Paul Porwoll can recall in vivid detail what he was doing at this point in 1985.
He working in marketing for an iconic American company. He was in Atlanta. And he was preparing to help mop up one of the biggest business blunders of the 20th century.
“What a wild ride it was,” he said.
Before moving to Johns Island in 2006. Porwoll spent almost a third of his 19-year marketing career at The Coca-Cola Co. as a brand manager tasked with both launching and then trying to fix “New Coke,” which made its disastrous debut almost 30 years ago to the day.
“People who remember it, remember the passion and the feelings it engendered,” he said last week. “But to a lot of people today, especially younger people, they have no idea what happened, what it was all about.”
How one of America’s most beloved and savviest consumer-product brands got it so wrong is now a cautionary tale for both business leaders and business students. The story line includes an aggressive antagonist, a misconceived idea and a surprising redemption.
By the early 1980s, Coke was staring down a classic dilemma for any maturing business. The Atlanta-based company, the undisputed king of the soft-drink world for decades, was about to be dethroned by hard-charging rival Pepsi amid an escalating marketing battle termed “The Cola Wars.”
“The sales trends were unmistakable,” Porwoll said. “Pepsi would soon pass Coke, and that was unthinkable to Coke executives.”
The big hitter from Georgia wasn’t about to go down without a fight. Coke had one arrow left in the quiver. It had developed a new formula — its first in 99 years — that topped both the original secretive Coca-Cola recipe and Pepsi in about 200,000 taste tests. The respected Roberto Goizueta, the CEO at the time, called it “the surest move ever made.”
“Why would they not use it, when everything else they had tried had failed?” Porwoll said.
Details of New Coke began to spill out before the high-profile New York City launch on April 23, 1985, stirring up a media frenzy. “Coca-Cola Altering Secret Recipe,” Charleston’s morning newspaper trumpeted in a headline that day. Pepsi used the opportunity to chime in, saying the sudden switch by its rival was “clearly an admission that it’s not the real thing.”
Porwoll was assigned to the team that launched New Coke, “a lieutenant in the trenches trying to make it work,” he said.
In short, it didn’t. Many longtime Coke drinkers complained that the new formula was too sweet. Too much like Pepsi, some die-hards scoffed.
“People just had none of it,” Porwoll said. “In today’s world it would’ve gone viral. Things would not have taken nearly so long to develop.”
The backlash would consume the next six years of his career at Coca-Cola.
“This is where the saga really gets interesting,” Porwoll said.
While most companies would have licked their wounds and conceded defeat, Coca-Cola refused to cave in.
“Coke was not used to humiliation,” Porwoll said. “And this was abject humiliation.”
In a face-saving move, it quickly reinstated the original formula, calling it “Classic.” The company also decided to sell both versions — or, as Porwoll recalls, “two nearly identical products in nearly identical red-and-white cans.”
“Confusing? You bet it was,” he said.
He recalled a cartoon skewering the New Coke debacle. It showed three bums sitting on a bench, with two pointing at the despondent-looking other guy.
Porwoll said: “The caption: ‘Remember Fred here? He’s in MARKETING! ... Remember the New Coke?’ I crossed out ‘Fred,’ and wrote in ‘Paul.’ I pinned this up in my office. It was all the motivation I needed.”
By his estimate, Coca-Cola shelled out hundreds of millions of dollars to make New Coke viable.
“We tried everything we could think of to resurrect it, but nothing worked,” he said
In 1990, the company began to pull back. New Coke was rebranded as “Coke II” in new packaging. The sole test market was Spokane, Wash. The media declared it a failure in just a few weeks, Porwoll said. Coca-Cola offered its local bottlers the option of offering Coke II to their customers.
“Very few did,” he said.
The brand languished in obscurity before quietly being put to pasture in the Pacific Northwest, far from the Atlanta headquarters.
“This was now seven years after New Coke was introduced,” Porwoll said.
In an unexpected twist, the costly marketing misstep actually improved Coca-Cola’s position in the carbonated category, though 30 years later the company’s expanded beverage stable faces mounting competition from energy drinks and other thirst quenchers.
“Despite all the anguish, Coke’s corporate sales and market share were far better after New Coke than before,” Porwoll said. “Today, the No. 1- and 2-selling soft drinks in the U.S. are Coke and Diet Coke.”
The former New Coke lieutenant, now retired and the historian at St. Andrew’s Parish Church in West Ashley, said the takeaway for other business marketers is both simple and timeless: “Listen to your consumers.”
“With the original formula gone, consumers felt they had lost an old friend,” he said. “They said in no uncertain terms that they owned the brand, not us. And they were livid.”
At the same time, Porwoll said, businesses still need to take calculated risks and continuously innovate. It’s all about managing that constantly shifting balance, between old and new.
“The results can be spectacular successes like Diet Coke, abysmal failures like New Coke, or anything in between,” he said.
Contact John McDermott at 937-5572.