doing commercials
were going to be okay,

that they were going
to be treated

with creative respectability,

and that in many cases,

it would be good
for their career.

♪ The beat of
a generation... ♪

Lionel Richie
was the "it" man

in the music industry.

And so having Pepsi
kind of tied in

with the biggest
and the best

was always something
that we were looking for.

It became,
in the industry,

the crown jewel.

Everyone wanted to go out
and to get Pepsi

to kind of basically
endorse them.

- ♪ The choice is mine ♪
- ♪ Satisfies me ♪

♪ Choice is mine ♪

Advertising is meant
to portray Pepsi

as on the leading edge
of what's happening today,

and we're merging the images
of these fine stars

with the image
of our product,

and we think it's a lot of fun
for the consumers,

and it certainly
works for us.

Instead of advertising
"we taste better,"

or "we're a great brand
because..."

Pepsi was advertising
a feeling.

And they really tapped into
youth culture

with the Pepsi Generation.

The creation and the launch
of the Pepsi Generation

was really the first
national ad campaign

to celebrate the user
of the product

instead of the product itself.

♪ We're a whole new ♪

♪ Generation ♪

The strategy was really
to reflect the user.

What did the product mean
as a symbol,

or as we call it,
a necktie?

The expression "necktie"
came from the idea

that a necktie
has no real purpose.

The purpose it serves is to
reflect the person who uses it,

which then became
the breakthrough.

Remember that we're
talking about

essentially two brown
sugar waters.

So layering on a personality
onto water was a task.

Hi, I just moved in
next door,

and I was wondering,
could I borrow a Diet Pepsi?

Diet Pepsi?

Sure.

The job of the challenger
is to say,

"Well, you're
the establishment.

"If you want to be young
and new and hip and vibrant,

"you need to go against
the establishment.

"Go against your
mom and dad's brand,

"and go with my brand.

I'm the teen brand.
I'm the youth brand."

And that's exactly
what PepsiCo did.

Do you want me
to do a spit take

where I just am disgusted
and spit it straight at you?

Pepsi Challenge,
take two, marker.

Smells delicious.

Really caramel-y.

They both have a lot...

different things
going for them.

This one's sweeter.

This one's caramelier,
sweeter.

This one has...

it's more exciting,
for sure.

This one's much tamer.

Much softer.

A little darker
and heavier.

I think I'm going to go
with this one.

But I like them both.

I do think it's Coke.

But they're both delicious.

I could see why people
could drink a lot of this.

By the mid-1980s,

coming out of
the Michael Jackson campaign,

Pepsi had firmly
established themselves

as the edgier,
more youthful cola.

But would that be enough
to topple

the traditional,
iconic Real Thing?

Pepsi was
the challenger brand.

They were number two,

and so you do things
to get attention.

Certainly Pepsi has always
been a little more outrageous

in terms of some of the things
that they do.

It's worked on occasion.

Coke wants to be absolutely
contemporary,

but you don't want to offend
your older consumers.

Coke has always had to stay
more realistic.

♪ Look out, America
see what we got ♪

♪ We got the Real Thing ♪

We relied on the same levers
for a long time,

and I think Pepsi
coming into the game

in a more aggressive way
helped us get stronger.

Well, you could look
at the Coke and Pepsi battle

as professional wrestling.

Essentially,
these guys would go up

and beat each other up
in the arena,

go back down to the locker
room, dust themselves off

and divide a couple
of billion dollars,

because they were growing the
market with that competition.

They were creating
the market.

That kind of competition
defines...

well, it defines everywhere,

but it certainly
defines America.

Coke and Pepsi,
not satisfied

with saturating this planet
with cola,

will now battle it out
in space.

After weeks
of what was described

as highly sensitive
negotiations,

NASA has agreed
to carry both colas

on the next space shuttle.

In 1985,

Pepsi and Coke would take
the cola wars

through the stratosphere,
each vying for the claim

of first soda in space.

Apparently, Pepsi had been
talking to NASA

about the possibility
at some point

of being the first to have
their soda pop in space.

And suddenly Coke was the one
going to space,

and that didn't make Pepsi
too happy.

We were very excited that we
were gonna be able to do this,

and in effect become the first
soft drink in outer space.

I think this is an indication
of how serious

both sides are taking this,

that they'll leave
no stone nor star unturned.

The challenger always thinks
he should be getting

what the number one
should be getting,

and the number one thinks, no,
I'm number one,

so I get to be the first one
to be tasted in space.

At a news conference
yesterday,

Coke and Pepsi
representatives squared off

over their much-publicized
shuttle challenge.

We'd enjoy the free
advertising,

and I'd also take it
a step further

and I wish they'd do
a taste test up there.

If they want to taste...
their tasters,

that's NASA's job,
I don't care.

We know we'll come out ahead.

They said that Coca-Cola's
zero-gravity container

worked better than Pepsi's,
but as for taste,

well, both soft drinks lost.

The reason?
No refrigeration.

As Commander
Gordon Fullerton said,

"Warm cola is not on anyone's
list of favorite things."

Pepsi and Coke's quest

to become the first giant sip
for all mankind

may have ended
in a stalemate,

What a wonderful idea, Helen,
to serve Coca-Cola at home.

While Pepsi dedicated

tremendous resources
to their campaigns

with top musicians,

Coke had long enjoyed
an unchallenged dominance

on the big screen.

Are you okay?

Too much excitement, huh?

Want a Coke?

Coca-Cola as a brand
and the imagery,

the signage,
the vending machines,

the bottles have always
been a part of the movies.

It was marketing
in its pure form.

It was integrated marketing
before there was such a thing,

because it was in the content,
but it was authentic

to the way the brand
was enjoyed.

Riff, do you ever
stop to figure

how many bubbles there are

in one bottle
of this here soda pop?

They would come
to Coca-Cola.

We had a guy out there
who would read

all the scripts that were sent
to him, saying,

"Gee, if we had Coca-Cola here,

"if we had a sign here or
a cooler there in the movie,

that would help establish
the period."

So we became a part
of that pop culture,

which also helped
build the brand.

Roger was on a plane
and he was watching a movie,

and he saw Coke in a lot
of the scenes in the movie,

and couldn't understand
why it was that Pepsi

wasn't ensconced
in that world.

And so he worked with a company
called Davie Brown,

and their effort
was really about,

how do we get product placement
in movies?

Are you going
to order something, kid?

All right,
give me a Pepsi Free.

You want a Pepsi, pal,
you're gonna pay for it.

For Pepsi,
the big breakthrough

was "Back to the Future."

Pepsi became not just
product placement,

but it became almost like
a character in the film.

So when Michael J. Fox
was in "Back to the Future"

and Pepsi had all that product
placement in the movie,

it was a home run.

That movie kind of opened
everyone's eyes

to a new way of promoting
the brand,

and also kind of chipping away
at some of the work

that Coke had been doing,
and probably, quite frankly,

taking for granted,

because they'd just been
doing it for so long.

Yeah, I think it was
a deliberate strategy

and a statement
about their brand.

But probably 90% of the films
that had drinks in them

had Coca-Cola that year,
so I think we were just fine.

Look at all the junk food.

Not only were the cola wars

being waged in major
Hollywood films,

eventually soda commercials
themselves

became mini movies.

We're ready to send you
back in time.

Now remember, you're going
back before television.

Even before soft drinks.

There was this sort of
renaissance

of advertising in the '80s,

where they started hiring
these big-name directors.

People like Ridley Scott.

I mean, "Spaceship"
was a commercial

that was never done before.
It was like a mini film.

We had commercials that they
couldn't even dream of.

Especially the "Archaeology"
commercial.

What is it?

I have no idea.

Imagine a future where not
only was Pepsi outselling Coke,

but Coke didn't even
exist anymore,

which was really much more
of a hard chop to Coke's ribs.

I've discovered
a real pop star.

Pepsi was always poking
at Coca-Cola.

Coca-Cola decided
the best way to respond to that

was to take the number three
soft drink brand, Diet Coke,

which was growing much faster
than Pepsi or Diet Pepsi,

and position our Diet Coke
business right against Pepsi,

and thereby separating
regular Coke from that battle.

And I think we did that
very, very successfully.

I'm just not satisfied
anymore.

For years, it was sweet
with a capital S.

But now I'm changing
more than my clothes.

I've discovered something
that fits my style.

Well, there couldn't
be a challenger

if there weren't a champ.

And I had learned
from politics

that when you
position yourself,

you should also try
to position the opposition.

Up until that point,

it was pretty rare for brands
to name their competition.

Coke and Pepsi pretty much
let down the guard,

and they no longer
were just gonna be

sort of dignified
with each other.

They were actually
going to kind of

go to battle
on the airwaves too.

We've got numbers
one and three.

We've got Pepsi up a tree.

- Sound off.
- Diet Coke.

- Knockoff.
- Number two.

The war
between Coke and Pepsi

was reaching a fever pitch,

but no one anticipated
the way one company

would escalate the war
in 1985,

shocking the world
with a game-changing strategy

even their own employees
never saw coming.

Here we go.
You ready?

This is really easy.

This is Pepsi, and this is what
I drank growing up.

And this is Coke.

I don't even have to taste
the other one.

♪ Open up ♪

♪ Look around ♪

♪ People's tastes
are changing ♪

Because of the intensity
of the advertising

and the marketing
and the presence,

it created a connection
between consumers.

They were stronger than you
typically find with products.

And so, yeah, Coke drinkers
were Coke drinkers,

and Pepsi drinkers
were Pepsi drinkers.

You were a Coke person,
and Pepsi people were bad.

Like, truly morally inferior.

And you would not
cross that line,

no matter how thirsty
you were.

I didn't know
any Coke people.

I didn't want to know
any Coke people.

They were traitors to me.

In fact, I'm surprised we
didn't just divide the country

and put our own sort of
pop wall up.

Coke people up there,
Pepsi people over here.

It felt like that.

So no letters on these,
I see.

Oh, is it?

Do I like X letter better
or Y better?

It is interesting
that once you know,

you can taste the differences.

But when you don't know,

it's really hard
to taste the difference.

Wow. Both really good.

I almost want to say
it's the same thing,

but I think that's Coke
and that's Pepsi.

- Coke, Pepsi.
- Now you can reveal.

Wow. That's interesting.

I just like Pepsi.
I've always liked Pepsi.

Used to drive 4 or 5 blocks
out of my way to get Coca-Cola.

What you had was carbonated,
flavored sugar water.

No one needed this.

Had Coke and Pepsi
never been invented,

life would have chugged along
quite well without them.

These were
unessential products.

And so consequently,

that genius behind
all of this

is that the advertising
was creating

emotional bonds
with consumers.

Oh, I wouldn't have
nothing else.

Coca-Cola, like I said,
it really is the best.

By this time you had Pepsi
fully ensconced

in the northeast.

You had Coca-Cola
from the south.

You had huge geographical
preferences within the brands.

Then you have these ads where
they're going after each other

in a way that really said
to consumers,

"You needed to pick,"
and people did pick.

At the peak of Coca-Cola's

mid-century dominance,

their market share
hovered around 60%

of total soft drink sales.

But by 1984,

their share dropped
to just under 22%,

in large part due to Pepsi's
unrelenting insurgence.

For Coke,
the Pepsi Challenge

combined with the Michael
Jackson advertising campaign,

caused them to say,
"We've got to do something."

The sun will rise
in the west

and set in the east
before Pepsi outsells Coke.

So they went into crisis mode.

What do we do?
How do we fend this off?

The top brass
at Coca-Cola needed someone

with bold ideas to drastically
shake things up.

Marketing expert
Sergio Zyman

was the perfect man
for the job.

I don't think anybody
would invite Sergio to lunch

unless they wanted things
shaken up.

I mean, he's just...

"iconoclastic"
would be a euphemism.

Sergio Zyman was one
of those rare individuals

that actually served time on
both sides of the battle lines.

He started at Pepsi
and ended up at Coca-Cola.

Sergio recognized
that all the news

over the last five or ten years
had been about Pepsi.

Somehow, Coke had
to re-establish themself

as the leader.

Even since the beginning
of the Pepsi Challenge,

when it became clear to Coke

that on a sip basis
Pepsi could beat Coke,

there'd been word going on
among the scientists

and among our market
research group

to look for a product
that was better.

And they started thinking,

"I wonder if we should
tweak our formula?"

"If people are preferring
the taste of Pepsi

"because of the sweet profile,

maybe ours needs
to be sweeter too."

In February of 1985,

Sergio Zyman called one of his
quarterly strategy meetings.

My boss at the time was
a fella named Tony Tortorici,

and for several months
he seemed to be

somewhat secretive, and wasn't
sharing certain things,

so knew something
was going on,

but we didn't
know exactly what.

It was like taking
a blood oath.

This was a full-scale
top secret event.

When we walked
into the conference room,

we learned we were there
to talk about

the launch of a new Coke.

I was completely
taken by surprise.

The idea that we needed
to change our formula

in order to compete
successfully

in the marketplace,
it was a shock.

But I sat there
with my mouth open.

I thought, "Wow."

The formula of Coca-Cola
was always seen as something

that would never change,
and it never had.

The need for secrecy
was great.

It's like being brought into
a fraternity or a sorority.

And you're like, wow, look at
all these high-powered guys.

And then they say,
"And guess what we're gonna do.

We're going to change
the taste of Coke."

You don't go, "Well,
that's the stupidest thing

I've ever heard of."

You probably just sort of
swallow your tongue and go,

"Oh, my God, I finally made it
in time to jump off a cliff."

When you're talking about
a product like Coca-Cola,

the idea of new packaging,
new product,

new point of sale materials,
distribution,

all being created
and kept secret,

it's almost too much
to ask for.

In April 1985,

Coca-Cola was finally ready
to officially launch

their top secret weapon,

hoping to put an end to the
cola wars once and for all.

It was an invitation.

It came out late
on Friday afternoon.

"You're invited
to New York Tuesday,

"when Coca-Cola will make
the most momentous announcement

in the history of soft drinks."

And I just started calling
everybody I knew at Coca-Cola.

I got the story,
and we ran with it Saturday.

And then, of course,

by Tuesday everybody
and their brother had it,

including Pepsi.

Roger received
a phone call one night

that there was going
to be big news,

and that it was going
to be something that would

completely, you know,
blow everyone away.

He called Joe and said,
"Joe, we have to get on this.

We have to figure out
what this is."

We had started hearing
rumors about this new product.

Well, that was the scariest
thing I can ever remember.

Coca-Cola is about
to announce what it calls

the most significant
development in its history.

I was with Roger,

and we were all pretty much
in disbelief.

The most significant soft
drink marketing development

in the company's
100-year history.

And we knew Sergio
by that time was behind it.

He knew Pepsi very well.

And Roger, I'm not sure
he liked him,

but he had a lot of respect
for Sergio,

and he thought that this guy

might come up
with something big.

This morning there is
a surprising report

that after 100 years,
the Coca-Cola Company

is going to change
its formula for Coke.

That's the word from the trade
journal, "Beverage Digest."

Coke was looking
at its shrinking lead,

and Coke legitimately feared
that Pepsi could creep up on it

and ultimately overtake it.

So Coke had concerns,

but Coke also, it was being
poked so ferociously

at every turn,

I think it felt like
they had to fight back.

Because we could claim
that more people preferred

the taste of Pepsi
versus Coke,

that was something that would...
that would drive them crazy.

No one ever wants to hear that
their product doesn't taste

as good as someone else's,
and so at some point,

that just got under their skin

and they wanted
to take that away.

And the only way
that they could do that

was by changing the formula.

Before Coca-Cola

even made the official
announcement

of its new formula,

Roger Enrico
and his team at Pepsi

were already strategizing
a mode of attack.

The most important thing is

if you're going to fight
the cola wars

and be first and beat Coke,

you got to go 24/7.

You could not lose a moment.

We had spent the entire day

trying to come up
with an idea.

Everything sounded
so lame.

So when I was driving home
that night,

I kept thinking about it,
thinking about it

and thinking about it.

Then all of a sudden
it pops into your mind.

We're thinking about this
the wrong way.

It's not that they're
introducing a new product.

They're removing
the old product.

They just lost the cola wars.

My office was at the end
of the hall.

And Roger is not
a morning person.

I barely would get a grunt
good morning every morning

for all the years
that I worked for him.

He'd perk up by 10:00
in the morning.

But I saw him
coming towards me.

And there was a lightness
in his step.

And he came into my office,

and he had a little smirk.

And he said, "You are
not going to believe this."

And then this huge grin,
and he said,

"They're pulling Coke
off the shelves."

You know,
if you think about it,

over the last 87 years

we've been going at it
eyeball to eyeball.

The other guy blinked
and changed his product.

It felt like we all
deserved a victory lap,

but I think there was
a little bit

of stunned silence
for a moment.

Like, wow, we just won
the Super Bowl?

That actually happened?

We really won.
We did it.

Is Coke's latest move

the right thing
for the Real Thing?

Next thing you know,

Roger Enrico's got the media
talking about it.

He's sort of controlling
the narrative.

He's controlling
the dialogue

about Coke's big launch.

Roger Enrico
reacted quickly,

running a big ad
in the "New York Times"

and the "Wall Street Journal,"

and it was great
political theater on his part.

I can tell you
my reaction

to Roger's letter
in the "Times".

Obviously I wasn't
happy about it,

because he was, in a sense,
rubbing our nose in it.

But just professionally
I thought

that's a pretty smart
P.R. move there.

Pepsi also, and this was
Roger Enrico, the genius,

gave employees
the day off to say,

"Hey, we won.
Take a day off."

It was brilliant,

and it put Coke immediately
on the defensive

and fuelled all the storylines,

so that by the time Coca-Cola

gave its
momentous announcement,

everybody knew what it was

and they had lined up
to critique it.

The best soft drink,
Coca-Cola,

is now going
to be even better.

Simply stated,

we have a new formula for Coke.

I don't think
that we had anticipated

Pepsi would respond to us
prior to the press conference.

And as a result, I think
the response from the press

was less embracing
and less enthusiastic

perhaps than expected.

And are you 100% certain

that this won't bomb,
this new formula?

I think, as I said,

I think this is
the surest move ever,

because the consumer made it.

We didn't.

And we think there's going
to be enormous trial

as we roll out this product.

We've got such confidence
in the product.

We know we've got a winner.

One of the first signs
that something was amiss

was this press conference
where journalists

were basically asking
sort of probing questions

about why they would do this,

why they would
change the brand.

To what extent are you
introducing this product

to meet the Pepsi Challenge?

Oh, gosh, no.
I mean, that's...

the Pepsi Challenge,
when did that happen?

That's okay for number two,
always.

All I know is that
I was sitting

smack in the middle
of the room,

and then the tenor in the room
actually turned.

And if you watch the whole
press conference,

you can actually
palpably feel

the change in the room.

Are you... I mean,
if we wanted Pepsi,

we'd buy Pepsi.

Honey, you're...

Ma'am, I can tell you
that what you're going to get

when you try this new product
is Coca-Cola, even better.

It's not even close
to Pepsi.

It's not close to anything
you've ever had.

Not at all.
Not at all.

- Except a Coke.
- Not at all.

People were asked, "Why?"

And the answer was,
"We've discovered something

"that's even better

than the original taste
of Coca-Cola."

As I recall, his response
was something on the order of,

"It's older and rounder."

To this day,
I'm not sure what he meant.

Well, I would say
it's smoother...

uh, uh...

rounder...

yet...

yet bolder.

It's a more
harmonious flavor.

You're a pretty good
copywriter, Roberto.

I mean, for us,
that was a great clip.

With the global reach
of Coke,

Pepsi was never going to be
the number one cola

in the entire world
forever and ever, amen.

But their nervousness
and their flubs

truly, truly was a victory
for us.

Coke completely misread
the situation,

because they had been
successful.

They were number one.

And their own
internal research

for everything they knew,

this was going to be
a slam dunk.

They had done
all the taste tests.

They knew that people
preferred it.

They felt like
they're coming on strong,

they're going to squash Pepsi
for good with this.

So they were totally caught
off guard

when almost immediately
people rebelled.

They introduce New Coke
in April of 1985,

and then the next few weeks
were just a firestorm

when the public realized
that this was going to replace

the Coca-Cola that they had
known and loved

ratherhan be
another version of Coke

that was also available
in addition to regular Coke.

Thank you very much.

I'd like to invite you
to the lobby

to try the new taste
of Coca-Cola.

- Thank you.
- Thank you.

A bunch of us were up
in Roger's office,

and when we asked him,

"What's the number one thing
you want to achieve...

you want us to achieve
through all this?"

And he just look at us in the
eye and he said three words.

"Kill New Coke."

And when they did
that big press conference,

Becky Madeira, the little sly
devil that she was,

said, "Let's hand out free
Pepsi all over Manhattan."

Because they were doing their
press conference in Manhattan.

We wanted to be available
to get our word in.

There was music
and product sampling.

We spoke to every
single reporter

who we expected would attend

Coke's press
conference and say,

"Hey, please come and see us
just around the corner

on Columbus Circle when
you come out of their event."

I think Coke
has finally realized

what we have known for years,

and that's Pepsi tastes better
than Coke.

I think their move today is
a clear admission of that fact.

You know, it's quite obvious
that when something is right,

you don't change it.

What do you think
of Coca-Cola's announcement?

Well, we think victory
tastes very sweet.

We were all like,
victory is sweet.

This is great.
They changed the formula.

It was a pretty exciting time.

We were so focused
on the launch of New Coke,

we really didn't have
a lot of time to pay attention

to what Pepsi might or
might not do at that point.

Somebody out there tell me
why Coke did it.

Why they changed.

We had to respond
to Coca-Cola

changing their product.

The average time
of making a commercial

was a minimum
of two or three weeks.

We did it in 24 hours.
We wrote it, we shot it,

we edited it and we
distributed it in 24 hours.

Something that big needed
to have a response immediately,

or you'd lose the moment.

Who encouraged us to do it?
Roger.

So now I'm going to try
my first Pepsi.

But I still want to know
why Coke changed.

Mm.

Now I know why.

I do remember just sitting
there thinking to myself,

wow, when this gets released,

it's just adding another log
onto what I'm sure

is going to be
a huge bonfire.

Those ads really hit home
for a lot of people.

I mean, people were devastated.
They were really devastated,

which is kind of crazy,
you know,

to think that people
would be so hurt

by a soft drink,
but they were.

Pepsi wasn't the only voice

responding loudly
to New Coke.

Led by the press and Pepsi's
quick response,

American consumers rebelled
against the new taste

of the Real Thing.

Very disappointed.

I think we've lost
the American tradition.

People were furious
in a way I couldn't comprehend.

People felt like their power
had been stripped from them,

and they needed to take it
back from corporate America.

Well, it's a free country,
and as Rolonda Watts reports,

Coca-Cola heard the voice
of the people loud and clear.

I was a Coke lady,
but not no more.

Well, what kind of lady
are you now?

Pepsi.

I feel the same way
that she does.

I thought New Coke
was an obvious Hail Mary pass,

a desperate attempt
at catching up to Pepsi.

And as a Pepsi drinker,

I just laughed and said,
"That is lame."

My family, we toasted Pepsi
around the table and laughed.

Mocked New Coke.

- Honey, are you all right?
- I'll be fine.

- Is this about Arnie?
- No, Blanche.

She's upset because they keep
changing the taste of Coke.

They are going
to make Coca-Cola,

after 100 years,
sweeter.

They're going to be mixing it
with Pepsi.

Organizations were being
formed to protest,

and they're having fun too
because, you know,

this is not World War III.

Although for some people,
it seemed like it.

♪ Please don't
change the taste of Coke ♪

There was a guy
named Gay Mullins,

a retiree in Seattle,
who created a lobbying effort

on behalf of all
the disenfranchised,

disturbed, bewildered,
irate Coca-Cola consumers.

Not to be overlooked

are those loyal
to the old taste of Coke.

After 99 years,
it's a national institution,

and when they don't make it,

and then prohibit me
from getting it

by keeping
the secret formula,

then that's not American.

New Coke was un-American!

This is... hello?

I mean, you can imagine
if aliens came down

and they looked at this
and they said,

"Are you people crazy?
What is this all about?"

A coalition of cola addicts
threatened to boycott

all Coke products,

from movies to Minute Maid
orange juice.

Why are you upset about it?

Because I'm 46 years old

and I bought my first Coke
with a nickel

when I was five years old.

I helped build this
multinational corporation.

My oldest daughter is 22.

Her first word was "Coke."

Her second word was "Mommy".

They're crying.

They're crying.

You're going to give us
a new taste of Coca-Cola?

Oh, my God!

How could you do that?

I don't even think that
the most zealous Coke drinker

really was making
a rational decision.

I think they were jut upset
and carried away

with the idea that you've
changed an icon of America,

and that's wrong.

Can people really
taste a difference?

Certainly the head of the old
cola drinkers group

and the man who's invested
$50,000 of his own money

to fight New Coke,

certainly he could tell
the difference.

That's probably Pepsi,
New Coke and old Coke.

The one you liked
is the Pepsi.

Well...

The whole thing
was ridiculous.

I mean, you could only
have a moment like that

in a time where you have
mass media

and prosperity
in your culture,

because people had nothing
better to do

than to be
absolutely outraged,

ready to, like,
take to the streets

because you have changed
the formula of Coke.

The amount of bad publicity

that came around
changing a brand

that was America's brand,

it just seemed ridiculous to,
I think, so many people.

And the door was open,
and we just walked through.

You don't have to be
a marketing genius

to see the opportunity for
the Pepsi enterprise in that.

This is going to be fun.

It's been about
two months now

since we were first introduced
to the New Coke,

and all across the nation,

the reaction is still
at a fevered pitch.

Here is a sample

from the thirsty streets
of New York City.

I can't believe
what they've done to it.

The old Coke was terrific.

I hate it. It tastes like
watered-down Coca-Cola.

The top brass at Coca-Cola

hoped the initial outrage
over New Coke would subside,

but Coke sales were
dramatically dropping,

by as much as 10%
in some states.

They should go back
to the way it was before.

I recall that summer
moving through airports.

And I had...
all the luggage tags

were Coca-Cola branded
luggage tags.

I took the luggage tags
off my luggage,

because I was accosted
in airports by people

asking me for their Coke back,
and who did we think we were,

and what did we think
we were doing?

The reaction was just
so visceral.

What's the matter, Wilbur?

They changed my Coke.

- Could have asked.
- I could have.

I stuck with them
through three wars

and a couple of dust storms,
but this is too much.

I guess something big
made them change.

Right big.

Coke's problem with
the whole New Coke episode...

calling it an episode
being charitable

rather than a fiasco,

it was not one of product.

They never asked
the consumers,

"Okay, you like our taste.

"You like the taste
of this new cola beverage.

"What about if
we bring this to market

"and we get rid
of original Coke?

How would you feel
about that?"

Had they asked that question,

maybe they would have had
seconds thoughts

about releasing New Coke.

Well, everyone was paranoid
about secrecy.

But because it was behind
closed doors

in an isolated chamber,

it also kept the daylight out
and we didn't...

you know, we couldn't test it
as a branded product.

We couldn't test the idea
of a New Coke.

I think it could
safely be said

that they truly
underestimated the romance

that the American people have
had with Coca-Cola,

the drink which is really
more than a drink

and more than a taste.

You are stuck with an icon.

Oh, my gosh.
Gee.

You can give us
big bottles of Coke,

you can give us little
bottles of Coke,

but you can't change
the taste.

For millions of us,
changing the taste of Coke

is like tampering
with our own past.

The only people who were more
into hating New Coke

than Coke drinkers
were people on the news.

I don't know why they were
so excited to report on this.

Was it, in fact, the slowest
news week in history

when New Coke was launched?

Because that's all
people talked about.

It was great sort of
commercial corporate theater,

but it also was
that slap in the face

that made Coke recognize,
now it's our move.

Now what do we do?

Given the visceral reaction

in the marketplace
from the American consumer,

people began to talk
a little bit about, you know,

was New Coke really
going to be the success

we'd hoped it would be?

And should we reconsider
our decision?

Brian Dyson and Sergio Zyman

believed strongly that
it was just a matter of time,

all this hubbub would die down.

New Coke was the future.

But as the calls and letters
kept coming,

as the uproar kept rising,

eventually it began
to affect our sales.

I think we really had to
learn to listen more carefully

to what people are saying
and needing

and wanting to enjoy
about our brands,

versus what we would like
to have them do.

From ABC,

this is "World News Tonight
with Peter Jennings."

Good evening, there is likely
no other country in the world

where an evening broadcast
such as this

would begin with the news
that a popular soft drink

was going to re-introduce
its original formula.

But this is America,

and Coca-Cola
is part of Americana.

Tomorrow, the Coca-Cola
Company will announce,

with appropriate fanfare,

that they are bringing
a new soft drink to market.

Old Coke.

Only now, it will be called
Classic Coke,

and the New Coke will now be
called just Coke.

We began to talk about it
as a political analogy.

We said, "What if
we recognize the mistake?"

What if we say
we did the wrong thing?

Unthinkable for
a corporation to do that.

But what on earth brought us
to the decision

to bring back the classic taste
which we so calmly abandoned

back in April?

It was just a remarkable
press conference,

where the COO of Coca-Cola
stood behind a podium

and basically
trolled himself.

Trolled the company
with letters from consumers.

Here's one that starts,
"Dear Chief Dodo."

Well, I passed that along
to Roberto unopened.

"Changing like Coke is like
God making the grass purple,

or putting toes on our ears,
or teeth on our knees."

And here's one.
"Dear Sir, you have fouled up

by changing the only
perfect thing in the world."

What the company learned
was that, in a way,

we didn't own the brand.

The consumer
owned the brand.

Some critics will say

Coca-Cola has made
a marketing mistake.

And some cynics say that
we planned the whole thing.

The truth is,
we're not that dumb

and we're not that smart.

There was a theory
at the time

that Coke had purposely
done this.

If you look at
the reality of it,

it's absurd on the face.

That's how into this
people were,

that they were inventing
a conspiracy.

Because it made no sense.

They spent
billions of dollars

to take old Coke
off the market.

They spent billions of dollars
to put New Coke on the market,

only to take it
off the market

to spend billions of dollars

to put old Coke
back on the market.

If that's a smart idea,

then I don't know
what smart means.

They're both yours,

the new taste of Coke
and Coca-Cola Classic.

Your right of choice is back.

Then they tried to market
two products side by side:

Classic Coke and New Coke.

And that was just not
a winning idea.

We had an awful lot
of fun with it.

The slogan of the day was
"Coke are it."

And that was coined by none
other than the Pepsi chairman,

Roger Enrico.

Pepsi's attack on New Coke

was hugely successful,
but Coke Classic would prove

to be tougher competition
than expected.

In the first ten hours after the Coke
announcement Despite Pepsi's confidence,

that it was reviving
the old Coke,

the company received
18,000 phone calls,

most of them
expressing thanks.

So Coke has obviously
done something right there.

New Coke was a success
in terms of two things.

The company rediscovered the
fact that the consumer said,

"Hey, this is mine.
Don't mess with it."

And also, we had lapsed
consumers who said,

"Well, we ought
to demonstrate, literally,

by going back
and drinking Coke again."

So, you know,
the data will show it.

There was an uptick in sales.

In one of the most dramatic

comeback stories
in consumer history,

Coke Classic would go on
to outsell New Coke

by 10 to 1 within a year,

driving overall
Coca-Cola shares

to unprecedented heights.

I think the introduction
of Coke Classic

was the first step
in redemption for Coke

in saying, "We messed up,
we found our soul,

we've been through therapy,"

and on some subconscious level,
it got me to drink Diet Coke.

I haven't had a Pepsi since.

Your president of Coca-Cola
U.S.A. gave a speech,

and he's talking about
intrinsics and extrinsics.

Intrinsics means
I buy the product

because I like the way
it tastes, or whatever.

Extrinsics are,
I buy the product

because I like the image,
it's fun, it's friendly,

it's American, whatever.

Used to be
we bought product

primarily because of taste.

It's been a phenomenal thing
that's happened.

A phenomenal shift.

We now buy soft drinks
for an image.

Your image, never mind
the bad old days last summer,

is stronger than ever,
symbolic of America.

How have you done this?

I don't like to be
immodest about it,

but the simple fact is
that the image of Coca-Cola

has never been higher.

The numbers we're seeing
are just remarkable.

It was not just
an emotional reaction.

It was four positive
share points for Coca-Cola

at about $500 million
a share point.

In other words,
people came back to Coke,

and they felt almost
an obligation to do so,

having demanded that Coke
bring back Classic.

♪ You might find magic ♪

♪ In a Coca-Cola Classic ♪

By the time Classic Coke
came back,

they changed the patina of this
old never-changing stodgy Coke

that took away
the damage we had.

It took away the fact
that they were unchanging.

♪ Feeling you get
from a Coca-Cola Classic ♪

♪ Can't beat the feeling ♪

Really smart marketers know

that at some point,
you have to take risks.

If you don't take risks,
you stagnate.

And this was an example
of Coke taking a risk.

And they ended up
with an outcome

that was probably beyond
their wildest expectations.

All of that fuss,
and front-page coverage,

and leading off the evening
news with this kind of activity

makes it top of mind.

In retrospect, there's been
a lot of marketing disasters.

That one really stands out
as perhaps the worst.

But like with so many things
in history,

there's now
a revisionist history,

the Coke point of view,
which is,

hey, we were sort of a brand

that was losing
name recognition,

and suddenly New Coke
put us on the map.

Suddenly, everybody
was talking about Coke.

♪ Can't beat it ♪

♪ Can't beat the Real Thing ♪

As you look back,
it's been said

that we got a hole in one

even though we hit the tree
with the golf ball.

So that kind of happened.

The cola wars
are still bubbling.

It was five years ago today

that Coca-Cola introduced
New Coke.

The battle
between Coke and Pepsi

reached its peak
during the summer of 1985,

but the company rivalry
will always remain,

evolving along
with consumer culture.

I think the 1980s,

particularly the last
five years of the '80s,

was representative
of two things.

It was, in effect, the
beginning of a closing chapter

of an era of mass consumption
and mass media.

We live in a world now
where it's very hard

to have that mass experience
where we all come together

and we're all talking about
the same thing,

and we're all drinking
or eating the same thing.

Now, good lord,
you go in the supermarket,

I mean, it's like, okay...

how does anybody
make a choice here?

Really in
the last 20 years,

we've seen a change in the way
that we consume drinks.

There's been increasing
recognition

of the health dangers of soda,

particularly full-fledged
all-sugar sodas.

Former President Clinton
is speaking out

about his mission
to end childhood obesity,

and the plan to eliminate

sugary soft drinks
from schools.

I think that back in 1980,

you would drink a full-sugared
cola with no problem.

Who does that today?
Very few people.

Everybody's
so health-conscious.

So I think that it's just
a different culture now.

Today's Coke and Pepsi

serve every consumer niche
imaginable,

scoring both hits and misses
for the brands.

As tastes evolved,
both Coke and Pepsi

diversified their offerings,

going way beyond soda

to extend the fight
to any and all beverages.

Whatever you drink, they're
going to own eventually.

Any form of matter
that is liquid,

Coke or Pepsi
will eventually own.

In fact, we'll probably be
putting Pepsi in our gas tanks.

Does the rivalry between
the Coca-Cola Company

and PepsiCo still exist?

Oh, yeah, without a doubt.

The rivalry
isn't just focused

on Coke and Pepsi,
the cola drinks.

It's just, is it still
the cola wars?

That is the question.

And it's an open question
as far as I'm concerned.

What can I get you?

- Blueberry pie and a Pepsi.
- Got it.

Thanks.

Good song.

Great song.

If anyone out there
is thinking of starting

a cola war,
avoid it at all costs.

I tell my son
about the cola wars

every night
before he goes to bed

in the hopes that this
never happens again.

If you can't beat it,
catch the wave. Coke.

So when it's all
said and done,

who won the cola wars?

You know, I'd love to tell you,
and it's true,

that Coca-Cola's market share
is larger,

but it was larger
before the cola wars started.

You know, and who really won
was the soft drink business.

And in the end of the day,
the cola wars were less about

the soda itself

and much more about
everything surrounding it.

It was about your position
in the firmament,

where you stand
in American culture,

and Coke and Pepsi took on
just a greater importance,

because they are really
cultural touchstones.

I think that that is what
really strikes me

about how these two companies
creatively locked horns,

where they took music,
they took images,

and they were able
to persuade us to buy

a vast quantity...

oceans of their products.

And it's really quite
remarkable.

It felt really great
to be a part

of what is probably
one of the most historic

marketing rivalries
in the world and of all time.

You know, if you do what
a communications person does

for a living,

and you wake up in the morning
and the "New York Times"

and the "Wall Street Journal"
and the networks

are all interested in your
company and in your product,

boy, oh, boy,
what could be better?

Pepsi-Cola was the greatest
place to work.

We worked hard
and we partied hard.

You could not wait to get
to work in the morning.

It was a happy place.

We all knew
we had a mission,

but we all wanted to go and
be on the journey together.

You may say that the
products at the end of the day

were not products of great
sociological significance,

but, you know,
it's a product people enjoyed.

A product that
made people happy.

So, what's the matter
with that?

Are you willing to do
a Pepsi Challenge?

I will not drink Coca-Cola
under any circumstances.

So how do you want me
to do this?

Just pick it up and drink it?

Are you sure
they're different?

Boy, they both taste
the same.

I get to keep
my retirement!

Oh, goodness.

Never missed yet.
It's the better product.

It tastes the same.

What's all this about anyway?