The History Of The Price Of Coke

Why was Coke only a nickel for 70 years while the price of other products increased with inflation and according to supply and demand? From Slate:

Coke itself was taxed first as a medicine, then as a soft drink, and survived sugar rationing. All the while, the price stayed at a nickel.

Part of Coke’s problem was the cost of replacing vending machines that accepted only nickels–and the fact that the alternative, dimes, represented a 100 percent price hike. (The boss of Coca-Cola wrote to his friend President Eisenhower in 1953 to suggest, in all seriousness, a 7-and-a-half-cent coin.)

Sadly, this very interesting article doesn’t solve the real mystery: Why Coke’s price triples depending on its proximity to roller coasters and rock bands. —MEGHANN MARCO

The Mystery of the 5-Cent Coca-Cola [Slate]
(Photo: damageinc86)

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  1. Sandtiger says:

    Having just spent five days at Disney I can definately agree. A coke was over $3 on the park (20oz variety no less!)

  2. quantum-shaman says:

    It’s called “market forces”. As long as there are people willing to pay $3 for a Coke, there will be people more than willing to sell it to you.

  3. Pelagius says:

    Just taking a stab here, but the vending machine owner pays the venue owner for the right to distribute his machines in (hopefully) profitable areas. The cost of that privilege varies, hence the mark-up.

  4. RandomHookup says:

    Or why you can buy a 2-liter bottle on sale for a buck, but the 20 ounce bottle in the same store always costs $1.25 or more (and is never on sale).

  5. dohtem says:

    @quantum-shaman: You missed it. It is not that people are willing to pay that much. It is the only option we are given. At fairs and concerts, they usually don’t allow outside food. So you can eat (and drink) before hand, or come in and starve and wait it out or pay the ridiculous prices.

    Same reason Disney in Orlando is out in the middle of nowhere. Once you are in, they got you. You can hit the freeway (if you rented a car before hand) for 30 minutes to find reasonably priced food. Or buy from Disney.

    The fairs are awesome but I hate the feeling that I am being ripped off so I stopped going. I remember paying $3 or so for a coke from a fountain, the cup was filled with a lot of small ice cubes. Two sips and I was done. :(

  6. mantari says:

    Or why even Wal-Mart with its ‘everyday low prices’ [READ: NO SPECIAL SALE PRICES THAT GO AWAY] can’t prevent the price of a 2 liter of Coke from fluctuating between $.79 and $1.29, for no apparent reason.

  7. quantum-shaman says:

    @dohtem: Nah, I don’t think I missed it at all: “I hate the feeling that I am being ripped off so I stopped going.”

    It’s NOT the only option. There are two others. One you already mentioned. Two is that all of these facilities have water fountains. You can eat beforehand, and after you leave. Otherwise you pay for the privilege of having $5 hotdogs and $3 cokes while you ride the tilt-a-whirl with your kid. Them’s market forces!

  8. synergy says:

    @quantum-shaman: Not that I’ve ever been, but I’d do like I used to do to go to the movies (when I used to go, before Netflix). Just carry a large bag and put your own food in it. They don’t frisk you or demand to look in your bags do they?

    Of course this requires having at least one female with you. Have you seen the insanely large bags full of crap some women tote??

  9. quantum-shaman says:

    @synergy: Yep I would carry one too, should I find myself so unfortunate as to have to darken the door of Disneyland or a similar modern “entertainment” atrocity. Not being a particularly big fan of popcorn and coke, I will take a bag of beef jerky and a little flask of vodka to the theater. I do LOVE the County Fairs, though. I go precisely to look at the 4-H exhibits and load up on cotton candy, greasy Italian sausage, candy apples and stuff that I would otherwise never eat.

  10. slipgrid says:

    Just a guess, but it’s sugar water. It has very little value. People used to charge a sane price for the product they were selling.

    Today, it’s not worth much more than five cents, but companies are a bit more, I don’t know, evil. No longer is it a matter of charging what the product is worth to make what you need to survive and to have the company thrive. Now it’s this crazy idea that loyalty to shareholders, and some say following the law, means that you must go to every extent to make a profit, at the expense of the product and customers. So now we have corn sugar in the Coke, it comes in nasty plastic bottles, and it cost about a buck fifty. Hope the share holders are happy, because I doubt that anyone else is.

    For examples of a company that thrives, makes a large profit, and doesn’t degrade their product in the process, look at Craigslist.org, which doesn’t run ads. It is believe they could make billions in a year by adding ads to their site. They won’t do it, they are still extremely successful, and that scares the shit outta wall street.

  11. Starfury says:

    @synergy: When we go to the movies (not often) my wife always has the huge purse full of food. We’ve even stopped at McFood and brought that in. It’s already costing $30 for the 4 of us to get in.

  12. mac-phisto says:

    here’s the trick i use at amusement parks: camelbak. depending on your individual needs, one can discretely fit anywhere from 3 – 10 rum & coke beverages w/o being hounded by the mouse police.

  13. JDAC says:

    @mac-phisto:

    I had to look that one up, what a great idea! Just when you think everything that can be invented…

  14. gorckat says:

    @JDAC: I had to look it up, too.

    But the website was so crippled by its dependency on Flash or w/e, that I didn’t bother to stick around and see how much it cost and where I could get it.

    A few nice pictures would have worked fine.

  15. 75Sasha says:

    Just a thought on the price difference where the 2 liter is more than a 20oz. You’re paying for the convenience factor. It would be awkward to carry around a 2 liter and I doubt you’d be able to finish it in a reasonable amount of time.

  16. AcidReign says:

    …..Pepsi: twice as much for a nickel! The company was built and grew on that…

    …..I’m in bottling. The empty bottle costs more than a nickel these days. The worth of an item IS what people will pay for it. And we can’t make enough 20 oz drinks! Especially Mt. Dew…

  17. asherchang says:

    “Why Coke’s price triples depending on its proximity to roller coasters and rock bands”

    Ew, please. Use a more correct wording, such as “How proximity to roller coasters and rock bands can raise the price of Coke to up to triple the usual amount”.

    “depending on” requires some uncertain value or quality, but “triples” is an unambiguous action, and there is no verb in english for “increase to up to 3 times as much”.

  18. NeonCat says:

    To those of you who carry food into movie theaters, with the justification that you’ve already paid so much to get in, why not?, the thing is, the theater gets very little of your ticket purchase. For a first run movie nearly all of it goes to the studio and distributor. The way the theater makes money (which allows it to stay in business) is at the concession stand. I am not saying it is every patron’s duty to buy some Junior Mints, I am just explaining where the theater gets its money.

  19. mac-phisto says:

    @NeonCat: i don’t care. my choices are: $5.50 for a LARGE (FREE REFILL) 40 oz. coke or $5.00 for a 12 oz. coke. you can go to hell, [b]loew’s. besides, they don’t sell pbr at the concession stand so i have to bring it in.

  20. mac-phisto says:

    @JDAC, gorckat: yeah, the camelbak site is a flash nightmare. lots of retailers – esp. adventure outfitters – sell camelbak. check out http://www.travelcountry.com – i only mention them b/c i had an awesome buying experience w/ them once.

  21. swalve says:

    A) Start your own cola company and charge less. It worked for Pepsi and Royal Crown.

    B) How much was a nickel worth back then? It’s probably cheaper now, as far as time spent earning it goes.

  22. strathmeyer says:

    Sorry, swalve, historically Coca-Cola is large enough to underprice you.

  23. TechnoDestructo says:

    @quantum-shaman:

    Not only that, but those few people who are willing to pay 3 bucks are worth a HORDE of people willing to pay 1 dollar.

    Say it costs 50 cents to make that coke, bottle that coke, put that coke in the machine, and maintain the machine.

    They’re making 50 cents on the 1 dollar customer, and $2.50 on the 3 dollar sucker. They’d have to lose over 80 percent of potential customers to make it not worth it to jack the price up.

    I love free markets. I hate any imposition on competition. (“If you want this you can’t have that” is an imposition. The only freedom in this market is to bend over or not participate.)

  24. Landcrusher says:

    Oh Lord, there are people here that think they need coca cola?

    The first and last test for anyone who thinks something is too expensive is –

    Why not get into that business yourself?

    Nothing in the cola business is rocket science. You can make the stuff at home. So you can stop whining about it and get rich like the guy gouging you! Go for it! One warning – as soon as you are rich, you will find that corporate jets are REALLY expensive.

    Enjoy.