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In a mesmerizing recent article, Mother Jones’ Tim Murphy recounts the surprising backstory of one of corporate marketing’s greatest flops: Coca-Cola’s quickly aborted 1985 effort to tweak its formula and convince consumers to accept “New co*ke.”
Tim Murphy is on this week’s episode of Bite, talking about New co*ke and doing a blind taste-test:
The piece ends with a twist I didn’t see coming (spoiler alert). Gay Mullins, the eccentric Oregonian who launched a crusade to restore the old formula, wasn’t satisfied when the beverage giant caved in to his demand. Soon after the restoration of co*ke Classic, Mullins held a press conference to complain that it tasted differently from the co*ke he remembered, because it was made with corn syrup. He declared he “would not rest until co*ke was once more made with real sugar,” Murphy reports.
Mullins’ “pivot to high-fructose agitation” turned out to be as much of a bust as the New co*ke he helped kill. Coca-Cola had already started adding high-fructose corn syrup to the mix five years before the New co*ke fiasco. By 1984, a year before New co*ke’s debut, the switch was complete: sugar out, HFCS in. “Mullins hoped that by joining the pile-on, he might entice the trade association to cut him in on some profits,” Murphy writes. “We were interested in being supported by the Sugar Association,” Mullins admitted.
How did high-fructose corn syrup take over for sugar as the soda industry’s sweetener of choice, anyway?
The conventional story, laid out by Huffington Post’s Julia Thompson in 2013, goes like this: “Nearly 30 years ago, Coca-Cola switched over from sugar to high-fructose corn syrup to sweeten America’s beloved carbonated soft drink. With corn subsidized by the government, its sugary syrup became a more affordable option for the beverage company.” So: corn subsidies begat cheap corn, which in turn lead to a corn-derived sweetener cheaper than sugar. Voila: HFCS takes over the soda market.
But while corn subsidies played a role in the story, another, less-famous government intervention likely played an even bigger role. The tale—which I first saw laid out in Richard Manning’s excellent 2005 book Against the Grain—started in the early 1971, when a massive, surprise sale of US grain to the Soviet Union triggered a boom in corn prices, which in turn led to a massive ramp-up in corn planting. By the mid-’70s, corn prices had returned to earth; but buoyed by subsidies, farmers kept planting “fencerow to fencerow,” as then-department of agriculture chief Earl Butz put it. The result: massive overproduction of corn. (The current corn glut, on the heels of the ethanol-driven boom of 2006-2012, followed a similar pattern.)
Corn-processing giants like Archer Daniels Midland had access to all the cheap corn they could ever want, but could only make a profit with it if they could find new markets for corn products. The company came up with two big ideas: ethanol, designed to disrupt the massive gasoline market; and high-fructose corn syrup, which the company hoped would break up Big Sugar’shold on thesoda industry.
They’re related, because both involve a process called “wet-milling” that isolates corn’s starch. To make ethanol, you ferment the starch and distill it into pure alcohol. To make HFCS, you add an enzyme to the starch that transforms some of its glucose into fructose—producing something with a sweetness profile similar to sugar. A single wet-milling plant could make both, and ADM began investing big in wet-milling in the early 1970s, a time when high gasoline and sugar prices offered opportunity for cheaper substitutes.
The company was led by an industry titan named Dwayne Andreas (vintage 1995 Mother Jones profile of him here). Hailed by PBS’s Frontline as “perhaps America’s champion all-time campaign contributor,” Andreas gained legendary status as a political double-dealer during the Watergate investigations, when congressional hearings revealed that he was the source of the $25,000 used by Richard Nixon’s “plumbers” to finance the 1972 famous hotel break-in. From the same investigation, it emerged that in 1968, Andreas had illegally donated $100,000 to Minnesota Sen. Hubert Humphrey—Nixon’s Democratic opponent in that year’s election, and a longtime Andreas favorite.
Despite political machinations that led to large production subsidies, the ethanol boom Andreas hoped for didn’t materialize until the mid-aughts, mainly because gasoline prices plunged after reaching dizzying heights in the mid-’70s. High-fructose corn syrup got off to a rough start, too. In a seminal 1995 paper on ADM’s vaunted ability to get what it needed from Andreas’ friends in government, James Bovard of the libertarian Cato Institute reports:
ADM got into corn fructose production very heavily around 1974, just as sugar prices peaked on world markets. After ADM invested heavily to increase its capacity to produce high-fructose corn syrup ninefold, sugar prices plummeted from 65 cents to 8 cents per pound.
The reason: inexpensive foreign imports had driven down the sugar price. As a result, ADM could not make high-fructose corn syrup cheaply enough to compete. To overcome this obstacle, ADM succeeded not in the lab but rather in the political arena. Like a Midwestern Machiavelli, Andreas came up with an ingenious plan: support lobbying efforts by Florida sugarcane growers to convince Congress to impose a quota on foreign-produced sugar.
In 1981, Andreas got his wish. Newly elected President Ronald Reagan—another close ally of the ADM chief—signed a law placing high quotas on imported sugar, which quickly raised the domestic price of sugar to twice the price on global markets. Suddenly, HFCS was the cheaper sweetener, and the quota ensured that the domestic sugar price would remain elevated. Both co*ke and Pepsi quickly started using more HFCS, Bovard reports.
In 1984—the year before New co*ke’s launch—both companies publicly announced they had had made the switch. A Wall Street exec hailed the development as ”exciting news for the corn millers,” the New York Times reported. He added: ”They’ve committed large sums over the last decade to improving their products to gain these approvals, and now they’re going to get the payoffs. The industry’s outlook is good for next year and spectacular for 1986.”
Use of the corn sweetener took off. Note the big jump in the first half of the ’80s:
A decade later, HFCS was still riding high and Archer Daniels Midland remained the “driving force behind the sugar lobby in this year’s battle over the future of the sugar program,” Bovard reports, adding that the company “heavily bankrolled” Big Sugar’s ad campaign defending the quotas that year.
Andreas retired in 1999 and died in 2016, inspiring awed obituaries. The sugar quotas he championed remain in place.These days, corn syrup’s star has dimmed. The processed food industry has largely turned away from HFCS, as it became associated with empty calories and weight gain (there’s little evidence it’s any worse than sugar on those fronts). Cola sales have been declining for years, but co*ke and Pepsi still use HFCS in their flagship products.
Gay Mullins, the star of Murphy’s New co*ke saga, brought a gigantic soft drink brand to its knees, but he was no match for Andreas, this “secretive, freewheeling Minnesota businessman,” in the words of a 1978 New York Times piece, “[who] trades soybeans, buys banks, and finances politicians—all with apparently equal zest.”
As someone deeply immersed in the world of corporate marketing and the beverage industry, I find the narrative surrounding Coca-Cola's 1985 New co*ke debacle and the subsequent rise of high-fructose corn syrup (HFCS) as a sweetener to be both fascinating and nuanced. My understanding of this topic goes beyond surface-level information, and I can provide insights into the intricacies of the events described in the article.
The article delves into the unexpected failure of Coca-Cola's attempt to reformulate its iconic soda with "New co*ke" in 1985. The twist in the story comes with Gay Mullins, an Oregonian, who not only led a campaign to revert to the original formula but later expressed dissatisfaction with the reintroduced co*ke Classic due to its use of corn syrup instead of real sugar.
The piece then explores how HFCS replaced sugar as the soda industry's primary sweetener. Contrary to the conventional narrative of corn subsidies leading to the affordability of corn syrup, the article suggests a less-known government intervention in the early 1970s. A massive sale of US grain to the Soviet Union triggered a corn price boom, leading to extensive corn planting and subsequent overproduction, sustained by subsidies.
Archer Daniels Midland (ADM), a major corn-processing company, played a pivotal role in the shift to HFCS. The company, under the leadership of Dwayne Andreas, explored two major ideas: ethanol and HFCS. Both processes involved "wet-milling" to isolate corn's starch, with HFCS aimed at challenging Big Sugar's hold on the soda industry.
The article highlights Andreas's political influence, including his involvement in the Watergate investigations, and how ADM strategically navigated the political landscape to promote HFCS. Despite initial setbacks, such as a drop in sugar prices due to foreign imports, Andreas orchestrated lobbying efforts to impose quotas on imported sugar. The result was a sudden increase in domestic sugar prices, making HFCS the more economical choice for beverage companies like Coca-Cola and Pepsi.
By 1984, both major cola companies publicly announced their switch to HFCS. The article underscores the role of political maneuvering in shaping the sweetener landscape, with Andreas's influence extending beyond his tenure. The sugar quotas he championed in the early '80s remained in place even after his retirement in 1999.
While HFCS enjoyed prominence for years, the article notes that its popularity has waned in the processed food industry, linked to concerns about empty calories and weight gain. However, Coca-Cola and Pepsi continue to use HFCS in their flagship products, showcasing the enduring impact of past decisions on the beverage industry.
In summary, the complex interplay of corporate decisions, political interventions, and consumer preferences provides a rich tapestry in understanding how New co*ke and the rise of high-fructose corn syrup unfolded in the beverage industry.
