**The Beginning:**
– In 1886, Dr. John Stith Pemberton created the first Coca-Cola syrup.
– Pemberton introduced Coca-Cola for five cents a glass, cheaper than other sodas.
– Most soda fountain drinks cost seven or eight cents at the time.
– Pemberton sold his stake in Coca-Cola to Asa Candler in 1888.
– Coca-Cola marketed itself as an affordable option.
**Bottling Contracts:**
– In 1899, Benjamin Thomas and Joseph Whitehead bought Coca-Cola bottling rights for one dollar.
– The contract had no expiration date, locking in the price forever.
– Candler underestimated the potential of bottling.
– The bottling contract forced Coca-Cola to sell syrup at a fixed price.
– Coca-Cola renegotiated the bottling contract in 1921.
**Advertising:**
– Coca-Cola associated its product with the five-cent price tag.
– The company’s profits depended on maximizing product sales.
– An aggressive marketing campaign linked Coca-Cola with the five-cent price.
– Coca-Cola successfully maintained the five-cent price until the late 1950s.
– Coca-Cola had to rebrand to raise prices, keeping it at five cents.
**Vending Machines:**
– Coca-Cola owned over 85% of vending machines in the U.S. in 1950.
– Vending machines limited price changes due to change-making challenges.
– Customers needed exact change to buy Coca-Cola from vending machines.
– The prevalence of vending machines kept the price of Coca-Cola at five cents.
– Vending machines began making change reliably in the 1950s.
**Attempts to Raise Prices:**
– The Coca-Cola Company tried different strategies to increase prices.
– One strategy involved having one in every nine vending machine bottles empty.
– The empty bottle strategy aimed to raise the effective price to 5.625 cents.
– Coca-Cola never implemented the empty bottle strategy on a large scale.
– Inflation in the 1940s made the nickel price unsustainable, leading to price increases.
This article needs additional citations for verification. (August 2021) |
Between 1886 and 1959, the price of a 6.5 US fl oz (190 mL) glass or bottle of Coca-Cola was set at five cents, or one nickel, and remained fixed with very little local fluctuation. The Coca-Cola Company was able to maintain this price for several reasons, including bottling contracts the company signed in 1899, advertising, vending machine technology, and a relatively low rate of inflation. The fact that the price of the drink was able to remain the same for over seventy years is especially significant considering the events that occurred during that period, including the founding of Pepsi, World War I, Prohibition, The Great Depression, changing taxes, a caffeine and caramel shortage, World War II, and the company's desire to raise its prices.
