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A successful, prolific inventor reveals how not to create a new product

Wednesday, Apr 11 2001

Page 3 of 4

But Pepsi Max has never been available in America, and likely never will be. This hard lesson was learned during the cola wars of the '80s and '90s. In the mid-'80s, Coke and Pepsi deliberately went head-to-head against each other with a flurry of advertising. Pepsi introduced its "Pepsi Challenge," the vaunted "blind taste test" in which, lo and behold, people liked Pepsi more than Coke. Coke countered with ads featuring Max Headroom, a sputtering, computer-generated Goebbels who commanded the masses not to say "the P-word."

But the cola wars ran deeper than high-profile prime-time TV ads. Looking for increased market share in a multibillion-dollar soft drink industry, Pepsi investigated new avenues in American soft drinks. There are a lot of them -- lemon-flavored drinks, lemon-lime-flavored drinks, root beers, cherry colas, iced teas, and so on -- but one that Pepsi could never quite let go of was the midcalorie cola. It seems like such an obvious winner -- same taste as a regular cola, fewer calories. But it's never worked.

"Midcalorie products have had a hard time," says Sarah Theodore, who reports on the soft drink market for Beverage Industry magazine. "I don't think consumers know what to do with a midcalorie cola. People who drink full-calorie colas don't go down to a lower-calorie drink, and people who drink diets don't understand the midcalorie concept."

There's ample proof of this. In the early '80s, Pepsi briefly sold Pepsi Light, a 70-calorie, lemon-flavored drink that struggled to find a market. In 1987 -- the height of the cola wars -- Pepsi began test-marketing Jake's, a 15-calorie cola, in the U.S. Coke killed it almost instantly with an advertising campaign saying that you could enjoy 15 cans of Diet Coke and still consume fewer calories than one can of Jake's. Pepsi's last stand was Pepsi XL, a 70-calorie sugar-and-aspartame blend that was test-marketed in Florida in the spring of 1995. By the summer, it was clear that consumers weren't biting. By the end of the year, Pepsi pulled the plug. Thou shalt not bullshit thyself.

"It didn't seem to be a proposition that resonated with the U.S. consumer," says PepsiCo spokesperson Larry Jabbonsky. "Americans either gravitate toward a diet or a full-calorie cola." So we'll never see a midcalorie in America again? "We never rule anything out," says Jabbonsky. "But I think we're pretty happy with our cola portfolio the way it is."

To put it another way: 80/20 Cola was pretty much doomed from the start.

"You learn more from a failure than a success -- you learn to say, "Don't do this again,'" says Maurice Kanbar with a laugh.

But he adds more soberly: "Let me say this. It doesn't affect my lifestyle to have some failures. It's a very important part of your education. As a matter of fact, to all young inventors I'd say, "Don't be discouraged.' The worst thing you could be is discouraged. Certainly not everything I've done has been a big success, but more of them have been than the failures, so I have been lucky."

Kanbar talks about his failures with remarkable candor. After all, he can afford to. In its first year of production, the D-Fuzz-It sweater comb made $200,000, and Kanbar has parlayed that success into the Quad Cinema; Rex Games, which makes Tangoes and other diversions; and, after moving to San Francisco 15 years ago, Skyy Vodka, which has more than doubled its sales in the past five years and, according to Skyy employees, is poised to become the No. 2 premium-vodka brand in the U.S. this year. It's done so well that in 1997 Kanbar gave $5 million to NYU's highly respected film department, which is now named the Maurice Kanbar Institute of Film and Television.

But mistakes and failure are themes in Kanbar's book, Secrets From an Inventor's Notebook, recently published by Council Oak Books, an imprint he purchased in 1997. In the book, he cites the example of the ROLLOcane -- a three-wheeled cane that makes walking smoother. Kanbar hasn't given up on it entirely -- he and Albert Kolvites are tinkering with different wheel sizes -- but Kanbar learned that sometimes you can't know everything until you put something in the marketplace. With the ROLLOcane, the problem was a matter of perception. Kanbar and Kolvites knew it was sturdy, but an outsider looking at the thing could easily picture it rolling away from its user. It looks unstable, so not enough people want it.

By contrast, making 80/20 Cola -- which isn't mentioned in Inventor's Notebook -- was a relatively simple matter. Despite the legends about the armed vault at Coca-Cola headquarters containing Coke's ultra-ultra-secret formula, getting a cola made is simply a matter of hiring out a "flavor house" to make the proper sweetener mixture with the appropriate taste. "This formula that [Coca-Cola] locks in a safe is meaningless," Kanbar says. "It's nonsense."

But if cracking the code of Coke's taste was easy, competing with Coke and Pepsi in the marketplace proved difficult. In the long run, 80/20 Cola likely would have died due to lack of interest; but the reason it lasted less than six months is the reason most cola brands can't compete with Coke and Pepsi: profit margins.

Houston seemed like the best place to ship the first few thousand cases in the late spring of 2000. Skyy's representatives in Texas were eager to give it a shot; as Weiner explains, "People drink a lot of cola down there." There was no fanfare, no "80/20 Cola Day" -- just a bottler and distributor hired out to handle the cola. There was little advertising, and the only interview Kanbar did was with the trade magazine Beverage Industry; Skyy launched its Skyy Citrus vodka at the same time, and he told the magazine that his favorite drinks were a Skyy Citrus martini and "80/20 Cola served ice cold." And 80/20 would be selling for less than Diet Coke, so consumers could appreciate the value.

About The Author

Mark Athitakis


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