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Why Coke Cost A Nickel For 70 Years


Liberty
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http://www.weku.fm/post/why-coke-cost-nickel-70-years

 

Prices change; that's fundamental to how economies work.

 

And yet: In 1886, a bottle of Coke cost a nickel. It was also a nickel in 1900, 1915 and 1930. In fact, 70 years after the first Coke was sold, you could still buy a bottle for a nickel.

 

Three wars, the Great Depression, hundreds of competitors — none of it made any difference for the price of Coke. Why not?

 

In 1899, two lawyers paid a visit to the president of Coca-Cola. At the time, Coke was sold at soda fountains. But the lawyers were interested in this new idea: selling drinks in bottles. The lawyers wanted to buy the bottling rights for Coca-Cola.

 

The president of Coca-Cola didn't think much of the whole bottle thing. So he made a deal with the lawyers: He'd let them sell Coke in bottles, and he'd sell them the syrup to do it. According to the terms of the deal, the lawyers would be able to buy the syrup at a fixed price. Forever.

 

I think they probably should also have mentioned the inflation during the period, but it's still an interesting bit of historical trivia.

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I just listened to this yesterday also. I thought that the technique that they used (giving every 10th vending machine customer an empty bottle) was pretty audacious. That would obviously never fly these days, but it was an interesting way to increase prices, and an interesting comment on pricing strategy.

 

The bottling agreement that Coke initially signed has to be one of the worst business deals in history (though they eventually overcame it).

 

Also that so many Coke glasses came from the company's efforts to control (set a minimum for) portions was interesting. We still have lots of Coke glasses to this day. I don't even drink Coke. It helped create their legendary brand awareness.

 

Fascinating case study in how certain omissions (i.e. luck) can create a whole lot of good stuff by accident.

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