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Was the WSJ article credible? “All I found is an article in one of the world’s premier news publications” doesn’t match your implied tone.

• civilitty 3y ago
  From the wikipedia article on new Coke: > New Coke was introduced on April 23, 1985. Production of the original formulation ended later that week. Madagascar’s GDP grew from 3.9 to 4.3 billion between 1984 and 1986 well after Coca Cola would have stopped buying vanilla beans. There was a significant “collapse” to 3.2 billion in 1987 but that followed a 1986 Structural Adjustment Program with the IMF that called for significant budget cuts, liberalization, and austerity. The time line just doesn’t line up. As far as I can tell the commodity woes that struck Madagascar in the mid 1980s had to do with coffee, not vanilla. So the answer is no, I don’t find glorified 1980s just-so blogspam in the WSJ to be credible just because it’s got recognizable initials like “WSJ”. It doesn’t even pass basic sanity checks.
  • deleted 3y ago
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  • rcme 3y ago
    Actually Coke would have resumed buying vanilla in 85 because that’s when New Coke was discontinued. I think it’s hard to say exactly what Coke’s buying of vanilla looked like as it likely relied heavily on futures and just-in-time manufacturing was less prevalent. 1985, coincidentally, had the lowest GDP between 80-85, the year Coke production, and presumably vanilla purchases, resumed. And, as you pointed out, GDP grew a lot in 1986, which was the first full year Coke resumed vanilla buying.
    • civilitty 3y ago
      “Lowest GDP” means 3.8 billion in 1985 versus 3.9 billion in 1984. There was no economic collapse or crash as claimed by OP or the WSJ article. It was all nonsense sensationalism. Coca Cola literally reintroduced the original formula less than three months later. They had zero to little impact on Madagascar’s economy in that time frame.
      • rcme 3y ago
        Lol ok, I’ll take your word for it over the WSJ. Also, aren’t you kind of ignoring that GDP greatly increased after Coke reverted back to the original formula (1986 GDP was 4.35B, up over 14% from 85)? In either case, your original “smell test” comment really glosses over the 3% decline in GDP the year New Coke was introduced followed by a 14% increase the year following old Coke’s reintroduction. I’d say that passes the smell test, but isn’t definitive evidence that there was a noticeable impact from Coke.
        • civilitty 3y ago
          Coca Cola’s revenue grew from 7.9 billion in 1985 to 8.67 billion in 1986 [1]. In that time frame Madagascar’s GDP fell from 3.9 to 3.8 billion. +770 million => -100 million. Coca Cola’s revenue fell from 8.67 billion in 1986 to 7.65 billion in 1987. In that time frame Madagascar’s GDP rose from 3.8 to 4.3 billion. -1 billion => +0.5 billion. There is no correlation. It doesn’t pass any smell test. [1] https://ycharts.com/companies/KO/revenues_annual https://ycharts.com/companies/KO/revenues_annual
          • rcme 3y ago
            No one is claiming that Coke’s revenue and Madagascar GDP are perfectly correlated. The claim was that the cessation of all vanilla buying from Coke caused a demand shock that harmed the economy in Madagascar. The data does not disqualify that possibility. Also consider another thing: the revenue of Coke was multiple times that of the GDP of the entire country of Madagascar. Is it really surprising that this demand shock could occur?
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            • hiatus 3y ago
              > The claim was that the cessation of all vanilla buying from Coke caused a demand shock that harmed the economy in Madagascar. No, crazygringo's claim was that the economy crashed: > When New Coke was introduced in 1985, it replaced the vanilla with vanillin, and the Madagascar economy crashed since that's where the vanilla comes from.