The Storytelling and Taste Wars – Coca-Cola vs. Pepsi

We don’t buy products based on facts and figures. We buy magic, feelings, emotions – we buy stories.

Let me give you an example.

Almost every weekend, I buy coffee from this one place close to my home. And it isn’t necessarily because they have the best coffee in Amsterdam. This coffee spot is one of my favorites because the owner knows many of his customers, showing he values them greatly. Because the different types of coffee beans on the counter show they’re all about coffee. And because the funny coffee-quote on the wall shows they’re truly passionate about coffee: “Money can’t buy you happiness, but it can buy you coffee.” You’ll love your ‘cup of Joe’ long before you’ve even tasted it.

Food and beverages are some of my favorite products from a marketing perspective. And that’s for one simple reason: taste is 100% subjective. And because of that, it can easily be influenced. Take a look at the Pepsi Challenge for example.


The Pepsi Challenge

In 1975, Pepsi set up a series of blind taste tests in malls, shopping centers, and other public locations. The test was simple: there’s one cup that has Pepsi in it, one that has Coca-Cola in it, try both and see which one you prefer.

The result of the test showed that more Americans preferred Pepsi over Coca-Cola. So in the years that followed, Coca-Cola figured that they needed to do something to their flavor in order to make their product more attractive.

Coca-Cola mistakenly thought that their customers cared about taste.

So in 1984, after a $4m research campaign in which Coke tried tons of different recipes, Coca-Cola finally changed the recipe of their iconic drink to make it sweeter. It was the first time in its 99-year history that the recipe was changed.

In the months that followed, the ‘new’ Coca-Cola was being prepped to be launched. Advertising agency McCann-Erickson was put to the marketing task and it quickly became a James Bond type of secret operation. The people involved in the project worked in a separate office from their colleagues, an office guarded by security personnel. And cans of the new Coke would only be carried in and out in secure briefcases.

But still, the news leaked.

Pepsi came down hard on Coke. They took out full-page newspaper ads on the day of Coke’s press conference in which Coke would announce their revitalized drink. The ads read: “After 87 years of going eyeball to eyeball the other guy blinked”. After all, Coke was putting in all this effort to be more like Pepsi.


More than taste

The new Coke formula hit the shelves shortly after the press conference. A major TV campaign was launched and offline there was even a parade organized in New York where thousands got free examples.

But the new Coke wasn’t a success.

A campaign group called ‘Old Cola Drinkers of America’ (yes, that’s a thing) gained massive coverage in the US by launching an actual lawsuit against Coke for changing the recipe that America loved.

Coca-Cola received nearly 40,000 letters of complaint and right after the launch in May they were already receiving about 1,000 angry calls each day. One month later, this number hit 8,000. And sales of Coke went into a free fall.


Coke’s come back 

79 days after launching, Coke held another press conference.

“The passion for original Coca-Cola was something that caught us by surprise. It is a wonderful American mystery, a lovely American enigma, and you cannot measure it any more than you can measure love, pride or patriotism.

People didn’t love Coke for its taste, but because it was America’s sweetheart.

The original recipe was reinstated and sales quickly bounced back.



Storytelling wins 

The Cola wars were never about taste. Coke just felt for the trap that Pepsi had cleverly set up with their Pepsi challenge.

Coca-Cola was (and is) the market leader because it’s America’s favorite. It’s the world’s favorite.

And just like Coca-Cola, we’re okay with buying a $20 bottle of wine instead of a $5 one. And in the same way, this cereal brand with squared cereal pieces became a massive success after they slightly turned their existing product so it looked like a diamond, rather than a square. Perspective is everything.

And if you’re not convinced yet, consider this thought experiment of Ogilvy adman Rory Sutherland:

Imagine a restaurant that serves Michelin-starred food, but where the restaurant smells of sewage and there’s human feces on the floor. The best thing you can do there to create value is not actually to improve the food still further, it’s to get rid of the smell and clean up the floor.”

To create real value, we need to think about the story of the product instead of only focusing on its features.


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