We’ve written extensively on demand planning and recently elaborated the new product introduction (NPI) process. It’s fun and instructive to look at instances where businesses have hit it out of the park when introducing a new product… and it can be just as fun (and insightful) to look at some of the flops. Today we’re focusing on the extremely competitive US soda pop market, as it’s a food and beverage (F&B) industry staple. We’ll start with a recent big win for a small startup company, and then we’ll examine one of the biggest fails in history–from an industry juggernaut.

Olipop: disrupting the $55 billion soda industry

You may have noticed the new crop of “healthier” sodas on the shelves of your local grocery store recently. While the trend toward more beneficial (or at least less-unhealthy) soft drinks has been growing for a couple of decades as more people learn about the gut-brain axis and want better, less sugary choices, a truly great-tasting and arguably healthy soft drink was sorely lacking, until Oakland-based Olipop launched in 2018 as the first “functional soda.” The startup company has since grown into a nationally recognized brand selling $400+ million annually, is found in 20% of US households, and is now valued at roughly $1.85 billion.

Company co-founder and CEO Ben Goodwin met his business partner and co-founder David Lester at their first prebiotic soda startup, Obi, and formulated their offerings using kefir water. They saw success over the next couple of years, getting their product placed in stores like Whole Foods and Safeway through a lot of leg work, and eventually topped $1 million in sales. However, the duo left Obi in 2016 and began formulating their first three flavors for Olipop: Ginger Lemon, Strawberry Vanilla, Vintage Cola. As with Obi, they had to beg small, local bay-area distributors to start carrying their soda, and eventually saw moderate success with boutique markets and even managed to score some NorCal Whole Foods shelf placement. As enthusiasm and word-of-mouth grew, Olipop began selling out deliveries overnight and Goodwin knew he had a real hit on his hands. Growth has been impressive, with help from health-minded celebrity endorsements and investment from the likes of Gwyneth Paltrow and even a former PepsiCo CEO. A robust social media campaign helped woo millennials and Gen Z fans, and by 2023 the company had reached $200 million in annual sales. Fortune reports that Olipop is now available at 50,000 stores nationwide.

Today’s consumers are hyper-informed, and any “functional formula” or other health-related claims are inevitably placed under intense scrutiny. Rival prebiotic soda brand Poppi (also founded in 2018) was slammed with a class-action lawsuit alleging that the company made baseless claims about the gut-health benefits of the beverage. The company settled the suit for $8.9 million in 2025 but has never admitted any wrongdoing. Olipop takes its “functional soda” and related health claims seriously, and as SFGate reports, “Olipop has funded independent, university-led research, including a Purdue University study recently published in the Journal of Food Bioactives validating the company’s health claims using an in vitro gut fermentation model. Among them are that drinking Olipop enhances the growth of beneficial bacteria in the gut and the production of short-chain fatty acids that are critical for gastrointestinal, metabolic, immune and even neurological health.” The company has also conducted a pilot clinical trial demonstrating that consuming Olipop on an empty stomach doesn’t produce near the blood sugar/glucose spikes compared to traditional sugary sodas. In a nation where roughly 38% of adults are pre-diabetic, this kind of entry into the F&B industry is something everyone should be able to get behind.

Olipop can probably claim credit not only for carving out a completely new space in the soft drink market, but popularizing the concept of prebiotic or “functional sodas” (that’s a term Goodwin coined). Even stores as mainstream as Walmart and Target have jumped on the prebiotic soda bandwagon and now offer Bloom Pop in most stores. Coca-Cola launched its own prebiotic brand leveraging its popular Simply juice lines, called Simply Pop, in February 2025. The aforementioned rival prebiotic soda brand Poppi was acquired by PepsiCo in May 2025, and Olipop’s success has certainly made the company a target for a similar buyout.

However, CEO Goodwin wants to grow his tastes-good, do-good company to $1 billion in annual sales on its own merit, and really make a difference in helping people make healthier choices. That’s a business philosophy that’s easy to swallow.

Coca-Cola’s epic NPI failure: New Coke

Even if you weren’t around in 1985, chances are you’ve heard of the New Coke debacle, a memorable and massive misstep from the cola giant. On April 23 of that year, Coca-Cola CEO Roberto Goizueta brazenly and confidently announced that the company was abandoning its famously secret soda syrup formula, unchanged for 9 decades, to make way for New Coke. Consumer-level taste testing had shown their researchers that many people preferred the sweeter taste of Pepsi, and the company had developed a new mixture that Goizueta promised would be a “bolder,” “rounder,” and more “harmonious” flavor. However, just 79 days later, Coca-Cola released a statement to the nation’s news outlets, who interrupted popular TV programming to announce that New Coke was being pulled from the market and that the old formula would be reinstated.

Multiple news reports and magazine articles have speculated as to the root cause of the Coca-Cola Company’s leaders’ risky and baffling move, but if we play devil’s advocate, it could be justified by the data the company had at the time. Though Coca-Cola’s sales were still very strong, its overall hold on the market had been steadily shrinking since just after World War II. Coca-Cola remained the USA’s single most popular soft drink, but its market share had shrunk from roughly 60% in 1948 to 21.8% by 1984. Naturally, this looks catastrophic, but in 1948 competitors were not nearly as numerous, nor the market as large. The explosion of supermarkets (~75% of soft drink sales) offering a large variety of soda choices, the growth of convenience stores, and the increase in the number of restaurants serving soft drinks had made the cola wars a true battleground, with brands and flavors spending millions upon millions annually to win customers. One could see how the company might have been getting nervous.

Another source states that President Reagan’s war on drugs during the 1980s had increased scrutiny of Coca-Cola’s continued inclusion of de-cocainized coca leaves in its popular formula, even though the soft drink had not contained any actual cocaine for over 80 years. It’s doubtful, in our view, whether this sentiment was widespread enough to have any real impact on the decision.

Still, Coke wasn’t struggling. Far from it, in fact. Pepsi had enjoyed a growing hold on soda drinkers, but was still second overall to the original Coke formula in the mid-’80s, at an 18.8% share of the total US soft drink market. A 1984 New York Times article reported that Coca-Cola’s Q4 profits were up 2.7 percent from a year earlier, at $124.6 million versus $121.3 million. Sales of soft drinks were strong everywhere but in Latin America, and revenues rose 6.3 percent, to $1.7 billion. The full year’s profits for the company were up by 9.1 percent, to $558.8 million, and per-share profits had grown 3.8 percent from the previous year.  

Coke’s US soft drink sales were up 7 percent for the year also, largely due to the breakout success of Diet Coke, which had only been on the market since mid-1982 but was already the nation’s fourth-best-selling soft drink and the leading low-calorie soda.

So, nobody could realistically claim that Coca-Cola was struggling, that sales weren’t strong, and that profits weren’t up. Hindsight is 20-20, as they say, but even at the time many business leaders, retailers, and most important of all, a large population of extremely loyal customers were absolutely baffled at the company’s decision to re-formulate the iconic, beloved Coca-Cola recipe.

Backlash was swift, widespread, and powerful. The company fielded up to 8,000 daily calls complaining about the change, and received 40,000 letters demanding a return to the previous soda formula. In an era without any online feedback forms or social media accounts, people really had to care enough to write and send letters to a soft-drink brand. In retrospect, it may seem obvious that fans of such an iconic American beverage would be somewhat rabid in their loyalty, but at the time Coca-Cola leadership was surprised at the vitriol, which included multiple protests and petitions nationwide. Allrecipies reports that one avid Coke drinker used his retirement savings to file a class-action lawsuit against the Company for deceptively using the classic Coke branding for its offensive new product. The suit was shortly dismissed, but the tide of discontent was quickly rising.

Time reported that “most who rallied to pop-up protest groups like ‘Old Coca-Cola Drinkers of America’ may have simply been taking their cue from their palates. Yet others appeared to be speaking more from their hearts as they likened Coke’s switcheroo to a blasphemous assault on their most cherished icons and precepts. Some compared it to burning the flag or rewriting the Constitution. ‘God and Coca Cola,’ had been ‘the only two things in my life,’ one complained in a letter, ‘now you have taken one of those things away from me.’”

Purely scientifically minded marketers or researchers might be confused by the powerful rejection of Coca-Cola’s change to their flagship product. However, data and software and consumer taste testing must also be balanced against the emotional bond customers can develop with brands. Coca-Cola isn’t “just” a soft drink. It represents something much more profound, a meaningful connection between customer and product that any business should be overjoyed to be able to forge.

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