In 1985, a major beverage manufacturer made a bold and unprecedented decision to reformulate its flagship soft drink, introducing what became known as a “new formula.” This move was driven by the company’s strategic goal of countering a key competitor’s growing market share and rejuvenating the brand’s appeal among younger consumers. During the early 1980s, the rival company had gained traction, particularly among younger demographics, due to aggressive marketing campaigns that emphasized consumer preference for a sweeter taste in blind taste tests. In response, the beverage company believed that a revised, sweeter formula would better align with contemporary consumer preferences and give it a competitive edge.
To support this approach, the company conducted extensive taste tests involving thousands of participants, many of whom expressed a preference for the reformulated version over both the original product and its primary competitor. Encouraged by these results, the company made the radical decision to replace the original formula entirely, rather than introduce the new one as a separate product. On April 23, 1985, the company announced the launch of the reformulated beverage, ceasing production of the original formula that had been a cultural staple for nearly a century. This marked one of the most significant product shifts in the company’s history.
However, despite early optimism, the rollout of the new formula led to an unexpected and intense consumer backlash. Many loyal customers felt a strong emotional attachment to the original beverage, viewing it as more than just a drink, but as a meaningful part of daily life and national identity. The decision to eliminate the original formula was perceived as a betrayal, triggering widespread discontent. Protest groups formed, complaints poured into company headquarters, and media coverage amplified public outrage. The backlash reached such a magnitude that within just 79 days, the company reversed course. On July 11, 1985, it reintroduced the original formula under the name “Classic,” acknowledging the misstep and seeking to restore consumer trust.
This incident remains one of the most widely studied business case studies, illustrating the importance of aligning innovation with consumer expectations. It highlights how even data-backed changes can fail when they overlook emotional and cultural connections. The case underscores the power of brand loyalty and how a product’s value extends beyond functional attributes to include sentiment, tradition, and trust.
What Was the New Soft Drink Formula?
The revised soft drink was a reformulated version of the company’s original beverage, developed in response to shifting consumer preferences and growing competition. In the early 1980s, the competing brand had made gains in market share, particularly through a campaign that highlighted its sweeter taste. In response, the beverage company initiated an internal project to develop a new formula that would outperform both its own legacy product and its main rival in taste tests. Following widespread testing that indicated preference for the new version, the company decided to replace its original formula entirely. The new version debuted on April 23, 1985—marking the first major recipe change in the product’s 99-year history.
Why Did the New Formula Fail?
Underestimating Brand Loyalty:
The company misjudged how deeply consumers valued the original formula. For many, the drink was not just a beverage—it was a symbol of tradition and familiarity. The abrupt discontinuation of the original was seen as disrespectful to loyal customers and created feelings of loss and betrayal.
Overreliance on Taste Tests:
The company relied heavily on controlled taste testing, which failed to capture the emotional and symbolic value of the product. These tests measured preference in a limited context and did not consider brand attachment, cultural significance, or real-world consumption behaviors.
Consumer Backlash:
The response to the new version was overwhelmingly negative. Consumers voiced their dissatisfaction through thousands of letters, calls, and public protests. Media coverage amplified the outrage, turning the misstep into a national controversy and damaging the brand’s reputation.
Competitive Dynamics:
The competitor took advantage of the misstep by emphasizing its own consistency and authenticity. This repositioning helped it attract disaffected customers and gain further ground in the market during the controversy.
What Are the Lessons from This Product Failure?
Respect for Brand Heritage
Changes to legacy products must be handled delicately. Companies should understand and respect the historical and emotional significance of long-standing offerings before attempting major alterations.
Holistic Market Research
Beyond quantitative studies like taste tests, brands must invest in qualitative research to understand how consumers feel about a product. Emotional responses and brand associations are critical to product success.
Incremental Innovation
When changing core products, incremental updates allow customers to adjust and provide feedback along the way. A phased approach minimizes backlash and provides room for course correction.
Responsive Crisis Management
Quick, transparent responses to consumer dissatisfaction can help repair trust. The company’s decision to reintroduce the original formula demonstrated accountability and a willingness to listen to customer concerns.
How Did the Company Recover?
In response to public outcry, the company reintroduced the original soft drink formula on July 11, 1985, branding it as “Classic.” The move was met with approval from both consumers and media. Sales surged, eventually surpassing both the new version and its primary competitor. The new version was later rebranded and sold in limited markets before being discontinued altogether. The company’s swift corrective action and renewed marketing efforts helped it regain consumer trust and reinforce its market leadership.
Fast Fact
Within months of reintroducing the original formula as “Classic,” the company experienced a significant surge in sales, underscoring the power of consumer sentiment and brand legacy in driving product success.
Author's Detail:
Sneha Mali /
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Sneha Mali is a research analyst working in various domains including the Consumer Goods, market research and transport & logistics and her primary responsibility is to conduct thorough research on various subjects and provide valuable insights to support client requirements. Her knowledge of research methodologies, and data mining which enables me to analyze large data sets, draw meaningful conclusions, and communicate them effectively.Sneha stay up-to-date with the latest research trends, methodologies, and technologies to ensure that her research is accurate, relevant, and impactful.
In her current role, Sneha is committed to continuous learning and staying abreast of emerging trends in research methodologies. Regular participation in workshops, webinars, and industry conferences ensures that her skills remain sharp and relevant. She have demonstrated ability to transform complex data sets into clear and concise narratives that inform key business strategies. Collaborating with cross-functional teams.Sneha remains an invaluable asset in the dynamic landscape of market research.
