price of a bottle of coke in 1980
Fixed price of Coca - Cola from 1886 to 1959 - wikipedia Fixed price of Coca - Cola from 1886 to 1959 An 1890s advertising poster for five - cent Coca - Cola The fixed price of Coca - Cola from 1886 to 1959 refers to a period in the United States during which the price of 6.5 oz of Coca - Cola fluctuated very little to consumers . There were many reasons for this lack of movement , including bottling contracts signed by The Coca - Cola Company in 1899 , advertising , vending machine technology , and the lower rate of inflation relative to more recent times . The fixed price of Coca - Cola from 1886 to 1959 is especially significant given the potentially influential events that occurred during the same time period , including the founding of Pepsi , World War I , prohibition , changing taxes , a caffeine and caramel shortage , and World War II . Much of the research on this subject comes from `` The Real Thing '' : Nominal Price Rigidity of the Nickel Coke , 1886 -- 1959 , a 2004 paper by economists Daniel Levy and Andrew Young . Contents 1 The beginning 2 Bottling contracts 3 Advertising 4 Vending machines 5 Attempts to raise prices 6 The end of the fixed price of Coca - Cola 7 References 8 External links The beginning ( edit ) In 1886 , Dr. John Stith Pemberton , a pharmacist and former confederate soldier , produced the first Coca - Cola syrup . On May 8 , 1886 , he brought a jug of his syrup to a local pharmacy on Peachtree road in Atlanta , Georgia . According to the chronicle of Coca - Cola , `` It was pronounced ' excellent ' and placed on sale for five cents a glass '' . Although most soda fountain drinks cost seven or eight cents at the time ( for a 6.5 oz glass ) , Coca - Cola chose five cents and specifically marketed itself as an affordable option . Pemberton sold his remaining stake in Coca - Cola to Asa Candler in 1888 . Bottling contracts ( edit ) In 1899 , Benjamin Thomas and Joseph Whitehead , two lawyers from Chattanooga , Tennessee , approached Coca - Cola President Asa Candler about buying Coca - Cola bottling rights . At the time , soda fountains were the predominant way of consuming carbonated beverages in the United States . Candler sold the rights to the two lawyers for one dollar , which he never ended up collecting . It is speculated that Candler sold the bottling rights so cheaply because he ( a ) truthfully thought bottling would never take off , and ( b ) was granted the ability in the contract to `` pull their franchise if they ever sold an inferior product '' . Unfortunately for Candler , the contract at the agreed - upon price had no expiration date , so he had essentially agreed to sell Coca - Cola at the same price forever . Advertising ( edit ) Although Candler predicted differently , bottling did indeed become popular ( surpassing fountain sales in 1928 ) , and the non-expiring contract meant that Coca - Cola had to sell their syrup for a fixed price . That meant Coca - Cola 's profits could be maximized only by maximizing the amount of product sold and that meant minimizing the price to the consumer . Toward this end , Coca - Cola began an aggressive marketing campaign to associate their product with the five - cent price tag , providing incentive for retailers to sell at that price even though a higher price at a lower volume might have made them more profit otherwise . The campaign proved successful , and bottlers did not increase prices . Coca - Cola was able to renegotiate the bottling contract in 1921 . However , in part because of the costs of rebranding ( changing all of their advertisements as well as the psychological associations among consumers ) the price of Coca - Cola remained at five cents until the late 1950s . Vending machines ( edit ) An early Coca - Cola vending machine Another reason the price of Coca - Cola remained fixed at five cents , even after 1921 , was the prevalence of vending machines . In 1950 , Coca - Cola owned over 85 % of the 460,000 vending machines in the United States . Based on vending machine prices at the time , Levy and Young estimate the value ( in 1992 dollars ) of these vending machines at between $286 million and $900 million . Because existing Coca - Cola vending machines could not reliably make change , customers needed to have exact change . The Coca - Cola company feared that requiring multiple coins ( e.g. , six pennies or one nickel and one penny for six - cent Coke ) would reduce sales and cost money to implement , among other things . Reluctant to double the price to a dime -- the next price achievable with a single coin -- they were forced to keep the price of Coca - Cola at five cents , or seek more creative methods . This constraint played a role into the 1950s , when vending machines began to reliably make change . Attempts to raise prices ( edit ) The Coca - Cola Company sought ways to increase their prices , even approaching the U.S. Treasury Department in 1953 to ask that they mint a 7.5 cent coin . The Treasury was unsympathetic . In another attempt , The Coca - Cola Company briefly implemented a strategy where one in every nine vending machine bottles was empty . The empty bottle was called an `` official blank '' . This meant that , while most nickels inserted in a vending machine would yield cold drinks , one in nine patrons would have to insert two nickels in order to get a bottle . This effectively raised the price to 5.625 cents . Coca - Cola never implemented this strategy on a national scale . The end of the fixed price of Coca - Cola ( edit ) Inflation ( CPI ) in the United States Throughout its history , the price of Coca - Cola had been especially sticky , but in the 1940s , inflation in the United States had begun to accelerate , making nickel Coke unsustainable . As early as 1950 , Time reported Coca - Cola prices went up to six cents . In 1951 , Coca - Cola stopped placing `` five cents '' on new advertising material , and Forbes Magazine reported on the `` groggy '' price of Coca - Cola . After Coca - Cola president Robert Woodruff 's plan to mint a 7.5 cent coin failed , Business Weekly reported Coke prices as high as 6 , 7 , and 10 cents , around the country . By 1959 , the last of the nickel Cokes had been sold . References ( edit ) ^ Jump up to : NPR . `` Episode 416 : Why The Price Of Coke Did n't Change For 70 Years '' . Planet Money . NPR , 13 Nov. 2012 . Web . ^ Jump up to : Levy , Daniel ; Young , Andrew ( August 2004 ) . `` '' The Real Thing `` : Nominal Price Rigidity of the Nickel Coke , 1886 -- 1959 '' . Journal of Money , Credit and Banking . 36 ( 4 ) : 765 -- 799 . JSTOR 3839041 . Jump up ^ `` The Chronicle of Coca - Cola '' . The Chronicle of Coca - Cola . N.p. , n.d. Web . Jump up ^ Laprad , David ( 23 July 2010 ) . `` A Brief History of the Chattanooga Coca - Cola Company '' . Hamilton County Herald . Karnasiewicz , Sarah . `` Fizzy Business '' . Imbibe Magazine . N.p. , July 2011 . Web . Frandzel , Steve . `` Economist : How Coke Stayed at a Nickel for Seven Decades '' . Emory University Home Page . N.p. , 15 Nov. 2012 . Web . Harford , Tim . `` The Mystery of the 5 - cent Coca - Cola '' . Slate Magazine . Slate , 2007 . Web . `` The Coca - Cola System '' . The Coca - Cola Company . N.p. , n.d. Web . External links ( edit ) Chronicle of Coca - Cola Image of 5 cent advertisement Image of Coca - Cola vending machine Image of `` as always 5 cent '' advertisement Retrieved from `` https://en.wikipedia.org/w/index.php?title=Fixed_price_of_Coca-Cola_from_1886_to_1959&oldid=847677588 '' Categories : Coca - Cola Pricing 19th - century economic history 20th - century economic history Talk Contents About Wikipedia Add links This page was last edited on 27 June 2018 , at 01 : 34 ( UTC ) . Text is available under the Creative Commons Attribution - ShareAlike License ; additional terms may apply . By using this site , you agree to the Terms of Use and Privacy Policy . Wikipedia ® is a registered trademark of the Wikimedia Foundation , Inc. , a non-profit organization . About Wikipedia
1. Fixed price of Coca-Cola from 1886 to 1959
2. Fluctuation of Coca-Cola prices
3. Bottling contracts and their impact on pricing
4. Advertising strategies for Coca-Cola
5. Influence of vending machines on pricing