How Coca Cola Became the KING of Soft Drinks


You are watching Kings! Every Saturday we tell the story of how big brands conquered the world. Welcome to ALUX.com! The place where future billionaires come to get inspired! Hello Aluxers and welcome back! Quick question for you: Pepsi or Coke? You’ve probably been asked that a few times in your life. And while you may have a preference, there is definitely no contest: Coca-Cola is the king of soft drinks. Most people just accept this as fact, but if you’re not convinced, we’re going to lay it all out there for you today and show you how Coca-Cola claimed the title. Let’s start by looking at the impressive background of this brand. So how many Coke products can you name? 10? 20? 50? Well, actually, Coca-Cola owns more than 500 brands representing 4,300 products around the world. Coke is sold in more than 200 countries and territories—in fact, the only two countries where it isn’t sold are North Korea and Cuba. The company is expanding year after year with new products and markets and doesn’t show any signs of slowing down. In 2018 alone, Coca-Cola launched about 600 new products with about 400 of those being non-soda options like juices, teas, and waters. An estimated 1.9 billion servings of Coca-Cola beverages are sold per day! Net operating revenues in 2018 were $31.9 billion with a market cap of 202 billion. Forbes named them as the 6th most valuable brand in the world with a brand value of 59.2 billion, only trailing Facebook, Amazon, Microsoft, Google, and Apple. By the way, Pepsi came in at number 29 on the list. 50% of their total sales come from their soft drinks, including Coke, Diet Coke, Coke Zero, Fanta, Sprite, Fresca, and more. Their other brands include Dasani, Minute Maid, Smartwater, Powerade, and Gold Peak teas. But it all started with the one and only original, more than 130 years ago. The first Coke beverage was served in a store in Atlanta, Georgia, on May 8, 1886. It was the creation of an Atlanta pharmacist named Dr. John S. Pemberton. He came up with a distinctively flavored syrup made from the coca leaf and kola nut that was then mixed with carbonated water at the local pharmacy. He claimed the drink could cure headaches, hangovers, and diseases. And, yes, the use of the coca leaf meant small amounts of cocaine could be found in the original recipe. Pemberton’s partner, Frank Robinson, came up with the name Coca-Cola and designed the trademark that is still used by the company today. In the drink’s first year, an average of nine Cokes were sold every day. Just 2 years after creating his famous invention, Pemberton passed away, but not before placing his drink recipe in the capable hands of Asa Griggs Candler. In 1888, Asa Griggs Candler purchased the formula for Coca-Cola for a rumored $2,300. He was the one who took Coke from a product to a company, but not without a little difficulty. The main problem was that while he owned the recipe, Pemberton’s son Charley owned the rights to the name ‘Coca-Cola.’ Candler tried to sell the drink under the names “Yum Yum” and “Koke” with two k’s, but these names failed to gain traction. He knew Coca-Cola was a very marketable name, and he made it his goal to gain the rights to it. In the meantime, Charley was selling his own version of the drink using the name Coca-Cola. hen John Pemberton died unexpectedly, Candler took the opportunity to try to gain full control of the Coca-Cola name and operation. He reportedly went directly to Pemberton’s wife and offered her $300 for the name without involving Charley in the discussion, and she apparently accepted. He became the sole proprietor of Coca-Cola on August 30, 1888. In 1892, Candler officially established the Coca-Cola Company, and he trademarked the brand the following year. But even before he had his hands on the company, a choice was made that would help him put Coca-Cola on the map. In 1886, Pemberton came up with a yet untried marketing strategy to get more people to drink Coca-Cola. He decided he would give the product away. This was a novel concept in the late 1800s, and it really caught the public’s attention. Pemberton started small by handing out coupons on the streets of Atlanta for a free drink. He also had free drink tickets mailed out to prominent citizens of the city. Pemberton would later be credited with inventing the first coupon because of this. Although he did invent the idea, it was his successor Candler who popularized it. He expanded Pemberton’s efforts by passing out free drink coupons in cities and towns across the US. By 1895, Coca-Cola was offered in every state and territory of the United States. Over the 20 year period of 1894 to 1913, free samples and coupon campaigns are what drove the popularity and success of Coca-Cola. In this time span, almost 8.5 million coupons for free drinks were redeemed, and about one out of nine Americans had tried Coca-Cola. Candler was also among the first businessmen to use branded merchandise to sell a product. He created Coca-Cola branded clocks, calendars, urns and more to sell in pharmacies. He wanted to make sure people would see the Coca-Cola brand wherever they went. By 1911, Coca-Cola was spending a million dollars per year on advertising alone. And this was necessary because of another innovative idea that grew the company exponentially. While Candler was focused on increasing fountain drink sales, Joseph Biedenharn came up with another creative idea and unknowingly revolutionized the entire soft drink industry in the process. Joseph was so pleased with the amount of Coca-Cola sales at his soda fountain that he had bottling machinery installed in his store in 1894. He bottled dozens of cases of Coca-Cola and sold them to farmers and other individuals. While he is credited with being the first bottler of Coca-Cola, it was two other men who brought this to a national scale. Benjamin Thomas and Joseph Whitehead from Chattanooga, Tennessee, made a one-dollar deal with Candler in 1899 that secured them exclusive rights to bottle and sell Coca-Cola throughout the United States. They joined in with a third partner named John T. Lupton to develop the revolutionary Coca-Cola bottling system. Candler sold them the rights for so little because he had no idea how much-bottled soda would take off as there had been no precedent set. Over the next 20 years, over 1,000 bottling plants were opened, and this system allowed for Coca-Cola to expand internationally. The first outside country to receive Coca-Cola was ironically Cuba in 1899, and exports to Europe began two years later. In 1916, a distinctive contour bottle was designed in order to set it apart from its many competitors, although the patent for that iconic packaging wouldn’t be granted until 1977. Today the Coca-Cola bottling system is known to be one of the largest, most expansive production and distribution networks worldwide. Coca-Cola’s aggressive advertising strategies and expansive distribution network cemented its success over the next hundred years and beyond. When Candler was elected mayor of Atlanta in 1916, he passed the company along to his children, who quickly sold it to other investors. In 1919, the company ended up in the hands of marketing genius Robert Woodruff, who further elevated the brand by expanding overseas and forming a partnership with the Olympic Games. Coca-Cola has diversified its products over the years, but unlike many of its competitors, it has stuck almost entirely to the beverage industry. Coca-Cola has also acquired a number of companies in its history, including Minute Maid, Barq’s, Fuze Beverage, and Honest Tea, but they are also looking to expand in a new direction. Coca-Cola is preparing to introduce the first non-soda under the Coke brand name. Coca-Cola Energy is scheduled to roll out in America in early 2020. This is a smart move for Coke as people might be shying away from sugary sodas, but the energy drink sector has been steadily growing. In fact, energy drink sales increased by more than 11% in 2018 alone. It will be offered in original coke flavor, cherry, and zero sugar varieties, but it will have about three times the amount of caffeine as a typical Coke. Interestingly, Coca-Cola did already have some involvement in the energy drink industry with a 16.7% stake in Monster Energy the company acquired in 2014. Monster was not happy to hear that they would be directly competing with Coke, and they even sued Coke in 2018 to prevent it from happening. However, Coke won the case, so Coca-Cola Energy will soon be hitting the shelves. Coca-Cola created the bottled soft drink market, and they have seemingly been one step ahead of every other soft drink company ever since. Their main competitor Pepsi was developed around the same time in the early 1900s, but they didn’t expand as rapidly and didn’t utilize as many innovative marketing techniques. Coca-Cola paved the way, and Pepsi followed in their footsteps. Coca-Cola held 60% of the market share among numerous competitors from 1948 up until the 1980s when Pepsi made a greater gain in the market. But Coca-Cola has never lost its status as the number one soft drink in the world. Today, in a crowded market, Coca-Cola still reigns supreme with 17% of the market share, while Pepsi comes in a distant second with 8%. And classic Coke is still the number one selling soft drink worldwide. They were the first big name in the industry, and every other player has been trying to emulate their success ever since. For these reasons and more, it’s obvious that Coca-Cola is KING of the soft drinks and doesn’t seem to be in any danger of losing its title anytime soon. Now that we’re wrapping up this video, we’d like to know: Do you think Pepsi or any other drink brand will ever be able to topple Coke as the king? Let us know what you think in the comments. And, of course of sticking with us until the end, here’s your Bonus. Coca-Cola has made dozens of acquisitions over the years, but here’s one you probably didn’t know about. In 1982, the company purchased the Columbia Pictures movie studio for $750 million. Just 7 years later, they sold Columbia to Sony for $3 billion. The studio’s films while under Coca-Cola ownership include The Karate Kid, Ghostbusters, and The Big Chill. Thank you for spending some time with us Aluxers! Make sure to subscribe so you never miss another video. We also handpicked these videos for you to watch next. As always the conversation continues on social media. Thanks again and we can’t wait to have you back tomorrow.

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