Cola Wars

I saw a post today written by a friend who apparently hopes that Coca-Cola will go back to using cane sweetener vice corn sweetener in their flagship soft drink. According to today's paper, even though Donald Trump has stated categorically that Coke will go back to using cane sugar, Coca-Cola has said there are no plans to do that.

On the surface this seems like a trivial matter and one might wonder, “Well, if people really like cane sugar better, then why doesn't coke simply go back to cane sweetener?” There's a lot more to this story than simply a choice of one over the other. The cost of sugar in the United States started to rise in the late 1970s and into the 1980s as a result of government-imposed tariffs, prompting soft drink manufacturers to switch to high-fructose corn syrup (HFCS) as a cheaper alternative to sugar. By the mid-1980s, all of the major soft drink brands had switched to HFCS for their North American products, with the original formula of Coca-Cola being one of the last holdouts. In most countries, sugar is still used rather than HFCS.

First of all, Coca-Cola played one of the best bait and switch games ever foisted on American consumers when, in 1985, the company unveiled “New Coke.” New Coke was sweeter and had a somewhat different flavor than what Coca-Cola fans were used to. While the new Coke did not grab the old Coke’s market share and in fact was not particularly loved, we would later see lots of possible reasons why that happened.

One that was frequently cited was simply nostalgic brand loyalty to the old product. Another was that the new flavor simply wasn't as good or the same as the old Coke. What snuck by many people was that New Coke was sweetened with corn sweetener vice cane sugar. Just 79 days after the introduction of New Coke, when it had become obvious to Coca-Cola inc. that the new product was not loved like the old product, they came out with “Coca-Cola Classic”, which they were happy to have all consumers believe was simply the old Coke reborn. But, in reality the “new” old Coke had one significant difference. It retained the corn sweetener of the “New Coke.”

The vast majority of Coca-Cola fans happily greeted the return of Coca-Cola classic without understanding that what the Coca-Cola corporation had done was to switch sweeteners for economic considerations and, rather than simply change the classic coke recipe to substitute corn sweetener for cane sugar, actually first issued the New Coke so that the break in continuity when the Coca-Cola classic was restored would be less noticeable. By and large it worked.

What were the economic considerations? Simple really. Consider the current SecState’s statement, made while he was a Florida Senator, that “Sugar is a national security issue!” Yeah, he said that. He and his predecessors were cheerleaders for price supports on US cane sugar production, especially since the area of Florida below Lake Okeechobee has become US Cane Sugar central, beginning when the Fanjul family of Cuban sugar barons fled Castro’s Cuba and bought up thousands of acres of that land and began cane production on a grand scale. Marco Rubio and other Florida state level politicos have received and continue to receive massive campaign financial support in exchange for pushing for ludicrous federal price supports on US produced cane sugar. Considering the vast range of products retailed in the US which depend on cane sugar, we as a nation are paying a lot into the pockets of a relatively small market segment

The result? US consumers, commercia and private, pay more than twice the average world market price for cane sugar. Coke simply made an economic decision which has saved them multi millions, approaching billions, over the years since the shift to corn sweetener. Even without US price supports, cane sugar is more costly than corn sweetener. As one example, Mexican Coke is still made with cane sweetener. It is about 32 % more expensive.

Coke did what they did largely in the name of retaining brand loyalty while making an economic decision forced upon them by a government policy which favored the few at the expense of many, one of which is the nation’s largest soft drink purveyor.

Finally, one wonders why the hell an American President who drinks Diet Coke, sweetened with aspartame, gives a shit about which real organic vegetable sweetener is used in a beverage he doesn’t drink.