
Why Coke Cost a Nickel for 70 Years (2012) - x43b
http://www.npr.org/sections/money/2012/11/15/165143816/why-coke-cost-a-nickel-for-70-years
======
meric
That's a nice story.

The real reason was the US dollar was on a gold standard during that period of
time. In the late 50's to 60's the US begin to issue more currency than their
gold holdings were increasing, leading the countries like France withdrawing
gold from the US (and apparently, inflation, according to this article), and
finally the dissolution of the gold standard in 1971.

Since the US dollar was fixed to gold there was little to no inflation,
because the ratio of gold price to goods price is much more stable.

In 1950 - A coke was 5c, median household income $4000[1] per year = 80000
cokes per year.

In 2015 - A coke is $2[2], median household income $50500[3] per year = 25000
cokes per year.

In real terms adjusted by the price of coke, the median household income has
fallen by 69%. (for giggles).

1\.
[http://web.stanford.edu/class/polisci120a/immigration/Median...](http://web.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf)

2\. [http://www.humuch.com/prices/CocaCola-
Bottle-20oz500ml/_____...](http://www.humuch.com/prices/CocaCola-
Bottle-20oz500ml/______/40#.VZDGuO2qqko)

3\. [http://www.mybudget360.com/how-much-do-americans-earn-
what-i...](http://www.mybudget360.com/how-much-do-americans-earn-what-is-the-
average-us-income/)

~~~
ams6110
You're not accounting for the size of the portion. The nickel bottle of Coca-
Cola was 6oz. Today's standard vending machine bottle is 20oz.

~~~
dunham
Which gives us 480,000 ounces of coke in 1950 vs 505,000 ounces of coke in
2015. A 5.2% increase in the amount of coke you can buy for a year's salary.
(I'm actually kinda surprised the price is that stable.)

~~~
vetinari
It's easier to sell one bigger package than several smaller.

I would not be surprised, if the 505,000 ounces in 20oz packages cost less to
produce in 1950 prices, than 480,000 ounces in 6oz packages. (Just one
physical package, not three separate).

~~~
ams6110
It's a set of tradeoffs. The 6oz bottles were (I think) returnable. Even
better than recycling, they only needed to be washed/sterilized to re-use. I'm
old enough to remember Coke and other brands in returnable bottles up to 16oz.

They were heavy. The transportation costs savings with the lighter plastic
bottles (combined with maybe the raw materials savings, and savings not having
to transport, handle, wash, and sterilize the emptys) made plastic more
economical than returnable glass.

Manufacturing cost for glass bottles almost certainly higher than plastic. You
have to melt either sand or recycled crushed glass which takes a lot of
energy.

Some jurisdictions do have returnable plastic bottles. They are much heavier
than the disposable ones but still lighter than glass.

Interestingly for some reason beer in plastic bottles has never caught on,
it's mostly sold in glass bottles and cans.

~~~
cpwright
At Islanders hockey games, beer is sold in plastic bottles with the cap taken
off.

~~~
tbomb
This has been a growing trend in many arenas and stadiums in Florida too. I've
seen them in at least 5 different venues across the state now.

------
paulpauper
When people bemoan how things were cheaper back in an earlier time, they are
often forgetting to take into account:

CPI Inflation (when adjusted for inflation, these 'cheap' things are often as
expensive as they are today) this is seen with the movie ticket example
[http://greyenlightenment.com/debunking-the-gold-
standard/](http://greyenlightenment.com/debunking-the-gold-standard/) Maybe
some things are a little more expensive, but it pretty much all evens-out.

Improved Utility (you get a better product despite the higher nominal price)

New products (your dollar buys things that didn't even exist even as early as
generation ago)

Expenditures such as food & energy constitutes a smaller percentage of income
than generations ago.

~~~
crdoconnor
I'd swap my smartphone for affordable education, housing and healthcare any
day.

~~~
peterfirefly
Would you? Can't you get better education (though without the diploma) out of
your smartphone than you could out of almost all universities in the sixties?
Isn't wikipedia more correct than most textbooks from that day? Isn't pubmed
better? Isn't it easy to find lots of scanned textbooks from helpful servers
in Iran, Turkey, China, etc.? Much easier than finding good textbooks in a
university library back in the day?

~~~
crdoconnor
>Can't you get better education (though without the diploma) out of your
smartphone than you could out of almost all universities in the sixties?

So you're saying that you'd rather _no_ degree and a few notches on your
coursera belt than a degree from a prestigious university from the 1960s?

Are you nuts?

------
ams6110
Even Pepsi had a jingle based on the nickel price for a 6oz bottle of Coca-
Cola:

 _Pepsi-Cola hits the spot, 12 full ounces, that’s a lot, Twice as much for a
nickel too, Pepsi-Cola is the Drink for you!_

------
Strikingwolf
Awesome story. I wonder if the same kind of things have happened for other
brands. Coke was also pretty clever advertising 5 cents a bottle to lock the
price, brilliant plan to neutralize a bad move in the past.

------
grecy
> _At one point, the head of Coca-Cola asked President Eisenhower for help.
> (They were hunting buddies.)_

That line tells you everything you need to know about how big business gets
what it wants from government.

------
bbcbasic
I wonder... what would have happened if they fixed the price at 1c, forcing
the bottlers out of business, then renegotiated the contract i.e. void the
contract and we'll stop advertising it as 1c. The fountain stuff could have
kept Coke in business then it is a war of attrition?

~~~
Gustomaximus
Coke couldn't fix the puce, Coke advertised it. People were free to sell it as
they pleased. I imagine if Coke advertised the product at 1c stores would
disregard the advertising and it would be a pointless waste of money from Coke
in that they would lose all control as no-one would now expect to pay the
advertised price.

~~~
interpol_p
They are kind of fixing the price now. I see small cans of coke (250 ml) with
a large logo stating: "Maximum price $2." [1]

I'm guessing you could legally sell these cans for whatever you want, but
consumers would probably not like to pay more for something that has its
"maximum" price stated in the design of the can.

[1] [http://ausfoodnews.com.au/2014/08/11/coca-cola-launches-
smal...](http://ausfoodnews.com.au/2014/08/11/coca-cola-launches-small-250ml-
can-range.html)

~~~
bjterry
Arizona Iced Tea (used to?) have a prominent $0.99 price on the label and I
occasionally saw it for sale at gas stations for substantially above that
price, on a percentage basis, e.g. $1.69.

------
paltman
Imagine how expensive coke would be without the US corn subsidy.

~~~
jessaustin
In that case we'd probably just import _real_ sugar. Agricultural handouts
lead to more agricultural handouts.

~~~
searine
And less dead poor people! But we don't care about those. Your hipster sugar
is more important.

~~~
jessaustin
I support giving poor people any amount of money (or food, I guess?) directly.
I don't support messing up the commodities market (and numerous other things
as a result) for the alleged purpose of feeding them HFCS.

Did you infer "hipster" from the _italics_?

