Fizzled Out: Why Coca-Cola Purposely Designed a Soft Drink to Fail

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In December 1992, media outlets from around the country filed into the Hayden Planetarium at New York City's American Museum of Natural History for what soft drink giant Coca-Cola was trumpeting as a “truly out-of-this-world experience.” In front of reporters, the company's North American president, Doug Ivester, unveiled a 16-ounce silver can that he hoped would change the landscape of soda.

The product was Tab Clear, a new version of the sugar- and calorie-free diet drink first introduced in 1963. While it retained its bubbles, the liquid was transparent, an obvious nod to rival Pepsi’s introduction of Crystal Pepsi earlier that year.

Publicly, Ivester boasted that Tab Clear would be yet another success in Coca-Cola’s long history of refreshment dominance. But behind the scenes, Ivester and chief marketing officer Sergio Zyman were convinced Tab Clear would be a failure—and that is exactly what they hoped would happen. Flying in the face of convention, the launch of Tab Clear was deliberately designed to self-destruct.

 
 

In the early 1990s, beverage manufacturers were heavily preoccupied with the idea of clear drinks that communicated a sense of wellness. The Coors company even produced a clear alcoholic malt beverage, Zima, to capitalize on the craze, but porting it over to the soft drink market was nothing new. In the 1940s, Soviet leader Georgy Zhukov used his friendly relationship with the U.S. to make an appeal for Coca-Cola to produce a clear version of their drink so he could enjoy it surreptitiously and without being accused of indulging in a capitalist product; the soda maker removed the caramel from the recipe, which essentially de-pigmented it. Coca-Cola also produced Sprite, a fizzy, lemon-tinged drink that didn’t use coloring.

But it wasn’t until Pepsi unveiled Crystal Pepsi in 1992 that marketing departments began to pay close attention to transparency in their product. Crystal Pepsi was essentially a fruit-flavored variation of regular Pepsi, with all the typical amounts of sugar and calories but no caffeine. That light could pass through the beverage was a novelty, albeit one that Pepsi believed could help them carve out a 2 percent slice of the $48 billion soft drink market. And if Pepsi could do that, it would mean less money for Coca-Cola.

Like a boxer preparing a counter-attack, Coke couldn’t simply sit back and allow Pepsi to strike without retaliation. But few within the company were sold on the longevity of the clear soda craze. Worse, the company had stumbled badly with New Coke in 1985, a new formula intended to replace the classic version that drew public criticism and created a public relations disaster. Tempting fate with a Clear Coke was out of the question.

Zyman had the answer. Before coming to Coke, Zyman had been a director of sales and marketing for Pepsi; he defected to Coca-Cola just in time for the highly successful launch of Diet Coke in 1982. After a sabbatical, Zyman—a notoriously combative executive who earned the nickname the “Aya-Cola” for his management style—returned as chief marketing officer and devised an ingenious plan to stifle Crystal Pepsi without risking the reputation of Coca-Cola Classic. His sacrificial pawn would be Tab.

Sometimes stylized as “TaB," the drink had been introduced in 1963 as an alternative for calorie-conscious consumers. Sold in a pink can, it was targeted specifically at women concerned about their weight and marketed as a solution to increase sex appeal. Tab, ads claimed, could help consumers “be a shape he won’t forget … Tab can help you stay in his mind.”

With Diet Coke available to help keep marriages from crumbling, Tab was relegated to an afterthought, falling from 4 percent of Coke's overall market share to just 1 percent. Zyman believed it was expendable. If Tab Clear happened to catch on, fine. If it didn’t, the failure wouldn’t reflect poorly on the Coke brand.

But Zyman wasn’t content to simply try to compete with Crystal Pepsi. In his mind, Tab Clear was what consumer brands refer to as a “kamikaze effort,” a product expected to fail. Zyman believed that the presence of Tab Clear on shelves would confuse consumers into believing Crystal Pepsi was a diet drink. (It wasn’t, though there was a Diet Crystal Pepsi version available.) By blurring the lines and confusing consumers who wanted either a calorie-free drink or a full-bodied indulgence, Zyman expected Tab Clear to be a dud and bring Crystal Pepsi down right along with it.

“It was a suicidal mission from day one,” Zyman told author Stephen Denny for his 2011 business book, Killing Giants. “Pepsi spent an enormous amount of money on the [Crystal Pepsi] brand and, regardless, we killed it.”

 
 

With Pepsi set for a massive ad spend on the January 1993 Super Bowl, Coke rolled out Tab Clear in 10 cities, with national expansion coming mid-year. Their ad spending was minimal. Coca-Cola made just enough noise to reposition Crystal Pepsi from a hot, trendy new drink to a product with an identity crisis.

“They were going to basically say it was a mainstream drink,” Zyman said. "'This is like a cola, but it doesn’t have any color. It has all this great taste.' And we said, 'No, Crystal Pepsi is actually a diet drink.' Even though it wasn’t. Because Tab had the attributes of diet, which was its demise. That was its problem. It was perceived to be a medicinal drink. Within three to five months, Tab Clear was dead. And so was Crystal Pepsi.”

The dissolution of soda products on shelves is not inherently dramatic, and there was no visceral evidence on display that Tab Clear was flailing. But by the end of 1993, Zyman’s prediction had come true. Crystal Pepsi had grabbed just 0.5 percent of the market, a quarter of Pepsi's prediction. Both Tab Clear and Crystal Pepsi were phased out and Coke was happy to write the dual obituary. “Now both Tab Clear and Crystal Pepsi are about to die,” Coca-Cola chairman Roberto Goizueta told Ad Week in November 1993.

But it was Pepsi that had spent millions in development and $40 million in marketing; it took the company 18 months to formulate their failure. Coke spent just two months on Tab Clear. It was a barnacle that dragged its far more ambitious rival down with it.

Zyman continued to work for Coca-Cola through 1998. Clear products never caught on as some companies anticipated, though they do experience periodic revivals. Zima returned to shelves in 2017, and Crystal Pepsi has had promotional comebacks.

In one final twist, and despite Ivester's earlier declaration that Clear Coke would never see the light of day, the company’s Japanese arm released a zero-calorie Coca-Cola Clear in the country on June 11. This time, they might even want it to succeed.

Good Fortune: The Story of Miss Cleo's $1 Billion Psychic Empire

The woman sat behind a table, tarot cards in front of her, a turban wrapped tightly around her head. In Jamaican-accented patois, she invited viewers to benefit from her gift of second sight. “Call me now,” Miss Cleo said, and she would reveal all.

Mostly, respondents wanted to know if a lover was cheating on them, though there was no limit to Miss Cleo's divinity. No question was too profound. She could speak with as much wisdom about concerns over financial choices as she could sibling rivalries. Her only challenge was time: Miss Cleo could connect with only a fraction of the people looking for her spiritual guidance, leaving callers in the hands of other (potentially psychically-unqualified) operators.

Still, Miss Cleo became synonymous with psychic phenomena, a way to consult with a medium without getting off your living room couch. From 1997 to 2002, she was a virtually inescapable presence on television—the embodiment of a carnival stereotype that annoyed native Jamaicans, who bristled at her exaggerated accent. It was nonetheless effective: Roughly 6 million calls came in to Miss Cleo over a three-year period, with $1 billion in telephone charges assessed.

Not long after, the companies behind Miss Cleo would be forced to give half of that back amidst charges that they had misled consumers. Despite being a cog in the machine, Miss Cleo herself was vilified. Of the $24 million her hotline raked in monthly, she claimed to have earned just 24 cents a minute, or approximately $15 an hour.

Most people didn’t know she was born in Los Angeles, not in Jamaica; that her real name was Youree Dell Harris; and that her late-night infomercial promising psychic assistance was little more than performance art.

 

Harris may have been raised in California, but Miss Cleo was born in Seattle. While living in Washington in the 1990s, Harris tried her hand at playwrighting, authoring a play titled For Women Only under the name Ree Perris, which she performed at Seattle's Langston Hughes Performing Arts Center. In it, Harris wrote and portrayed a Jamaican woman named Cleo, a clear predecessor to the character that would later pop up in television ads.

After producing three plays, Harris left Seattle amid allegations that she had taken grant money from the Langston Hughes Advisory Council, leaving some of the cast and crew unpaid. (Harris later said she left Seattle due to wanting to distance herself from a bad relationship. She told colleagues she had bone cancer and was leaving the area but that they would be paid at a later date.) She ended up in Florida, where she responded to an ad seeking telephone operators. Harris taped a commercial in character as Cleo—the hotline added the “Miss”—for $1750 and then agreed to monitor a phone line for a set wage. Operators made between 14 and 24 cents a minute, she later said, and she was on the higher end.

Psychic premonitions can be difficult to validate, though Harris never claimed to be a medium. In her own words, she was from a “family of spooky people” and was well-versed in voodoo thanks to study under a Haitian teacher. The Psychic Readers Network and Access Resource Services, a set of sister companies that used workers sourced by a third party for their hotlines, recoiled at the word voodoo and declared her a psychic instead.

If Harris was the genuine article, many of her peers were not. As subcontractors who were not employed by the Psychic Readers Network or Access directly, some responded to ads for “phone actors” and claimed they were given a script from which to work. (Access later denied that operators used a script.) The objective, former "psychics" alleged, was to keep callers on the line for at least 15 minutes. Some customers, who were paying $4.99 a minute for their psychic readings, received phone bills of $300 or more.

When the Federal Trade Commission (FTC) began responding to complaints in 2002, it was not because Harris was portraying a character or because she may have not been demonstrably psychic. It was because the Psychic Readers Network and Access were accused of deceptive advertising. Miss Cleo would urge viewers to call a toll-free 800 number, where operators would then refer them to a paid 900 line to reach a psychic. Miss Cleo also pledged that the first three minutes were free. That was true, though those first three minutes were largely spent on hold.

When people began to dispute their phone charges, Psychic Readers Network and Access were alleged to have referred accounts to collection agencies. Even if a telephone carrier like AT&T canceled the charges, customers would still find themselves subject to harassment over unpaid debt.

Individual states like Missouri and Florida sued or fined the companies, but it was the FTC that created the largest storm cloud. Of the $1 billion earned through the hotline, $500 million remained uncollected from stubborn or delinquent consumers. In a complaint and subsequent settlement, the FTC ordered those debts canceled and imposed a $5 million fine on the companies. Psychic Readers Network and Access did not admit to any wrongdoing.

As for Miss Cleo: Harris was only briefly named in the Florida lawsuit before she was dropped from it; the FTC acknowledged that spokespersons couldn’t be held liable for violations. But the association was enough, and newspaper reporters couldn’t resist the low-hanging fruit. Most headlines were a variation of, “Bet Miss Cleo didn’t see this one coming.”

 

Outed as a faux-Jamaican and with her Seattle past further damaging her reputation, Harris faded from the airwaves. Her fame, however, was persistent. She recorded a voice for a Grand Theft Auto: Vice City game for a character that strongly resembled her onscreen psychic. Private psychic sessions were also in demand, with Harris charging anywhere from $75 to $250 per person. Her Haitian-inspired powers of deduction, she said, were genuine.

Eventually, enough time passed for Miss Cleo to become a source of nostalgia. In 2014, General Mills hired her to endorse French Toast Crunch, a popular cereal from the 1990s that was returning to shelves. Following both the Grand Theft Auto and General Mills deals, Psychic Readers Network cried foul, initiating litigation claiming that the Miss Cleo character was their intellectual property and that Harris's use was a trademark and copyright violation. General Mills immediately pulled the ads. (The argument against Rockstar Games, which produced Grand Theft Auto, was late in coming: Psychic Readers Network brought the case in 2017, 15 years after the game’s original release. The lawsuit is ongoing.)

Unfortunately, Harris’s continued use of the image would shortly become irrelevant. She died in 2016 at age 53 following a bout with cancer. Obituaries identified her as “Miss Cleo” and related her longtime frustration at being associated with the FTC lawsuit. “According to some articles, I’m still in jail,” she told Vice in 2014. Instead, she was where she had always been: Behind a table, listening, and revealing all.

When 'Courage' Caused Controversy for Dan Rather

Kevin Winter, Getty Images
Kevin Winter, Getty Images

In early 1981, Dan Rather was profiled by a number of media outlets as he prepared to take over as news anchor of CBS Evening News that March. The venerable news program had been headlined by Walter Cronkite for the previous 19 years, with Cronkite typically signing off each broadcast by telling viewers, “And that’s the way it is.”

Speaking to journalists, Rather didn’t give any indication if or when he might adopt his own signature closing statement, a tradition in news exemplified by Cronkite, Edward R. Murrow (“Good night and good luck”), and Charles Osgood (“See you on the radio”), among others. But in one October 1981 interview, Rather did mention that one of his favorite words was courage.

“[Ernest] Hemingway thought that courage was grace under pressure,” Rather told The Boston Globe. “When it comes to courage, I have not been put to the test.”

Just five years later, Rather would find himself the focus of a situation that, while not necessarily requiring courageousness, tested his resolve in the face of public ridicule. It started when he concluded a summer newscast with a pithy send-off that was part self-help advice, part personal message, and somewhat confusing.

“And that’s the CBS Evening News for this summer-ending Labor Day,” he said. “Dan Rather reporting from New York.”

Rather paused, then added, “Courage. Good night.”

That an innocuous, two-syllable word like courage could cause such a stir is attributable in part to the landscape of the news media of the 1980s. In addition to newspapers, Americans got their information primarily from the three major networks: CBS, NBC, and ABC. Fox, which launched in 1986, didn’t offer primetime news programming; CNN, which debuted in 1980 and pioneered the 24-hour news cycle, didn’t hit its hard news stride until the 1990s (it was regularly referred to as the Chicken Noodle Network during its first decade on the air). As a result, the networks placed great emphasis on the approach and style of their news programming.

Contrasted against his counterparts—Tom Brokaw at NBC and Peter Jennings at ABC—Rather was considered a stern presence on television. The Rather “stare,” as one television critic put it, defied viewers to question the veracity of each report. Management urged Rather to lighten his tone, first by getting him to wear V-neck sweaters, then by interjecting misplaced quips into his reports. (“Ready, set, Gorbachev!” Rather declared before one segment on the then-Soviet Union leader.)

Still, an emphasis on human interest stories and audience loyalty kept the CBS Evening News on top of the ratings during the first few years of Rather’s tenure. The broadcast finished first among the three news programs for 200 straight weeks.

Then, in the summer of 1986, it fell behind. In the mercurial world of news, there was no one specific reason. Brokaw, whose program took the lead, was well-liked; but Rather bristled at suggestions of adopting a lighter tone and was adamant about returning to harder news.

When he came back from an August vacation in time for the Labor Day broadcast on September 1, 1986, he had decided to take a new approach to concluding the broadcast. “Courage” was added before Rather told viewers to have a good night. To some, it was peculiar. To media observers, it was a sharp departure from the kind of objectivity expected of journalists. Was Rather advising viewers to grow a backbone? Was he dismayed at the state of affairs? Others used it as fodder for comic takes in editorials.

Attempts to parse his use of the word went unaided by Rather himself, who cautioned people not to read into it. “Don’t overanalyze it,” he said. “There’s no deep, hidden meaning.” It was just a salutation he had used with friends for years and one that also happened to be one of his father’s favorite words. Rather used it to sign off on some of his radio broadcasts in the 1970s.

“If feels right to me and I think the audience will be comfortable with it,” he said.

CBS executives tried to talk him out of it. “I’m the only one who likes it,” Rather said of the internal response. Howard Stringer, a CBS Evening News producer who had just been named president of the CBS news division, said it was Rather’s “right” to close the broadcast however he liked, but stopped short of endorsing the habit.

Rather did it on Tuesday of that week, and again on Wednesday, but with a twist: Following a Bill Moyers report on the Texas-Mexico border, Rather said coraje, the Spanish word for courage. When that was met with derision, he labeled it an “ill-advised lark.”

Ultimately, Rather's sign off experiment was short-lived. It ended that Friday, with the anchor again wishing “courage” on his viewers. The following Monday, it was back to business as usual, with reports claiming that executives were finally able to convince the broadcaster to abandon his closing statement. September ended with the CBS Evening News again trailing the NBC Nightly News by one-half a ratings point.

Rather had the last word—of sorts—when he ended his tenure as the CBS Evening News anchor in March 2005. For his final broadcast, he looked into the camera and made one final statement. “And to each of you, courage,” he said.

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