🔗 The Fixed Price of Coca-Cola from 1886 to 1959

🔗 United States 🔗 Business 🔗 Marketing & Advertising 🔗 Food and drink 🔗 Food and drink/Beverages

Between 1886 and 1959, the price of a 6.5-oz glass or bottle of Coca-Cola was set at five cents, or one nickel, and remained fixed with very little local fluctuation. The Coca-Cola Company was able to maintain this price for several reasons, including bottling contracts the company signed in 1899, advertising, vending machine technology, and a relatively low rate of inflation. The fact that the price of the drink was able to remain the same for over seventy years is especially significant considering the events that occurred during that period, including the founding of Pepsi, World War I, Prohibition, changing taxes, a caffeine and caramel shortage, World War II, and the company's desire to raise its prices. Much of the research on this subject comes from "The Real Thing": Nominal Price Rigidity of the Nickel Coke, 1886–1959, a 2004 paper by economists Daniel Levy and Andrew Young.