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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 vani
by 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 agoLol 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 agoCoca 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 agoNo 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?
- deleted 3y ago[deleted]
- 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.
- rcme 3y agoI feel like I’m repeating myself here. GDP in Madagascar declined by 3% during the time in question. That’s a pretty big decline in a very short amount of time. During the GFC, GDP in the US contracted by 4.2% over two years, for reference. Are you implying that that a 3% decline is not a crash? I’d like to point out that we already have evidence this happened. The WSJ reported on it at the time, and the WSJ is a credible institution. In this thread, we have someone rejecting this event using cherry picked data to fit their narrative, but their interpretation doesn’t hold up under scrutiny. Not to appeal to authority too much, but given the choice between a write up in the WSJ or some random commenter’s “smell test” decades later, I’m going with WSJ.