Friday Forecast: Buh-Bye Coke Zero: A Case of Zero Recall or Shrewd Move?

by Colleen Ferrier and Rick Petry on Jul 28, 2017 10:53:34 AM Consumer

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For over 35 years now “New Coke” has been used as a textbook example of a bad business decision and a public relations debacle. Recall that in 1985, after 15 years of eroding sales, the Coca-Cola Company decided to reformulate Coca-Cola and introduce “New Coke” to the marketplace, a supposedly superior tasting product that would help reinvigorate the brand. Consumers rebelled, hoarding the original formulation, and vehemently protesting the corporation’s decision. After 89 days, the old drink – now dubbed “Coca-Cola Classic” was brought back and marketed beside the new entrant until, over time, the latter died off from American store shelves along with the controversy that surrounded it.

Flash forward to this week and an announcement by Coca-Cola that must have bought a déjà vu shudder to Coke Zero lovers nationwide: Coke will be replacing the no sugar drink with a new confection, Coca-Cola Zero Sugar, and pulling Coke Zero from the domestic marketplace. According to a company release, the “new recipe tastes like a Coke with zero sugar and zero calories.” This, despite Coke Zero being the tenth most popular soft drink according to Beverage Digest, and the United States being the strongest market for the diet beverage. With the demonization of sugared soft drinks and the erosion of overall diet sodas sales, Coke is taking a big gamble on the idea that a new, sugarless formula can help boost sales and satisfy appetites for sugary-tasting drinks devoid of actual sugar.

Consumer reaction on social media has been swift. Some examples:

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So, what gives? Is Coke trying to play the “absence makes the heart grow fonder” card or are they really so sure about their market research that they believe they can dump a beloved product and grab a bigger share of the market with their new entrant? Recall our recent blog which examined the role of scarcity in marketing (and Amazon Prime Day in particular). In the simplest terms, as soon as you tell people they can’t have something, they want it more. Is this a cynical play on the part of Coke to boost sales by first pulling the product off the shelf, and them bringing it back later in order to quench pent-up demand? That is precisely what happened when Original Coke was reintroduced to the marketplace after the New Coke furor. According to the aforementioned company release, marketing spokesman Stuart Kronauge insists that “We’re confident our new and improved Coke Zero Sugar recipe delivers a great taste that Coke Zero fans in the U.S. will love. We also hope that people who love the unforgettable taste of Coca-Cola, but want less sugar, will try it and enjoy.”

Planned obsolescence is hardly new. After all, Apple, one of the two most valuable companies in the world, employs it as a standard tenant of their business. We grimace as our adaptors and aftermarket products turn to so much dust, and wearily get out our charge cards to buy the latest and greatest for one simple reason: along with those changes we bemoan, the next generation of product has new bells and whistles that improve product functionality and our experience. Simply put, the juice is worth the squeeze.  But the difference between a smartphone and a can of soda is that with the former you can choose to still hold on to your old model while its usefulness dies a slow death over time. When something is literally taken off the shelf, we no longer get to choose, which in part explains why some consumers are taking Coke’s decision so personally; we are spoiled by choice, we expect to have it, and when someone snatches it away, it is an affront. On the other hand, if Coca-Cola Zero Sugar really delivers on its promise of superior taste, this controversy may soon be so much sugar water under the bridge. One Coca-Cola slogan invites you to “Taste the Feeling.” Will the new taste be bitter, bittersweet, or a sweet decision? Only time – and your tongue – will tell.


 About the Authors

Colleen & Rick.jpgColleen Ferrier is a seasoned direct marketing expert who specializes in guiding integrated direct-to-consumer campaigns with an acute focus on ROI. Her broad experience has included management oversight of marketing, operations, media, and international distribution. The campaigns she has been instrumental in helping lead to success across her 15+ year career include Pillow Pets, Little Giant Ladder, Dream Lites, and Stompeez. Ferrier has a Bachelor of Arts in Communications from Augusta University, Georgia.

Rick Petry is a direct marketing veteran of over 25 years who has been involved with campaigns that have generated over $1 billion in sales. He provides creative services to both B2C and B2B marketing campaigns and recent projects have included Actegy/Revitive, Education Connection, GOLO, Joybird, and OYO/DoubleFlex. The author of over 200 articles on direct marketing best practices, Petry has a Bachelor of Arts in Cinema/Television from the University of Southern California and an MBA with a Concentration in Marketing and Sales from Marylhurst University.

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