Coca-Cola

Coca-Cola (also known as Coke, Coke being a trademark of the Coca-Cola Company after it was discovered many people called it by that particular name) is a very popular carbonated cola soft drink sold in stores, restaurants and vending machines in more than 200 countries. It is produced by the Coca-Cola Company (NYSE:KO), which is also often referred to as simply Coca-Cola or Coke. It is one of the world's most recognizable and widely sold commercial brands. Coke's major rival is Pepsi.

Originally intended as a patent medicine when it was invented in the late 19th century, Coca-Cola was bought out by shrewd businessman Asa Griggs Candler, whose aggressive marketing tactics led Coke to its dominance of the world soft drink market throughout the 20th century. Although faced with critiques of its health effects and various allegations of wrongdoing by the company, Coca-Cola has remained a popular soft drink well into the first decade of the 21st century.

History

Early years

Coca-Cola was invented by John S. Pemberton, a former lieutenant colonel in the Confederate Army, in 1886 in Columbus, Georgia, originally as a cocawine called Pemberton's French Wine Coca. He was inspired by the formidable success of European Angelo Mariani's cocawine, Vin Mariani.

In 1885, when Atlanta and Fulton County passed Prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a carbonated, non-alcoholic version of French Wine Cola. The beverage was named Coca-Cola because originally, the stimulant mixed in the beverage was coca leaves from South America. In addition, the drink was flavored using kola (Cola) nuts, the beverage's source of caffeine. Pemberton called for 5 ounces of coca leaf per gallon of syrup, a significant dose, whereas in 1891 Candler claimed his formula (altered extensively from Pemberton's original) contained only a tenth of this amount. Contrary to popular belief, Coca-Cola never contained cocaine per se, which is a highly-refined extract of coca leaves and was always far too expensive to use in a mass-market beverage. However, as cocaine is one of numerous alkaloids present in the coca leaf, it was nevertheless present in the drink. Today, the flavoring is still done with kola nuts and the coca leaf. However, the coca leaves used today are "spent" leaves, the leftovers of the cocaine-extraction process, and the drink contains no trace of the stimulant.

Coca-Cola was initially sold as a patent medicine for five cents a glass at soda fountains, which were popular in America at the time thanks to a belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured a myriad of diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. The first sales were made at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886, and for the first eight months only nine drinks were sold each day. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and incorporated it as the Coca Cola Company in 1888. The same year, while suffering from an ongoing addiction to morphine, Pemberton sold the rights a second time to three more businessmen: J.C. Mayfield, A.O. Murphey and E.H. Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling his own version of the product (Pendergrast, 41–45).

In an attempt to clarify the situation, John Pemberton declared that the name Coca-Cola belonged to Charley, but the other two manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out of the business. Candler purchased exclusive rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her signature on the bill of sale had been forged, and subsequent analysis has indicated John Pemberton's signature was most likely a forgery as well (Pendergrast, 45–47).

In 1892, Candler incorporated a second company, The Coca-Cola Company (the current corporation), and in 1910 Candler had the earliest records of the company burned, further obscuring its legal origins. Regardless, Candler began aggressively marketing the product — the efficiency of this concerted advertising campaign would not be realized until much later. By the time of its 50th anniversary, the drink had reached the status of a national icon.

Coca-Cola was sold in bottles for the first time on March 12, 1894, and cans of Coke first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is now so familiar. Asa Candler was tentative about bottling the drink, but the two entrepreneurs who proposed the idea were so persuasive that Candler signed a contract giving them control of the procedure. However, the loosely-termed contract proved to be problematic for the company for decades to come. Legal matters were not helped by the decision of the bottlers to subcontract to other companies — in effect, becoming parent bottlers.

World War II

Before and during World War II, Coca-Cola adopted an apparent policy of ignoring the Nazis' practice of eugenics and anti-semitism. Several of Coke's top executives in Germany were prominent Nazi members. When the United States entered World War II, Coke began to represent itself as a patriotic drink by providing free drinks for American soldiers.

The American Army permitted Coca-Cola employees to enter the frontlines as "Technical Officers" when in reality they rarely if ever came close to a real battle. Instead, they operated Coke's system of providing refreshments for soldiers, who welcomed the beverage as a reminder of home. As the Allies advanced, so did Coke, which took advantage of the situation by establishing new franchises in the newly occupied countries.

Coca-Cola set up bottling plants in several locations overseas to assure the drink's availability to soldiers, setting the stage for the company's post-war overseas expansion. The popularity of the drink exploded as American soldiers returned home from the war with a taste for the drink. The beverage had become synonymous with the American way of life.

For more corporate history, see The history of the Coca-Cola Company.

New Coke to the present

In 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink. Some authorities believe that New Coke, as the reformulated drink was called, was invented specifically to respond to its commercial competitor, Pepsi. Double-blind taste tests indicated that most consumers preferred the taste of Pepsi (which has more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. New Coke was reformulated in a way that emulated Pepsi. Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi. The reformulation was led by the then-CEO of the company, Roberto Goizueta, and the President Don Keough.

It is unclear what part long-time company president Robert W. Woodruff played in the reformulation. Goizueta claims that Woodruff endorsed it a few months before his death in 1985; others have pointed out that, as the two men were alone when the matter was discussed, Goizueta might have misinterpreted the wishes of the dying Woodruff, who could speak only in monosyllables. It has also been alleged that Woodruff might not have been able to understand what Goizueta was telling him.

The commercial failure of New Coke therefore came as a grievous blow to the management of the Coca-Cola Corporation. It is possible that customers would not have noticed the change if it had been made secretly or gradually, and thus brand loyalty could have been maintained. Coca-Cola management was unprepared, however, for the nostalgic sentiments the drink aroused in the American public; some compared changing the Coke formula to rewriting the American Constitution.

The new Coca-Cola formula subsequently caused a public backlash. Gay Mullins, from Seattle, Washington, founded the Old Coke Drinkers of America organization, which attempted to sue the company, and lobbied for the formula of Old Coke to be released into the public domain. This and other protests caused the company to return to the old formula under the name Coca-Cola Classic on July 10, 1985. The company was later accused of performing this volte-face as an elaborate ruse to introduce a new product while reviving interest in the original. Donald Keough, company president at the time, responded to the accusation by declaring: "Some critics will say Coca-Cola made a marketing mistake. Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart."

The Coca-Cola Company is the world's largest consumer of natural vanilla extract. When New Coke was introduced in 1985, this had a severe impact on the economy of Madagascar, a prime vanilla exporter, since New Coke used vanillin, a less-expensive synthetic substitute. Purchases of vanilla more than halved during this period. But the flop of New Coke brought a recovery.

Meanwhile, the market share for New Coke had dwindled to only 3% by 1986. The company renamed the product "Coke II" in 1992 (not to be confused with "Coke C2", a reduced-sugar cola launched by Coca-Cola in 2004). However, sales falloff caused a severe cutback in distribution. By 1998, it was sold in only a few places in the Midwestern U.S.

On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005 they planned a launch of a Diet Coke product sweetened with the artificial sweetener sucralose ("Splenda"), the same sweetener currently used in Pepsi One. On March 21, 2005, it announced still another diet product, "Coca-Cola Zero," sweetened partly with a blend of aspartame and acesulfame potassium.

Coca-Cola formula

Main article: Coca-Cola formula

The exact formula of Coca-Cola is an infamous trade secret. The original copy of the formula is held in SunTrust Bank's main vault in Atlanta. Its predecessor, the Trust Company, was the underwriter for the Coca-Cola Company's initial public offering in 1919.^{urban legend states that only two executives have access to the formula, with each executive having only half the formula. The truth is that while Coca-Cola does have a rule restricting access to only two executives, each knows the entire formula and others, in addition to the prescribed duo, have known the formulation process.}

Although the Coca-Cola Company has long denied it, the Peruvian anti-drug agency, Comisión Nacional para el Desarrollo y Vida sin Drogas (DEVIDA), acknowledged in January 2005 that the company buys 115 tons of coca leaf from Peru and 105 tons from Bolivia per year, which it uses as an ingredient in its secret formula.^{Christmas labels featuring Santa Claus give a seasonal twist to these Coca-Cola bottles. The characteristic shape of the bottles is trademarked. It was designed to be universally recognizable, even when broken.}