Coca-Cola recently announced plans to transition to a total beverage company by reshaping its business growth strategy based on changing consumer tastes and buying habits. This new strategy, according to President and Chief Operating Officer James Quincey, requires a tighter focus on building and launching “consumer-centric” brands, including more low- and no-sugar options and drinks in emerging categories.
Here are 10 other business decisions over the last 130 years transformed Coca-Cola from a startup beverage served in a small Atlanta pharmacy to one of the world’s most recognisable brands:
1886-1940s: Coke for a Nickel
Coca-Cola’s earliest leaders believed that their product should be affordable and available everywhere. To achieve this, the company held the price of a Coke to five cents – or one nickel – for more than 50 years. Despite the impact of two world wars and the Great Depression, the company insisted that trial and acceptance of its product could best be maximised by making Coca-Cola a beverage affordable to everyone. This steady price contributed to increasing consumer demand for the product, which in turn caused bottlers to buy more syrup to produce the product.
1894: Invention of the Sample Coupon
Despite being a great-tasting product, Coca-Cola’s existence was unknown to many consumers outside the Southeastern United States. To address this, Asa Griggs Candler, who purchased the recipe for Coca-Cola from inventor Dr. John Pemberton in 1888, started giving away free sample coupons to anyone who would try a sip of a Coke. From 1894 through 1913, more than 8.5 million sample coupons were redeemed for a free Coca-Cola. And by this time, one out of every nine Americans had tried Coca-Cola.
1899: Birth of the Coca-Cola System
As the beverage industry underwent an era of immense change and competition in the late 1800s, Candler focused on expanding distribution. By selling the rights to bottle Coca-Cola more broadly, he aimed to create nationwide demand for his product. In 1899, Candler sold the bottling rights for Coca-Cola for $1 to Chattanooga, Tenn. lawyers Benjamin F. Thomas and Joseph B. Whitehead, forming what today is known as the Coca-Cola system. A franchise partnership between The Coca-Cola Company and more than 250 bottlers worldwide, this system has extended Coca-Cola’s reach far beyond what Candler ever imagined – now with sales in more than 200 countries.
1915: Launch of the Iconic ‘Contour’ Bottle
Almost immediately after its launch, Coca-Cola faced an enormous number of “lookalikes” attempting to imitate its success. To confront this, Coca-Cola challenged glass companies to create a new bottle design that was so distinct that it could be recognised when broken on the ground or by touch in the dark. In 1915, inspired by the shape of the cocoa pod, the Root Glass Company created what is now known as the contour bottle to distinguish Coke from its peers. Now more than 100 years old, the contour-shaped bottle has become a celebrated and instantly recognisable icon around the world.
1940s: Coca-Cola During Wartime
During World War II, Coca-Cola President Robert Woodruff believed that every American service man and woman should have a Coke at their disposal for five cents, no matter where they were or the cost to the company. A group of employees known as Technical Observers were dispatched with the American army to set up, supervise and monitor the operations of bottling units that would distribute Coca-Cola to U.S. troops abroad. Woodruff’s vision during this critical period in American history helped establish Coke as a global corporation by introducing the product to different markets. In addition to its global impact, this act instilled a level of brand loyalty among troops and families within America whose love and support for the product lasted for generations.
1960s Diversification: Minute Maid, Sprite, TaB and Fresca
The purchase of The Minute Maid Corporation in 1960 marked the company’s first venture outside of carbonated beverages. At the time of this purchase, Minute Maid accounted for a third of the sales in the juice category in the United States and had developed a reputation for the quality of its product. This investment was a key step for Coca‑Cola expanding and diversifying its portfolio in the years to follow. Following the successful acquisition of Minute Maid, over the next few years Coca-Cola introduced Sprite, the company’s first lemon-lime drink; TaB, its first diet drink; and Fresca, a sugar-free citrus drink. Since then, The Coca-Cola Company has grown to offer more than 3,800 drinks across a wide range of categories. In 2015 alone, the company launched more than 600 new products.
1982: Diet Coke
In the late 1970s, Coca-Cola began developing a new drink that would reignite cola sales and satisfy an increasing appetite from consumers for low-calorie drinks. In 1982, to great fanfare, the company introduced Diet Coke as the first extension of the Coca-Cola trademark. Although there were initial concerns that a new diet drink would diminish the trademark, within a year of Diet Coke’s launch, it became the nation’s top sugar-free beverage. The introduction of Diet Coke was an important milestone for the company because it started a new period that prompted the company to take risks in introducing unique new drinks to meet consumers’ changing needs.
1985: New Coke
In an attempt to revitalise the cola market in 1985, The Coca-Cola Company removed its flagship product from the market to introduce New Coke, marking the first formula change in 99 years. Although the introduction of New Coke was first deemed as the business blunder of the century, some analysts considered it to be an accidental stroke of marketing genius. Amid negative media coverage, protests, letters, phone calls and consumers trying to fill their cabinets with as much original Coke as possible, an emotional connection was discovered between the Coca-Cola brand and its consumers. Announcing the return of the original Coke formula at a press conference, Don Keough, then president and chief operating officer stated, “The passion for original Coke was something that caught the company by surprise.” After the restoration of the original formula to Coca-Cola Classic, it reemerged as the leading soft drink in America.
Late 1990s-early 2000s: Becoming a Total Beverage Company
In the late 1990s, Coca-Cola began talking about a transformation from being predominately a sparkling beverage company to becoming a ‘total beverage company.’ A number of early product launches quickly captured the growing consumer market for non-carbonated drinks, especially in the U.S. market. Dasani launched as the company’s primary U.S. water brand in 1999 followed by the launch of Simply juices in 2001, Gold Peak teas in 2006 and the acquisition of vitaminwater and smartwater in 2007. Today, each of these brands rank among the company’s 21 brands that each generate more than $1 billion in retail sales annually.
Now and into the Future: Keeping Up with Consumer Trends
Today, as consumers continue to demand new and exciting beverage choices around the world, the company is finding new ways to tap into growing trends by taking ownership positions in fast-growing beverage brands. In 2007, Coca-Cola North America launched its Venturing and Emerging Brands (VEB) unit to seek out and identify the next generation of billion-dollar brands that the company can add to its portfolio. VEB acts as part venture capitalist and part brand incubator that has acquired or invested in brands that include Honest Tea, Zico, Suja and Core Power.
Outside the United States, the company also has continued to acquire or invest in brands that respond to the explosion of beverage choices now available to consumers worldwide. Recently announced global acquisitions or investments have included AdeS*, the leading soy-based beverage brand in Latin America; Chi Limited, a successful West African producer of dairy and juice beverages; and China Culliangwang, a maker of plant-based protein drinks made from high-quality agricultural sources.
All the while, the company continues to grow it sparkling beverage options, including continued growth for its original and most-loved brand – Coca-Cola.
*Subject to regulatory approvals and customary closing conditions