Taste makers can miss the mark

2/26/2013

Once again, we are seeing the terrifying specter of New Coke. Or at least a reasonable facsimile.

New Coke, you will recall, was one of the marketing blunders of all time, a conceptual mistake on the order of the Edsel. In 1985 — has it really been 28 years? — the Coca-Cola Company came shockingly close to accidentally committing corporate suicide.

Sales were flat. Worse yet, the brand's only real competitor, Pepsi, was slowly gaining in market share. So the wise men in charge of Coke put their heads together and shot themselves in the foot.

They changed the iconic formula for Coke, the formula that, at that time, had seen 99 years of success, the formula that made the company the undisputed king of the lucrative cola field. They made their drink sweeter, with less of a bite. As one comedian said at the time, they made Pepsi-flavored Coke.

The public outrcy was immediate and overwhelming. It turned out that everyone loved the old Coke, even people who were starting to drink Pepsi. Their connection to the taste was more emotional than anyone had suspected, and the ensuing and universal bad press the company endured for a full 79 days before the Cokeheads admitted they had made a major, major mistake.

They brought back the old formula, called it Classic Coke, and watched as sales soared through the roof. Pepsi has not come close to challenging its soft-drink sales ever since.

So successful did Classic Coke become that some conspiracy theorists (call them cola truthers) suggested the whole episode was an extraordinarily clever brand-building campaign. But even Coke's own Web site notes that, for some, the day New Coke was released "was a day that will live in marketing infamy."

The whole debacle has served as a powerful warning to other companies for nearly three decades, a cautionary tale of what can happen when you tinker with success. For the most part, every major company has heeded the warning — until now.

Maker's Mark bourbon is a small-batch whiskey with a smooth, caramel flavor that makes it one of the most popular premium bourbons on the market. The problem is that it has recently become too popular. The alcoholic-beverage market has long been subject to fads and trends, and sales of bourbon (and also rye) have been soaring. According to parent company Beam, sales of Maker's Mark rose 15 percent in 2012 alone and 14 percent the year before that.

Sounds great, right? But Maker's Mark ages for six full years. And six years ago, no one at the company predicted the sudden increase in demand. They put away the amount they thought they would need, so today's demand has been far exceeding supply.

Most companies would simply raise the price of their current stock and enjoy the glory of increased profits. But the Maker's Marketeers know that one reason for their success is their price, which is somewhat lower than many other premium bourbons. In other words, if they raise the price they risk driving away their customers.

And that is when they had their New Coke moment: They decided to meet the increased demand for their limited supply of whiskey by literally watering down the whiskey. They announced they would lower their product's strength from 90 proof to 84 proof, a difference of about 6.7 percent.

Immediately there arose a cacophonous howl of protest. Despite corporate assurances that there would be no difference in taste, the customers said no, they were pretty sure there would be about a 6.7 percent difference. Comedians, too, got in on the act (the NPR game show Wait, Wait…Don't Tell Me noted the whiskey would now get you "6.7 percent less drunk" and compared the change to teenagers drinking from their parents' bottles and adding water to keep the level in the bottle the same).

The Maker's Mark folks quickly got the message. In the space of just one week — a remarkably short time for a corporation to do anything — they reversed themselves and decided not to change the formula for their booze. As part of their official statement, they said, "You spoke. We listened. And we’re sincerely sorry we let you down."

Call it their Classic Coke moment. Everyone loves them again and they are enjoying a spike of positive interest. But the question remains: What are they going to do about too many people wanting too little bourbon?

Contact Daniel Neman at: dneman@theblade.com or 419-724-6155.