Thursday Aug 1, 2024
"Without cheap sugar, Coke had no business. The company made its millions selling an inexpensive, nonessential beverage in volume, and it could only turn a profit on bulk sales if it kept raw material costs down, especially for sugar, its most expensive ingredient by far. Customers simply were not willing to pay a premium price for soft drinks. Remarkably, from 1886 to 1950, Coca-Cola maintained a 5-cent price for its beverage. This was due in part to Coke chairman Robert Woodruff's constant vigilance. He insisted that company bottlers and soda jerks maintain this price for Coke, even when operating expenses increased, and he spent millions on advertisements featuring Coke's nickel price in an attempt to ensure local bottler and retailer compliance with his policy. In the 1930s, when Coke began a concerted campaign to sell its beverages in coin-operated vending machines that only accepted 5-cent coins, Woodruff had an added incentive to preserve the nickel policy. Technology dictated that any price increase in Coke would require a jump to 10 cents in order to meet single-coin vending machine requirements, a change, executive Ralph Hayes noted, that would have been 'murderous' to the company."
Comments