What former YUM! CEO learned from the ‘epic fail’ of Crystal Pepsi

Former YUM! Brands Chairman & CEO, David Novak, joins 'Influencers with Andy Serwer' to discuss the creation of Crystal Pepsi in the early 1990s.

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ANDY SERWER: I want to ask you about a misstep in your career, David. And you are famously behind the development of Crystal Pepsi. You talked about the lessons you've learned there. But I'm wondering, how did you personally bounce back in the years that followed, and what lessons can people draw from your experience?

DAVID NOVAK: Well, I think everybody-- every leader has what I call an epic fail, you know, something where, you know, it just-- you know, you-- you-- you play-- like to play over again and again. I believe me, I've relived those Crystal Pepsi days. But you know, when I went to Pepsi, Pepsi was in need of turnaround. The business was not doing well. So I developed the idea of a clear cola.

The only issue that I had-- the consumer loved the idea. It didn't taste enough like Pepsi. And you know, my big learning was is I had franchise bottlers tell me, David, it needs to taste more like Pepsi. You're calling it Pepsi. And you know, I didn't listen to 'em because I thought it was such a big idea. And if I would have listened to 'em, given it a little bit more Pepsi flavor notes, I'm convinced that Crystal Pepsi would still be around today.

But I was able to survive it because, number one, the business, you know, did take off when we launched Crystal Pepsi. I mean, everybody tried Crystal Pepsi. It was like a gigantic in-and-out product. But people didn't come back and buy it again. So it didn't have the sustainability that I was hoping for.

And when I look at this, I always say, jeez, what if I would have just made sure it was a better product, tasted a little bit more like Pepsi. I think it'd still be around today. And by the way, Andy, they brought it back, I think, a couple of years ago as a limited-time only offering at Pepsi. So you know, I think it's-- you know, it had a niche. We just didn't make it as big as it could have been.

ANDY SERWER: Or was it maybe a little bit ahead of its time? Because you know, now it would have seen being perceived as cleaner or healthier and, you know, that-- the clear-- you know, like the way vodka took off at the expense of bourbon, right?

DAVID NOVAK: I think it was a little bit ahead of its time. But frankly, that was the reason why I developed it because back then, you know, the water business was booming. Clearly Canadian was one of the hotter products. And so everything that was clear was growing. And so that was because it was perceived to be better for you. And that-- that was why I said, well, look, if all these clear products are doing well, why don't we just make a clear Pepsi? And you know, it was a breakthrough idea poorly executed.