Historical Society of

Pottawattamie County

County Seat Council Bluffs, Iowa

1975: the Pepsi Challenge Arrived at Midlands Mall

For the first time in 99 years the recipe for making Coke was changed.

     Coke was the first cola, a creation of Atlanta pharmacist Dr. John S. Pemberton in 1886.  It's unique taste led to rapid growth, and a host of competitors.  North Carolina drug store owner Caleb Bradham formulated Pepsi-Cola (then called "Brad's Drink") in 1898; the Hatcher family of Columbus, Georgia, first brewed RC Cola ("Chero-Cola") in 1910.  Dozens of other colas popped up at pharmacies and local bottlers across the country.

     Being first doesn't guarantee long term success, and in the 1970s Coca-Cola found its once-dominant market share slipping behind Pepsi.  Each beverage had its fans, but the loyalty of a significant number of people seemed up for grabs; many folks in surveys came across as neutral, believing the two drinks were essentially the same.

     In 1975 Pepsi embarked on a nationwide campaign to win over those who had no expressed preference.  The Pepsi Challenge was simple.  The crew would set up a table in a high traffic public place and ask passerby's to sample the colas in two unmarked paper cups.  The person was asked which of the two drinks they preferred.

     Locally the Pepsi Challenge was kicked off at the Omaha Press Club, at a reception in which area media were invited.  Over the next few years the challenge popped up at various places across the metro, including Council Bluffs' Midlands Mall in the courtyard near Brandeis.

          Sometimes people chose the cup that held Coke; but most people chose Pepsi.  Not only did this impress those previously neutral, Pepsi advertised that "half of the people who said they preferred Coke actually chose Pepsi" as having the better taste.

     This did not go unnoticed in Atlanta.  In an attempt to re-energize the brand and reverse the slipping market share the president of Coke announced to the company "there are no sacred cows" and for the first time in 99 years the recipe for making Coke was changed.

     The taste change was anything but haphazard.  Under the code name "Project Kansas" the top secret operation  was conducted with all the precision of a military operation.  Indeed the memo outlining the project as a "bold-stroke attempt for total victory" compared the plan to the Allied invasion of Europe in 1944.  New formulas were tested and retested on hundreds of subjects for four years and no detail left to chance.

     New Coke hit the stores April 23, 1985.  The company expected a big reaction, and they got it-- but it wasn't the type of response they anticipated.  Pepsi jumped on the event as a complete victory for them, buying full page ads in major metropolitan newspapers exclaiming simply, "The Pepsi Challenge is over.  Pepsi won."  That was predictable.  What wasn't expected was the response of the public.  The corporate switchboard lit up with over 1500 complaints a day.  Angry letters poured in, including one addressed to the CEO requesting his autograph, explaining that "the signature of one of the dumbest executives in American history should be worth a fortune someday."  Groups with names like "Society For the Preservation of the Real Thing" and Old Cola Drinkers of America" sprang up.

     The company was in a bind, having to either ignore the pleas of their most loyal customers or do an about face and admit their "improved" Coke wasn't really improved at all.  

     After 79 days the company decided to try and do both.  New Coke remained on store shelves as "Coca Cola" and old Coke was returned to the market as Classic Coke.  The new Coke proved unpopular and was quietly removed from the market place without fanfare in 2002.  The font size of "Classic" on Coke cans was continuously shrunk and dropped from the label entirely in 2010.

(Story by Richard Warner, who took the Pepsi Challenge in 1975 and chose Pepsi.  Dr. Warner is editor of the Historical Society's "Member Journal.")

The Pepsi Challenge arrived in Council Bluffs at Midlands Mall outside the Brandeis store.

(Above) The vault in Atlanta, Georgia that supposedly protects the ultra top secret recipe for Coca Cola.  (Below left) The Coca Cola company introduced the first diet soft drink, Tab, in 1963.  In 1982 they created Diet Coca Cola.  (Below right) Grocery store add for Pepsi Cola from the mid 1970s.  Harmony Court Retirement Community occupies the site of the Shaver's store today.  Neil Shaver, son of the store's founder, was an excellent amateur actor.  In the 1960s the company sponsored the late night movie on one of the local television channels.  Mr. Shaver used his talents to introduce the movies and developed quite a following himself.

Has Forty Years Changed Taste Preferences?

It's been four decades since the Pepsi Challenge was introduced.  If it were repeated today would Pepsi still win?

Apparently so.  We bought a bottle of Coke and one of Pepsi, rounded up forty paper cups, and tried the test with twenty people, ranging in age from 23 to 95.  Eighty percent chose Pepsi as the better taking beverage.

Bring back some memories with Pepsi and Coke jingles from the 70s...

Enjoy the memories and stories like this?  Join the Historical Society and get them all year long in each issue of our Member Journal!