Why did Pepsi fail?

One of the biggest reasons for the soda's failure was the taste. While Pepsi had trained
its consumers to associate brown with cola, it's not entirely out of the world to think that
the right kind of marketing could have changed consumers' minds to think clear Pepsi is
pretty awesome.

The Clear and Caffeine-Free Brilliant Idea

The idea first struck Novak like a can of soda falling from the sky. The year
was 1992 and the sale of classic colas like Pepsi and Coke were stagnant. By
contrast, lighter soft drinks such as Slice and Clearly Canadian were on the
rise. “Everything that was growing in sales was either clear or caffeine-free,”
Novak recalls. “I was sitting in my office, and it hit me: Why not make a Pepsi
Cola that’s both?”

Novak called PepsiCo CEO Roger Enrico with the pitch. “I knew I was playing
with the family jewels because the company is Pepsi Cola,” he said. But he
made a solid case -- that occasional soda drinkers want a lighter tasting,
healthier-seeming alternative. And his bosses went for it.

Cracking the Code

To create the see-through spinoff, Novak teamed up with food scientist
Surinder Kumar, the junk food wizard behind the flavor of Nacho Cheese
Doritos. Novak explained the idea and stressed the importance of clear
bottles to show off the drink’s hip new look, according to Kumar.

Kumar, who was then head of Pepsi’s Research and Development branch,
balked at first. He foresaw a huge problem. “I knew it had a strong possibility
of going bad in clear bottles,” he said. “Colas are brown for a good reason.”  

The color keeps sunlight from spoiling the drink, and morphing it into a brew
that  “smells and tastes like shoe polish,” he says. Ever wonder why 7-Up and
Sprite are sold in green bottles? It’s the exact same concept, he stressed to
Pepsi executives.
“But Pepsi’s motto at the time was ‘Go Big.’ And so I was told, ‘You’re a food
scientist -- figure it out,’” Kumar says. “From a technical standpoint, I thought
it was impossible. There are laws of physics and chemistry you can’t change.”

But he set out to try.  The goal was to make a caffeine-and-preservative-free

clear soda that tastes like original Pepsi but wouldn’t eat into its sales. Over
the next few months, he concocted a recipe that included a mix of sugars and
salts -- along with a secret substitute for the caramel-brown color and flavor,
which he’s still not at liberty to disclose.

Problem was, honchos wouldn’t tell him the full recipe of regular Pepsi, he
says. Only a few execs at the firm knew the coveted trade secret, which made
it harder to replicate. To Kumar, it felt like guarding a castle in a blindfold.  

“Imagine trying to protect the flavor of something without actually knowing

what’s in it,” he says. “It was difficult and very frustrating.” (Pepsi didn’t
return requests for comment.)

Kumar also wasn’t hot on the idea of marketing Crystal Pepsi as healthy. It
was made with high fructose corn syrup and had roughly the same amount of
calories. “It was misleading to consumers. My point of view was if we want to
market it as ‘pure’ and ‘natural’ then the ingredients need to reflect that,” he
says.

Focus groups didn’t seem to mind. “They loved it,” according to Novak. “So I
rushed it into the test market.”

Rush for Super Bowl Glory

In April 1992, the drink launched in Boulder, Colorado, and was soon flying
off the shelves. “It was the hottest news in the category,” Novak recalls.
“People were calling their friends and shipping them six-packs. Everybody
wanted to try it.”
But in Novak’s mind, the clock was ticking. He wanted the soft drink to
launch nationally in time for the Super Bowl on Jan. 31, 1993, as part of a $40
million ad campaign.

All told, Crystal Pepsi was rolled out across America at breakneck speed --
just nine months after Novak’s first pitch. By contrast, “It took us three years
to launch Slice,” Kumar says. “It wasn’t enough time to accurately test its
shelf-life.”

"Everybody will try this...but nobody is going to

retry it"
Bottlers gave Novak the first hint that something wasn’t right. “They said,
‘You have a really good idea, but the problem is that it doesn’t have enough
Pepsi Cola flavor in it,’” Novak says. “One of them told me, ‘Everybody will try
this. The problem is nobody is going to retry it.”

He added, “They had a unique perspective that I basically ignored... And they
were right.”

After the Super Bowl commercial, sales of $1.50 six-packs soared. The
company sold $474 million of Crystal Pepsi by March 1993, according to The
New York Times.
Crystal Pepsi’s immediate success sent competitors at Coke into attack mode.
The company launched Tab Clear in what chief marketing officer Sergio
Zyma described as a mutual destruction effort to fail -- and take Crystal Pepsi
down with it. He hoped to kill it off by confusing shoppers into thinking it
was a diet drink.

“Pepsi spent an enormous amount of money on the brand and, regardless, we

killed it. Both of them were dead within six months,” Zyma said in the
book, Killing Giants: 10 Strategies to Topple the Goliath in Your Industry.
Whether or not the scheme actually worked, not many people tried Crystal
Pepsi twice. Novak thinks the flavor simply wasn’t good enough. “Because we
rushed it, we were having product quality problems. It had more of an
aftertaste than it should have had,” he said.

The Crystal Gravy Kiss of Death

SNL even spoofed the soft drink with a commercial parody for “Crystal
Gravy.” In it, actress Julia Sweeny dunks a piece of chicken into a lube-like
clear meat sauce as Kevin Nealan splashes it on his face, absurdly. (Asked
about the sketch, Sweeny told Thrillist, “I have no memory of it but I laughed
really hard seeing it. It's really gross!”)

Pepsi honchos weren’t laughing. “We didn’t like [the sketch] because they
were basically saying it didn’t taste good,” Novak says.

More serious dilemmas soon began to bubble up. “Cases of Crystal Pepsi
were being displayed sitting out in the direct sunlight at gas stations,” Kumar
says. “That was the kiss of death.”