Acquired Podcast — Coca-Cola
November 24, 2025
Hosts: Ben Gilbert (A) and David Rosenthal (B)

EPISODE OVERVIEW

This episode of Acquired takes listeners on an epic deep dive into the history of The Coca-Cola Company, tracing its transformation from a post–Civil War patent medicine to a $300 billion global beverage juggernaut. The hosts explore Coca-Cola’s strategic playbook, its pivotal role in American and global culture, and the branding, business model, and distribution innovations that built “the real thing.” Along the way, they uncover memorable stories, catastrophic missteps like New Coke, and Coca-Cola’s ongoing evolution in a fiercely competitive industry.

MAIN THEMES

• The origins and evolution of Coca-Cola, from patent medicine to global beverage titan
• How Coke’s business model and bottler system enabled massive scale
• The power of branding, advertising (from Santa Claus to Olympic sponsorships), and legal warfare
• Rivalry with Pepsi and the impact of the “Pepsi Challenge”
• The New Coke debacle, customer attachment, and corporate humility
• Globalization, diversification, and the future of Coca-Cola in a changing market

KEY SECTIONS & DISCUSSION HIGHLIGHTS

1. Setting the Stage: “Syrup, Sugar, Water — and $300 Billion”

Timestamp: 00:00–06:08

• Ben introduces Coca-Cola as seemingly "just" sugar water, but an empire worth $300B.
• Charlie Munger’s thought experiment: starting an iconic drink company in the 1880s.
• Foundational playbook: global brand, universal appeal, low price, happiness associations, minimal CAPEX via the bottler system, and absolute formula fidelity.

“You are going to want to have a Pavlovian association between your drink and happiness.” (A, 03:23)

2. Patent Medicines & American Consumerism

06:08–14:59

• Post–Civil War: the boom in “patent medicines” as the seed of national consumer brands and advertising.
• Coca-Cola’s actual beginnings as a cocaine & caffeine–laced “miracle tonic” by Dr. John Pemberton in Atlanta.
• Early industry key: create and protect a proprietary brand, even as the product itself is a commodity.

“What were patent medicines? …Nausea, indigestion, headaches, cancer, tuberculosis, skull fractures, paralysis, and impotence...” (A, 08:05)

3. From Wine Coca to Soda Fountain Staple

15:04–30:01

• Prohibition in Atlanta creates the need for a non-alcoholic (“soft”) version.
• Pemberton invents Coca-Cola syrup, optimized for flavor and refreshment — and Coke’s famous caffeine kick (originally 4x today's levels).
• Distribution via drugstore soda fountains; serving social as well as “medicinal” purposes.
• Partner Frank Robinson names and scripts the now-iconic Coca-Cola logo (1887).

“The first version of Coca Cola is a little tiny bit of the cola seed, just kind of to say that it's in there. But the caffeine actually comes from a synthetic extract.” (A, 19:43)

4. Building the System: Bottlers, Coupons & Blitzscaling

30:01–53:11

• Frank Robinson invents the first ever manufacturer’s coupon (~1888); Coca-Cola’s early viral growth.
• 1899: The fateful "worst and best" business deal — Asa Candler grants exclusive bottling rights for $1 per gallon, locking in the distribution system that would enable massive (and capital-light) scale.
• Bottler franchise model explained; the “Coca-Cola System” as a network of networks.

“This creates a second wave of blitzscaling, if you will, for the Coca-Cola Company…” (B, 50:01)

5. The Brand Fortress: Trademarks, The Contour Bottle, and Legal War

53:11–68:26

• Coke sues thousands of copycats after the Federal Trademark Act (1905); landmark Supreme Court win.
• The iconic contour/“Mae West” bottle (1916) — to thwart imitators and reinforce the brand visually and tactilely.

“We want to develop a bottle so distinct that you would recognize it by feel in the dark or lying broken on the ground.” (A, 65:43)

6. Advertising Genius: From Brain Tonic to Happiness (and Santa Claus!)

77:08–88:59

• Invention of lifestyle/extrinsic advertising in the 1920s: “The Pause That Refreshes,” “Delicious and Refreshing,” “Always Delightful.”
• Norman Rockwell, Haddon Sunbloom and the creation of modern "Coca-Cola Santa" — cementing the brand as American and global wholesomeness.

“Coca Cola isn’t a carbonated, sweetened soft drink... Coca Cola is happiness. Coca Cola is friendship… Coca Cola is Christmas.” (B, 78:54)

“This is really important – he’s hitting on like, hey, Coca Cola is for everyone…” (B, 41:59)

7. War, Syndicates & Global Expansion

88:59–116:06

• WWI–WWII: Bottler expansion and the first international moves; “greatest sampling program in the history of the world.” (Over 5–10B bottles during WWII.)
• Coke as an American ambassador product; postwar dominance and iconic TIME magazine cover (“world and friend”).
• Fanta’s Nazi Germany origins; postwar pivot and global bottling system.

“The military and the US Government realize, hey, Coke may actually be one of America's best weapons in this war…” (B, 109:30)

8. Pepsi Emerges: Competition, Bottles & The Pepsi Challenge

116:06–159:17

• Coke is forced to drop “cola” as proprietary; Pepsi surges during the Depression with double-size 12oz bottles for a nickel.
• Pepsi’s strategic marketing: advertising to Black America, lighter/diet positioning, and pioneering TV targeting youth.
• The “Pepsi Challenge” (1970s) – grassroots taste tests revealing a consumer preference for Pepsi’s sweeter, lighter formula.
• Coke’s slow, beleaguered response; losing market share for years.

“This is textbook counter positioning. Coca Cola cannot respond because they and their bottlers have just invested all of this capital and all of this IP into the six and a half ounce contour bottle. They can't react.” (B, 101:53)

9. New Coke: The Catastrophe that Saved the Brand

163:53–188:48

• 1985: Coke replaces its 99-year-old formula with “New Coke” to directly counter Pepsi, after extensive taste tests (but not asking consumers about attachment).
• Massive consumer backlash — “you have betrayed me,” umbrella assaults, etc. Emotional bond with the brand trumps flavor.
• In 79 days, Coca-Cola "Classic" is brought back.
• Ironically, this PR disaster reinvigorates brand love and cements consumer loyalty, reversing years of Pepsi gains.

“Last week, I tasted betrayal on your lips. You had the smooth, seductive, sweet taste of a lie…” [Letter] (B, 184:42)

10. Berkshire, Bottlers, & The Modern Coca-Cola

189:30–208:41

• Warren Buffett invests heavily post–New Coke (“could be run by a ham sandwich”), eventually owning ~9.5% of the company.
• Globalization outpaces US sales; bottling system remains crucial.
• Acquisitions/misses: Vitamin Water, Topo Chico, but they fumble Frito-Lay, Gatorade, Monster.
• Coca-Cola’s business today: 30+ billion-dollar brands, 69% of revenue from sparkling drinks, >2 billion servings/day, but growth is slow (3–4% per year).

MEMORABLE QUOTES & MOMENTS (with Timestamps)

• “Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?” — Steve Jobs to John Sculley (B, 00:13 & 160:30)
• “We are not building Coca Cola alone for today. We are building Coca Cola forever…” (B, 65:36)
• “Some critics will say that Coca Cola made a marketing mistake. Some cynic will say that we planned the whole thing. The truth is, we are not that dumb and we are not that smart.” — Don Keough, after New Coke reversal (B, 186:32)
• “My dearest Coke, you have betrayed me. We went out just last week as we had so often. And when we kissed, I knew our love affair was over…” — Customer letter post–New Coke (B, 184:40)
• “If anyone were to ask us what we are fighting for, we think half of us would answer the right to buy Coca Cola.” — U.S. GI, WWII (B, 113:07)
• “It is figuring out how to incentivize partners to sell your product. And everyone is incentivized…” (A, 232:48)

KEY BUSINESS INSIGHTS (“THE PLAYBOOK”)

• Branding & Association — Relentless emotional and lifestyle advertising (e.g. Santa Claus, “The Pause That Refreshes,” “the real thing”) transformed a commodity into a global icon.
• Scale Economies & Bottler System — The asset-light, franchised bottler model enabled fast, low-cost scaling.
• Category Creation & Legal Warfare — Aggressive lawsuits built a moat around "Coca-Cola" as not just a flavor but a brand.
• Distribution Innovation — Coupons, national signage, and rapid expansion into gas stations, coolers, and vending machines.
• Counterpositioning & Competition — Pepsi’s strategic moves forced Coke to respond, leading to both blunders (New Coke) and triumphs (Diet Coke, Coke’s global expansion).

ANALYSIS & “POWERS” (Seven Powers by Hamilton Helmer)

• Scale Economies: Coke’s mammoth scale allows for unparalleled advertising ROI, low marginal costs, and supply chain leverage (224:34).
• Branding: Instantly recognized wordmark, bottle shape, and lifestyle imagery. Not used for price premiums, but for ubiquity and repeat action (226:38).
• Cornered Resource: Perhaps more the bottler network than the “secret formula” (228:10).
• Process Power: Strict quality control, formula secrecy, marketing standards.
• Counter-Positioning: Typically Pepsi’s weapon, not Coke’s.
• Switching Cost/Network Effects: Generally low, but emotional attachment is exceptionally high.
• Legal/Regulatory Moat: Trademark protection, and even Congressional exemptions for exclusive bottling territories (235:31).

THE QUINTESSENCE

• “It’s a system, not a company... The Coca-Cola Company just needs to sell syrup and spend marketing dollars to sell the dream. It’s a beautiful position to be in.” (A, 214:40 & 232:47)
• “Everyone who has anything to do with Coca Cola should make money.” — Robert Woodruff’s maxim (B, 234:08)
• “Repetition works. ...Always delicious, always refreshing. ...It’s the same core thing.” (B, 234:09)

TRIVIA & ODDBALL FACTS

• New Coke lasted just 79 days before the return of “Classic.” (A, 185:29)
• Fanta’s origins: created by German Coke bottlers cut off during WWII (A, 115:50).
• Monsanto’s first customer? Coca Cola, buying saccharin. (B, 237:51)
• Coca Cola’s secret formula: trade secret, not patented; two people always know it.
• The Coca-Cola Company helped define the modern image of Santa Claus.
• The company once owned the land that became Atlanta Airport and the Atlanta Zoo.
• Federal antitrust exemptions allow Coke and Pepsi to grant monopolistic bottler territories in the U.S. (A, 235:31)

CLOSING REMARKS

Though Coke today faces slow growth, health headwinds, and ever-changing tastes, the strategies and systems it pioneered—brand, distribution, emotional resonance, and bolt-on mass marketing—have made it an enduring symbol of American business ingenuity.

As Ben sums it up:
“It’s a sugar water company… And they built one of the most incredible brands of all time.” (A, 235:01)

FURTHER LISTENING / CREDITS

• For more on related topics, listen to Acquired episodes on Berkshire Hathaway, Standard Oil, Rolex, or Trader Joe’s.
• Gratitude extended to John Sculley (Pepsi Challenge), Arvind Navaratnam (Charlie Munger’s thought experiment), Coca-Cola historians, analysts, and collectors.
• Core sources include Mark Pendergrast’s For God, Country, and Coca-Cola and the book Secret Formula.

Note: Timestamps refer to MM:SS in the episode for those wishing to listen to specific moments. Ads, intros, and outros have been omitted in this summary.