The Virgin Founder looks back on one of Virgin’s less than successful companies and the lessons he learnt from its demise. Despite things not going to plan, it still offers up some fond memories...
“It’s fair to say that our launch of Virgin Cola in 1994 was not subtle. Driving a tank through New York’s streets before smashing through a wall of Coca-Cola cans certainly created some front-page headlines, which was exactly what we wanted. With Virgin Cola, we felt confident that we could smash our way past Coca-Cola and Pepsi, our main competitors. It turned out, however, that we hadn’t thought things through. Declaring a soft drink war on Coke was madness,” recalls Richard Branson. “I consider our cola venture to be one of the biggest mistakes we ever made - but I still wouldn’t change a thing.”
So why, according to Branson, was Virgin Cola such a failure? It seems as though he has come to pinpoint two key reasons.
The mistakes behind the fall of Virgin Cola
"We had effectively parked our tank on the lawn of the world’s largest soft drinks brand, and we weren’t quite prepared for the size or the ferocity of Coca-Cola’s response, which included a steep increase in their marketing budget and pressure on distributors not to work with us. Had we known how the company would react, we may well have taken a different approach. That was the first of two reasons that we failed."
"The other, more important, reason was the fact that we didn’t follow our own rules, which is a cardinal sin. Virgin only enters an industry when we think we can offer consumers something strikingly different that will disrupt the market, but there wasn’t really an opportunity to do that in the soft drinks sector. People were already getting a product that they liked, at a price they were happy to pay - Virgin Cola just wasn’t different enough (even if we did create bottles shaped like Pamela Anderson that kept tipping over because they were top-heavy!)."
Despite these failings, there were some big positives to come out of the whole incident. Going to show that you’re not just making a mistake, you’re learning a valuable lesson. Take a look at why Branson believes the time spent on Virgin Cola was by no means wasted - have you had a similair experience before? If so, let us know below...
The positives to come out of the whole experience
"It was a great learning experience for our team, and in taking on the role of plucky underdog, Virgin seemed to win over a lot of the American public, which certainly made things easier when we launched subsequent businesses there, including our airline."
"Perhaps the biggest positive to come from Virgin Cola, however indirectly, was the launch of Innocent Drinks. Co-founder Richard Reed, a former employee at Virgin Cola, was inspired by his experience, and later started selling his own smoothies with a couple of friends. He now heads one of the biggest, most purposeful drinks brands in Britain. And it’s very satisfying to know that he got his start at one of our Virgin businesses."