Original subtitles

Subtitles by explosiveskull www.OpenSubtitles.org

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?

Subtitles by explosiveskull www.OpenSubtitles.org